ComfortDelGro - RHB Invest 2024-01-12: Upbeat On Recent Developments; Keep BUY

• ComfortDelGro recently announced two developments that should strengthen its earnings ahead:
  1. It plans to acquire 90.75% of A2B Australia (A2B) at AUD1.45/share (~S$150m); and
  2. - Read this at SGinvestors.io -
• The A2B acquisition and higher commission rate should lift ComfortDelGro's FY24-25 earnings by 2-4% and 4-5%.

Acquisition of the remaining stake in A2B Australia.

• The announced transaction values A2B, a company that primarily facilitates taxi bookings, trips, and payments, at AUD182m or S$163.3m (on a fully diluted basis). The acquisition will be funded through existing cash and bank facilities.
• We assume 75% of the value will be funded by debt, and the transaction – which requires multiple approvals – will only be completed by the end of 1H24.
• - Read this at SGinvestors.io -
• payment processing fees for non-cash taxi payments.
• The company has seen steady improvement in profit with a FY22 (Jun) EBITDA of AUD20m, which is still well short of the AUD36m EBITDA reported before the pandemic.

Increase in Singapore taxi commissions.

• Read more at SGinvestors.io.

Shekhar Jaiswal RHB Securities Research | https://www.rhbgroup.com/ 2024-01-12 SGinvestors.io

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