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COMFORT DELGRO - MOVING FORWARD
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MambaFinancial89
Senior |
04-Oct-2023 11:56
Yells: "Be greedy when others are fearful. " |
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UOB Kay Hian lifts ComfortDelGros TP to $1.61 upon seeing improving rail and taxi ridership UOB Kay Hian analysts Llelleythan Tan and Heidi Mo have kept their BUY call on ComfortDelGro with a higher target price of $1.61 from $1.56. With improving fundamentals, a decent 4.7% dividend yield and a robust balance sheet, we reckon that most negatives have already been priced in, say Tan and Mo in their report dated Oct 4. The analysts see several positives going on for the transport operator including a recovery in the group&rsquo s rail ridership. CDGs rail ridership has recovered back to pre-pandemic levels, increasing 1.6% m-o-m and 16.2% y-o-y respectively in August. This is in line with our expectations that rail ridership will surpass pre-pandemic levels in 3Q2023, they write. Additionally, per the Land Transport Authority (LTA), the average number of point-to-point (P2P) daily trips, via both street-hail and ride-hailing services, has risen by 3.6% mom and 5.5% y-o-y to 613,000 in July, the second-highest in the past two years (614,000 in February). The 7.0% increase in bus and train fares by the Public Transport Council, which surpassed Tan and Mos expectations of a 3.0% hike, is also estimated to bring in an added $20.9 million for CDG&rsquo s 74.4%-owned subsidiary, SBS Transit, and contributing directly to CDG&rsquo s earnings. Based on our estimates, the upcoming 7% hike in rail fare would increase our 2024/25 net profit forecasts by 3% - 4%, say Tan and Mo. The analysts also point out that the upcoming fare hike, which will take effect in December, is only a portion of the maximum allowable fare adjustment of 22.6%. It is expected that the remaining 15.6% would be deferred to future annual fare review exercises and is unlikely to be expunged, according to Singapores Acting Minister for Transport. This implies that we do expect additional higher fare adjustments in 2024-2025, they write. Following this, the analysts have raised their FY2024 &ndash FY2025 patmi estimates by 3% - 4% to $226.9 million (from $219.1 million) and $256.6 million (from $245.9 million) respectively. The analysts new target price is pegged to the same 15x FY2024 P/E and is largely due to their increased patmi estimates. Source: https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-lifts-comfortdelgros-tp-161-upon-seeing-improving-rail-and-taxi Date: 4 October 2023 |
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MambaFinancial89
Senior |
22-Sep-2023 16:41
Yells: "Be greedy when others are fearful. " |
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Analyst Target Prices CIMB: $1.47 DBS: $1.65 Philip: $1.57 RHB: $1.46 Maybank: $1.50 OCBC: $1.30 Time will tell... |
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Joelton
Supreme |
20-Sep-2023 10:07
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Fare hike could lift ComfortDelGro&rsquo s FY2024 profit by S$11 million: DBS
THE upcoming public transport fare hike could raise ComfortDelGro&rsquo s : C52 0% FY2024 bottom line by boosting contributions from its bus and train businesses, according to DBS Group Research.
In a report on Tuesday (Sep 19), the research house estimated that SBS Transit : S61 +1.16% would see a FY2024 bottom line improvement of S$14.7 million from FY2023 levels, after factoring in gains from the impending fare changes effective Dec 23 this year.
This translates to an S$11 million increase in net profit at the group level for ComfortDelGro, it said.
ComfortDelGro, a land transport conglomerate, owns a 74.4 per cent stake in SBS Transit. The unit operates public bus and train services in Singapore.
In DBS&rsquo view, the upcoming fare hike, coupled with higher train ridership, will allow SBS Transit&rsquo s train services segment to become profitable in FY2024.
The bank noted that SBS Transit&rsquo s average daily rail ridership for August 2023 had reached pre-Covid levels.
&ldquo That should allay market&rsquo s scepticism that ridership will not return to pre-Covid due to work-from-home phenomenon,&rdquo it said.
The Public Transport Council (PTC) on Monday said it expects SBS Transit&rsquo s annual revenue to rise by S$20.9 million, following the hike in public transport fares due to kick in later this year.
DBS&rsquo forecast takes into consideration the mandatory 15 per cent, or S$3.14 million, that SBS Transit will have to contribute to the Public Transport Fund from its expected revenue increase.
The overall fare increase of 7 per cent announced by the PTC on Monday was higher than the 3 per cent that DBS had pencilled into its forecasts.
DBS said it views the &ldquo significantly higher&rdquo allowable fare hike of 7 per cent as a &ldquo positive development&rdquo as it reduces SBS Transit&rsquo s reliance on government support.
