ComfortDelGro

Re: ComfortDelGro

Postby winston » Wed Feb 19, 2020 7:40 am

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Speed bumps and quiet streets ahead for ComfortDelGro

by Samantha Chiew

SINGAPORE (Feb 17): Analysts are mostly neutral on land transport operator ComfortDelGro (CDG) as the group is expected to experience some headwinds amid the novel coronavirus (CoVid-19) outbreak in Singapore.

On top of that, CDG on Friday reported its FY2019 earnings, which fell by 12.6% to $265.1 million from $303.3 million a year ago.

Revenue was however 2.6% higher y-o-y to $3.9 billion, mainly due to $154.2 million in contribution from new acquisitions.

The decline in earnings was on the back of higher operating costs, which included provision for impairment in its taxi business.

The group on Feb 13 announced a relief package in excess of $18 million that will be given to cabbies who have been hit by falling demand as a result of the CoVid-19 outbreak.

And, as managing director and group CEO Yang Ban Seng puts it: “I think things will get worse before they get better.”

As it is, DBS Group Research has downgraded its call on CDG to “hold” from “buy” with a lowered target price of $2.26 from $2.45.

In a Monday report, analyst Andy Sim says, “While the impact from CoVid-19 outbreak and taxi rental rebates were within expectations, the impairment provision on its taxi operations and dividend cut threw us off course. We trimmed our FY20F/21F earnings by 6%/5% and expect DPS to trail lower in FY20F.”

“We are making a quick U-turn on this ride which was foolhardy and truly regrettable,” he adds.
Although the impact from CoVid-19 should be temporary, but the group’s cut in dividends and muted growth outlook would be tough for the group’s share price to perform in the near term.

RHB Group Research also has kept its “neutral” call on CDG with a reduced target price of $2.25 from $2.38.

Analyst Shekhar Jaiswal says in a Monday report, “Concerns of the negative impact from CoVid-19 on CDG’s taxi and public transport businesses have lowered share price. Rising operating costs for public transport business – witnessed in 4Q19 – should drag EBIT margins lower, with taxi earnings also remaining weak.”

In 4Q19, CDG reported weak 4Q19 margin for its Singapore public transport business amid the introduction of fixed licence charge related to operations of the Downtown Line as well as elevated costs related to mid-life refurbishments to be undertaken at the North-East Line.

Concurrently, the group reported weak EBIT margins for its overseas public transport business, which the analyst believes is from its UK operations.

“While we expect public transport business to report higher revenue, margins are expected to remain weak in near term,” says Jaiswal.

Similarly, CGS-CIMB Research is holding on it its “hold” recommendation on CDG with a slightly lowered target price of $2.08 from $2.09 previously.

In a Saturday report, lead analyst Ong Khang Chuen says, “We keep our ‘hold’ call due to near-term uncertainties but believe dividend yield of 4.8% is the key support to share price. We believe a better entry point could be at the -1 SD level, or 13.5 times forward P/E ($1.88).”

Overall, drags remain for the group, which includes weaker public transport services margins due to higher repair and maintenance expenses and licence charges for the Downtown Line (DTL), and continued decline in taxi revenue due to a smaller fleet size.

Nonetheless, the key disappointment of CDG’s latest FY2019 results is its lower final dividend of 5.29 cents, compared to 6.15 cents in FY2018.

As at 11.10am, shares in SDG are trading 3.2% or 7 cents lower at $2.11, giving it a 1.8 times FY20 price-to-book ratio, with a dividend yield of 4.4%, according to DBS’ estimates.

Source: The Edge

https://www.theedgesingapore.com/capita ... 401b309bc7
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Re: ComfortDelGro

Postby behappyalways » Thu Feb 20, 2020 4:12 pm

Rental rebates will hit ComfortDelGro's FY2020 earnings
https://sbr.com.sg/transport-logistics/ ... 0-earnings
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Re: ComfortDelGro

Postby winston » Thu Apr 02, 2020 10:02 am

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FY20 Loss For The Taxi Unit Expected
Neutral (Maintained)
Target Price (Return): SGD1.54 (+5%)
Price: SGD1.47
Market Cap: USD2,219m
Avg Daily Turnover (SGD/USD) 24.0m/17.3m

Still NEUTRAL with new SGD1.54 TP from SGD2.25, 5% upside and 5.6% yield.