It also signals a path to higher margins with further high fare hikes in the cards should the economy remain sound, added the bank.
Separately, Lim & Tan Securities also estimated that ComfortDelGro&rsquo s FY2024 earnings could grow by 5 per cent to 6 per cent on the back of higher fares.
&ldquo We view the fare increases as positive for ComfortDelGro as it would help to mitigate the inflationary cost pressures for both their bus and taxi businesses,&rdquo said its research team.
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MambaFinancial89
Senior |
19-Sep-2023 14:36
Yells: "Be greedy when others are fearful. " |
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Fare hike could lift ComfortDelGros FY2024 profit by S$11 million: DBS THE upcoming public transport fare hike could raise ComfortDelGros FY2024 bottomline by boosting contributions from its bus and train businesses, according to DBS Group Research. In a report on Tuesday (Sep 19), the research house estimated that SBS Transit would see a FY2024 bottomline improvement of S$14.7 million from FY2023 levels, after factoring in gains from the impending fare changes effective Dec 23 this year. This translates to an S$11 million increase in net profit at the group level for ComfortDelGro, it said. ComfortDelGro, a land transport conglomerate, owns a 74.4 per cent stake in SBS Transit. The unit operates public bus and train services in Singapore. In DBS view, the upcoming fare hike, coupled with higher train ridership, will allow SBS Transits train services segment to become profitable in FY2024. The bank noted that SBS Transits average daily rail ridership for August 2023 had reached pre-Covid levels. Source: Business Times |
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pikachu
Master |
19-Sep-2023 07:38
Yells: "Holy Cow!" |
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Price hike... will CDG go up? | ||||
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Speediman
Senior |
19-Sep-2023 00:43
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Public transport fare hike: Adults to pay 10 to 11 cents more per journey from Dec 23$I.30-1.40 is coming... |
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Entropy72
Master |
14-Sep-2023 13:31
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SINGAPORE - The way that taxi and ride-hailing operators conduct their business ? including the availability of rides ? is being reviewed by the authorities, in an effort to ensure that services stay relevant as commuter needs and the industry evolve.
The review of the point-to-point transport industry?s structure and regulatory framework, announced by the Land Transport Authority (LTA) on Wednesday, comes at a time when ridership is climbing. On average, the number of daily trips, comprising both street-hail and ride-hailing services, rose by 18.6 per cent, from 517,000 in November 2020 to 613,000 in July 2023. The review, due to be completed by the second quarter of 2024, comes nearly three years after the roll-out of a licensing framework for ride-hailing and taxi operators in October 2020. LTA said the point-to-point sector plays an important role in complementing mass public transport, giving commuters an option for direct journeys without the need to own a car. The review will focus on three areas: Improving the stability of the supply of taxis and ride-hailing services, such as during late-night hours when there are ride shortages Ensuring that services can be provided with minimal disruptions and downtime Ensuring that services cater to the needs of commuter groups such as wheelchair users and families with young children Talks with taxi and ride-hailing operators, the National Taxi Association and the National Private Hire Vehicles Association have started, said LTA. In addition, it will get feedback from different commuter groups. LTA said the point-to-point sector has evolved significantly since the licensing framework was rolled out. On the one hand, taxis retain an important role in serving high-demand locations such as Changi Airport, as well as tourists and commuters who are less technologically savvy. This is despite the demand for traditional taxi services decreasing, resulting in fewer taxis plying the roads. On the other hand, there has been an increasing preference for ride-hailing services among commuters and drivers, LTA said. Companies such as Gojek and Grab offer these services. Dr Amy Khor, Senior Minister of State for Transport, said in a Facebook post that even as the review is under way, there has already been consensus among the operators, associations and LTA to make ?helpful changes? to rules relating to driver conduct. One of them is to remove the legal requirement for drivers to search their vehicles for items left behind by passengers after every trip. Instead, this would become part of operators? best practices, she said. Responding to queries from The Straits Times, the Ministry of Transport said this change would be rolled out once the legislative process is completed. Taxi and ride-hailing firms said they were supportive of the review. Taxi operator ComfortDelGro?s spokeswoman, Ms Grace Wu, said the long-term sustainability of the industry was important in serving the needs of passengers better. Its taxi and private-hire car fleet completes between 80,000 and 90,000 trips daily. Grab?s spokesman said it has already been trying to recruit more drivers and creating tools to improve their productivity on the roads. These include allowing drivers to choose to work within predefined areas for a fixed period. This is meant to reduce idle time and increase the number of trips they can complete, with shorter distances per trip. A spokesperson for Gojek said the stability of driver supply should also take into account the nature of platform work, where drivers want the flexibility to determine their working hours and increase their income through other earning opportunities. Associate Professor Walter Theseira, a transport economist at the Singapore University of Social Sciences, said efforts to ensure an adequate supply of drivers on the roads throughout the day would be ?challenging?. That is because unlike public transport, which is supported by taxpayers, the point-to-point sector is driven by market forces. He said: ?The reason for low availability is that many drivers find it uneconomic to be on the road during (certain) times of the day. Forcing them to be on the road without guaranteeing them income basically harms their interests.? With many drivers being on more than one platform, it will not make sense to impose standards on the platform level, said Prof Theseira. Further complicating matters, taxi drivers are also on ride-hailing apps. Across the sector, there has been a rebound in the number of drivers. In response to queries from ST, LTA said there were about 63,000 active drivers in the point-to-point sector in the first half of 2023. This is about 15 per cent more than in the last quarter of 2022. While the number of active taxi drivers has been stable at 21,000, the pool of private-hire vehicle drivers has climbed by more than 15 per cent to around 42,000, said LTA. Drivers need a valid vocational licence to provide point-to-point services. LTA said the average waiting time for the approval of applications to attend vocational-licence training courses has been cut from 10 days in March to four days in July. |
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cloudy.mountain
Member |
30-Aug-2023 00:00
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glad management is exercising caution in tendering for public contracts and also careful not to be overly aggresive on the private hire car fleet expansion continue to look forward to higher dividends as management pledged to increase dividend payout ratio
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Joelton
Supreme |
29-Aug-2023 10:50
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ComfortDelGro targets larger overseas footprint amid limited Singapore growth
COMFORTDELGRO Corporation : C52 +0.79% plans to raise the contribution from its overseas operations to 50 per cent of total revenue in the near term, from 40 per cent currently, amid limited growth opportunities in the Singapore market.
The transport heavyweight&rsquo s group chief executive officer Cheng Siak Kian told The Business Times in a recent interview that Singapore still offers some room for its rail operations to grow.
Opportunities include the upcoming Jurong Region Line and Cross Island Line, which will be largely limited to existing rail operators in Singapore, although foreign players will be allowed to participate as minority partners of joint ventures.
However, the listed group finds it tough for its local bus operations &ndash run by its listed subsidiary SBS Transit : S61 -0.39%, which is Singapore&rsquo s largest public bus operator with a market share of 55 per cent &ndash to make further inroads here.
Cheng, who took over the reins of ComfortDelGro in January, acknowledged: &ldquo For us to increase market share (in Singapore) is extremely difficult, and that&rsquo s a fact.&rdquo
To &ldquo swing the balance&rdquo between the local and overseas markets, the group CEO pointed out that ComfortDelGro will have to grow its overseas business even more to catch up to its Singapore revenue, which is still expected to increase despite the limited market size.
Revenue for the group amounted to over S$1.8 billion for the first half of FY2023, with about S$1.1 billion or 58.2 per cent derived from Singapore.
Currently, the transport group has a presence in several countries, including the United Kingdom, Australia and China. It also recently secured a major train operating contract in Paris.
In deciding where it would expand its geographical footprint, Cheng cited a few criteria. &ldquo Typically we look at the contract&hellip it is important that we go into public transport contracts that we know are gross cost contracts.&rdquo
Such deals mean ComfortDelGro is paid a fee to operate the service and does not have to worry about revenue as the authority collects the fare and carries the financial risk. Hence, it provides ComfortDelgro with sustainable, reasonable margin.
Countries that have a strong rule of law appeal to the Singapore land transport player, as it will be reassured that all rights are respected and protected. It is drawn to markets where there is good demand for public transport as well.
Although the public bus and rail business generates a low operating profit margin &ndash ranging from 2 per cent to 5.7 per cent in the past six quarters for ComfortDelGro &ndash Cheng pointed out that the group makes up for it with scale and will &ldquo continue to increase our share in the markets that we&rsquo re in&rdquo .
ComfortDelGro ensures that it bids at a &ldquo reasonable&rdquo price so that the business is not loss-making. However, Cheng declined to disclose what a reasonable margin is, due to commercial sensitivity.
The stability of revenue from the public transport operations offers the visibility of return its shareholders look for, Cheng noted.