The rental rebate extension offered to taxi drivers should translate into a FY20 loss for the taxi unit.

Lower rail ridership – due to several factors – implies lower margins for the public transport business.

We cut FY20-21F profits 17% and 10%.

After a 38% YTD share price decline, ComfortDelGro now trades at 14.2x FY20 P/E, close to its 15x historical pre-COVID-19 average.

We await the pandemic’s easing before turning positive on earnings and share price outlook.

Source: RHB

https://research.rhbtradesmart.com/atta ... e54ae7.pdf
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Re: ComfortDelGro

Postby behappyalways » Fri Apr 24, 2020 5:54 pm

ComfortDelGro Taxi extends relief measures worth total of $116 mil till June 1
https://www.theedgesingapore.com/news/c ... ill-june-1
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Re: ComfortDelGro

Postby winston » Mon May 18, 2020 8:02 am

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Maybank Kim Eng says ComfortDelGro's defensive revenue makes it a "buy"/

SINGAPORE (May 18): Maybank Kim Eng has reinitiated coverage on ComfortDelGro with a “buy” call and price target of $1.99, thanks to its “defensive” revenue model, decent yield, and growth prospects over the long term.

While CDG’s taxi business has been hurt from the Covid-19 outbreak, that’s a relatively small proportion, or 17%, of FY2019 revenue.

On the other hand, some 63% of CDG’s revenue from FY2019 came from fixed contracts for operating bus services, where the revenue isn’t tied to passenger numbers.

In her May 17 note, MBKE analyst Kareen Chan estimates that for every month’s extension of the measures, CDG’s profit after tax would be trimmed by just 0.3%.

With Covid-19 infection rates down by more than half from the peak, chances are the measures will not be extended past June 1 and if so, will be an “upside catalyst”.

To be sure, the Covid-19 outbreak has hurt CDG. The company has earlier flagged that its Singapore taxi business will be loss-making. Chan estimates that since February, the company has chalked up some $115 million worth rental rebates or rental waived.

Nevertheless, the post Covid-19 operating environment is seen to be more favourable than previously.

Chan notes that the competition between CDG and the private hire vehicles, operating on the “super-Apps’” platforms, is moderating, as they are channelling more energy trying to expand in higher margin, non-transportation markets.

“In addition, lower fuel costs due to falling oil prices and government subsidies should reduce operating expenditure pressure in the near term,” says Chan.

In the longer term, Singapore’s land transport policies, with a view towards environmental sustainability considerations, remain skewed in favour of public transport over private car ownership.

“Singapore is committed to zero-car growth for example,” she says.

In addition, CDG has the appetite to borrow and make overseas acquisitions, including bus operators under a similar contract-fee framework, says Chan.

She notes that if CDG is to spend $1 billion on such acquisitions, its net gearing would increase to 25%. As at end FY2019, its net gearing was just 1.3%. The company management is comfortable to borrow and raise this level to 40%.

Revenue from overseas operations accounted for 42% of CDG’s FY2019 total. Chan estimates overseas revenue to overtake domestic revenue by FY2023, which will further diversify CDG’s revenue stream and offer less volatility.

Chan estimates CDG’s earnings per share to drop from 12.2 cents in FY19 to 8 cents for the current FY20, but to rebound to 11.2 cents the following year.

Chan expects CDG to cut its FY20 dividend from 9.8 cents to just 4.8 cents, which is pegged to a conservative dividend payout ratio assumption of 60%.

Over the past five years, the same ratio has averaged at 73%. Chan notes that at this level, the dividend payout still translates into a yield of 3.3%, which is 220 basis points higher than 10-year Singapore government bonds.

The historical post-crisis performance of this stock should give investors some confidence as well.

According to Chan, following the 2003 Sars outbreak and the 2008-2009 Global Financial Crisis, CDG’s share price rebounded by 75% and 90% respectively, in the following eight to ten months.

Source: The Edge Singapore

https://www.theedgesingapore.com/news/b ... kes-it-buy
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Re: ComfortDelGro

Postby winston » Mon May 18, 2020 9:13 am

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ComfortDelGro (CD SP)
Share Price: SGD1.46
Target Price: SGD1.99
Recommendation: Buy

Comfort in the unknowns

Initiate coverage on ComfortDelGro with BUY and DCF-based TP of SGD1.99 (WACC: 8.2%, LTG: 1%).

63% of CDG’s revenues are secured by contracts.

Our conservative FY20/21E dividend payout assumptions of 60% (vs. 73% 5-year average) offers 3.3% yield.

FY19 payout ratio of 80% implies 4.4% yield.

Long-term public policy and ESG preferences will favour public transport.

Together with strong track record of accretive M&A in overseas markets, CDG offers significant exposure to this structural theme.

Source: KE

https://factsetpdf.maybank-ke.com/PDF/1 ... 4fd1eb.pdf
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Re: ComfortDelGro

Postby winston » Wed May 20, 2020 9:21 am

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ComfortDelGro Corporation (CD SP)
Priced For Recovery; Upgrade To BUY


While a pick-up in commuter numbers is likely to be gradual, CD’s share price appears to have largely priced in the weakness in transportation services due to stay-home measures, from both its taxi segment as well as from rail ridership.

If there are further transport disruptions, downside is fairly limited.

1H20 will see less than-stellar performance, but the road ahead is likely to be more positive. Upgrade to BUY with a PE-based target price of S$1.82 (previously S$2.15).

Source: UOBKH

https://research.uobkayhian.com/content ... 6b08d838f6
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Re: ComfortDelGro

Postby behappyalways » Sun May 24, 2020 5:43 pm

ComfortDelGro's 1Q earnings dive 49% to $36 mil, lockdowns to 'significantly hurt' 1H business
https://www.theedgesingapore.com/capita ... h-business
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Re: ComfortDelGro

Postby winston » Tue May 26, 2020 8:57 am

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1Q20 Business Update; Keep NEUTRAL
Neutral (Maintained)
Target Price (Return): SGD1.45 (-6%)
Price: SGD1.54
Market Cap: USD2,341m
Avg Daily Turnover (SGD/USD) 25.3m/17.9m

Keep NEUTRAL with new SGD1.45 TP from SGD1.54, 6% downside.

ComfortDelGro reported abridged financials for 1Q20 with PATMI accounting for 19% of our previous 2020F estimate.

While COVID-19 mostly impacted overseas businesses negatively in 1Q20, its effect on Singapore businesses – 60% of revenue – will be visible in 2Q20.

We cut FY20F-22F profits by 7%-14%.

With expected near term earnings weakness and likely slow recovery in business to pre-COVID-19 levels, we see limited catalysts to turn positive on earnings and share price outlook.

Source: RHB

https://research.rhbtradesmart.com/atta ... 689270.pdf
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Re: ComfortDelGro

Postby winston » Tue May 26, 2020 9:06 am

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ComfortDelGro Corporation (CD SP)
Earnings Expected To Decline In 1H20. Looking Ahead To Gradual Recovery


CD recorded earnings of S$36m in 1Q20 (-49% yoy).

1H20 profit levels will be expectedly hard hit by the lockdown measures in various countries, although costs can be trimmed to a larger extent by the Jobs Support Scheme and foreign worker
levy from 2Q20 onwards.

Looking past the near-term weakness, we opine that the group can still emerge as a dominant land transport operator.

Maintain BUY with a PE-based target price of S$1.82.

Source: UOBKH

https://research.uobkayhian.com/content ... 1816cc134c
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