&ldquo If you look at our shareholders &hellip a lot of them are very long-term institutions or investors with a view that this is going to be a stable dividend-yielding stock with some upside, some growth&hellip They don&rsquo t expect us to, you know, give them another 30 per cent growth year-on-year,&rdquo Cheng said. &ldquo So our obligations, the strategy that you have, must also be in line.&rdquo
Cheng Siak Kian, group chief executive of land transport heavyweight ComfortDelGro, says that cabbies need a sustainable income. PHOTO: CHERYL ONG, BT
Public transport remained the group&rsquo s biggest income contributor in H1 FY2023, accounting for S$52.4 million or 44.7 per cent of operating profit, followed by taxi and private hire with S$42.7 million or 36.4 per cent.
ComfortDelGro now also offers ride-hailing through taxi and private-hire vehicles on its app called Zig, and sees itself as a &ldquo taxi leasing company enabled by technology&rdquo .
On the taxi sector having been disrupted by ride-hailing service providers, Cheng said that ComfortDelGro will not engage in price competition: &ldquo It&rsquo s not sustainable for a listed company like us because we have to deliver actual Ebit (earnings before interest and tax). It makes a difference, meaning that it&rsquo s not adjusted, we actually have to deliver a good return, we actually have to deliver cash flow, we need to pay (a) dividend.&rdquo
Cabbies also need a sustainable income, Cheng said &ndash a message that he reiterated throughout the interview.
ComfortDelGro&rsquo s taxi and private-hire segment has shown improvement since borders reopened, with the average take-home income of cabbies now being 20 per cent higher than pre-pandemic levels. This is partly due to the fare revision introduced in March 2022. Cheng did not disclose the average income figure because of commercial sensitivity.
The segment logs 90,000 rides daily, or about 15.2 per cent of the average daily number of street-hail and ride-hail trips of 592,000.
ComfortDelGro will add cabs to its fleet, if the demand warrants it, in spite of rising certificate of entitlement (COE) premiums. This is because cab operators pay a moving average of COE premiums for new taxis, making it less prohibitive than bidding for fresh COEs.
ComfortDelGro has about 9,000 cabs &ndash or 60 per cent of the cab population in Singapore &ndash with a utilisation rate of nearly 100 per cent. Cheng is also unable to say exactly when the remaining 10 per cent taxi rental rebate would be withdrawn, as it depends on various factors, including demand and drivers&rsquo take-home pay.
However, ComfortDelGro will hesitate to quickly expand its private-hire car fleet of over 600 in the short term because of the sky-high COE prices. Currently, over 5,000 private-hire drivers are registered with Zig.
Zig has seen increasing use for hailing private-hire vehicles and taxis. ComfortDelGro intends for customers to migrate to the app but will keep the dialling-for-taxi service, although on a smaller scale.
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Asdfgh101
Member |
22-Aug-2023 13:22
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Just be prepared for the sell down back to 118...earlier in the year 120 was sold down to 101 thereafter all the contracts were announced...can consider to re enter once it happens...should be 135 by CNY barring any unforseen circumstances | ||||
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Battle123
Elite |
21-Aug-2023 19:52
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I noticed today last few minutes 1.24 also broken, big sell down
Be cautious |
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Asdfgh101
Member |
21-Aug-2023 19:38
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The Con man, not the Boogeyman will be coming in soon... | ||||
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Entropy72
Master |
21-Aug-2023 17:43
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It is XD today.
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rajesh
Member |
21-Aug-2023 17:11
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it got trashed today......maximumum | ||||
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Entropy72
Master |
18-Aug-2023 20:57
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Don?t worry, unless you are not able to hold on to the stocks. Just enjoy the dividends and stay up to date on the developments of the company.
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rajesh
Member |
18-Aug-2023 18:44
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More than year i badly stuck since 1.72...seen 1.01 too now half way ...cannot dare to avg at 1.0x range ...now feels like it got momentum ....waitingg for min 1.5 , do u think guys can ?? 2 years ??3 years ?? | ||||
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Joelton
Supreme |
18-Aug-2023 10:05
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ComfortDelGro&rsquo s recovery gains traction, analysts raise target prices
After years of losing market share to ride-hailing apps, ComfortDelGro (CDG) is poised to protect its core taxi business. Competition from platforms like Grab and pandemic challenges led to CDG&rsquo s share price dropping to $1.02 on June 7. However, it rebounded and closed at $1.29 on Aug 16.
&ldquo ComfortDelGro is still first and foremost a land transport company,&rdquo says managing director and CEO Cheng Siak Kian at the company&rsquo s 1HFY2023 results briefing on Aug 14. &ldquo We are really trying to make sure that we are no longer the typical taxi rental company of ComfortDelGro in the past.&rdquo
For the six months ended June, earnings dropped by 31.9% y-o-y to $78.5 million. Excluding the one-off gain of $30.5 million from the sale of a property in London, CDG&rsquo s earnings were down 7.4% y-o-y because of higher operating costs.
There are clear and recent signs of recovery from the pandemic years. In 2QFY2023, CDG&rsquo s earnings rose by 39.3% from the previous quarter while its earnings for 1HFY2023 were up by 35.8% on a h-o-h basis.
CDG has declared an interim dividend of 2.90 cents per share, representing a payout ratio of 80%. To signal its confidence, CDG is revising its dividend policy to distribute at least 70% of its earnings, up from 50%.
In its results statement, chairman Mark Greaves, who replaced founding chairman Lim Jit Poh in April, notes that CDG was on the &ldquo cusp of change&rdquo and that it is &ldquo committing to new technologies and future engines of growth&rdquo .
CDG aims to strengthen its core by regaining bus contracts and embracing technology to electrify its fleet and depots. It also seeks to shift from fixed rental to flexible commissions to appeal to drivers, and is considering repricing and flat fee hikes for a competitive advantage against Grab&rsquo s surge pricing.
The group announced a $6 billion commitment to electrify its fleet, where most vehicles, be it taxis or buses, are still running on conventional engines. Christopher White, senior vice president of CDG&rsquo s group investor relations, says this sum will be spent over 15 to 20 years.
With a cash hoard of more than $500 million, CDG is also exploring potential acquisitions such as other bus, taxi and PHV companies as well as expanding into new regions and/or cities within its existing markets.
Cheng is unfazed by Grab&rsquo s bid for fellow taxi operator Trans-Cab. He is confident CDG&rsquo s taxis will continue to add value to the system and will co-exist with the disrupters, and that private hire vehicles will not dominate. &ldquo We believe that we can spread our assets much better. Taxi drivers are more prepared to work the two shifts compared to a [private hire driver],&rdquo he reasons.
Chairman Greaves says: &ldquo We&rsquo ve got the reputation, we&rsquo ve got the quality, we have to maintain vehicles, you know what you&rsquo re getting. And I think that&rsquo s very important.&rdquo
Analysts from CGS-CIMB Research, DBS Group Research, Maybank Securities, OCBC Investment Research (OIR) and RHB Bank Singapore have raised their target prices for CDG while keeping their &ldquo add&rdquo and &ldquo buy&rdquo calls.
CGS-CIMB&rsquo s Ong Khang Chuen sees CDG&rsquo s taxi segment as its &ldquo bright&rdquo spot in FY2023 as trip volumes remained stable after the introduction of its platform fees in July. &ldquo We forecast further revenue uplift of $11 million in 2HFY2023, assuming constant ride volumes,&rdquo he says. CDG&rsquo s UK operations are also expected to return to a positive ebit in 2HFY2023 on better cost pass-through.
CDG expects its new contracts in the UK to be tendered with &ldquo significantly higher service fees&rdquo which will help &ldquo with margin repair&rdquo , Ong adds, who has a raised target price of $1.47 from $1.35.
RHB&rsquo s Shekhar Jaiswal has raised his target price to $1.40 from $1.35 as he remains &ldquo optimistic&rdquo about the continued increase in CDG&rsquo s profit amid an &ldquo improving outlook for its UK public transport and Singapore taxi and private hire businesses&rdquo .
DBS&rsquo s Andy Sim and Chee Zheng Feng, who have raised their target price to $1.65 from $1.62, estimates that CDG&rsquo s recent introduction of a platform fee of 70 cents per ride booked via the Zig taxi app could lift FY2023 and FY2024 bottomlines by $5.7 million and $12.4 million respectively.
Maybank&rsquo s Eric Ong, who has upped his target price to $1.50 from $1.45, sees more room for CDG to raise its commission rate, which is currently at 5% compared to its peers&rsquo range of 15% to 20%.
OIR&rsquo s Ada Lim, who is relatively restrained compared to her peers, has raised her fair value estimate to $1.31 from $1.25 as she notes the various improvements. &ldquo However, given that CDG&rsquo s future engines of growth are still in a relatively nascent stage, and the absence of concrete targets, we continue to await a more meaningful catalyst for the stock,&rdquo Lim says.
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beetlejuice
Master |
17-Aug-2023 19:59
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Kinda sad, all my more meaningful buys (Keppel, SCI, OCBC, Netlink, Capland, Genting etc) during covid period did well or awesome except this one.
It's better late than never. Hopefully, now is its turn to shine. 💰 🧧 🚍 🚖 ✨
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hypewhy
Member |
17-Aug-2023 17:18
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smart bro
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beetlejuice
Master |
17-Aug-2023 16:44
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Added more at start of this year at 1.17 & 1.23. Yeah will keep for full year dividend of 7.12cts per share. 💰 🧧
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