Comfort Delgro

(21-09-2017, 10:38 AM)yeokiwi Wrote: We are seeing a gradual demise of the traditional industries and specifically GLCs.

NOL was gone.
ComfortDelgro is panting.
SPH is selling papers that nobody wants to read
Mediacorps is producing dramas that nobody watches.
Keppel and Semcorp.. not sure whether they can survive the oil and gas downturns.

Don't forget SMRT.

SIA also struggling.

(21-09-2017, 10:53 AM)brattzz Wrote:

(21-09-2017, 10:38 AM)yeokiwi Wrote: We are seeing a gradual demise of the traditional industries and specifically GLCs.

NOL was gone.
ComfortDelgro is panting.
SPH is selling papers that nobody wants to read
Mediacorps is producing dramas that nobody watches.
Keppel and Semcorp.. not sure whether they can survive the oil and gas downturns.

still got a few sectors, big fat cats, education, insurance, finance & banking sectors too... hope these will results in low cost and better value services,

Capitaland and Mapletree families still performing alright.

(21-09-2017, 10:06 AM)CY09 Wrote: An asset heavy company (CDG) fighting companies on an asset light structure (Uber & Grab). It is not looking like a fair fight.

For Uber/Grab, it is like a tuition industry - anyone can drive and as it is not a full time job, the revenue these drivers demand may not be necessarily high (maybe they are willing to earn $15/hour after all cost). Conversely, for taxi drivers, this is their main livelihood. Will CDG taxi drivers be willing to take home less than $3,000 per month?

And for drivers doing Uber/Grab full time, the private car rental rates are lower than CDG rental rates. If CDG really wants to compete, my stance is still the same - lower your high rental rates to help your drivers

And to the Prof suggesting CDG to diversify- (i) you cant increase profitability of SBS transit without making the public pay more for transport, (ii) CDG is already expanding overseas but competing in this overseas industries shows you the lower profit margin, (iii) CDG had been benefiting from Singapore Govt policies to maintain profits and these disruptions are tearing into CDG's profits. It shows how much govt regulation has been "artificially inflating" CDG profits

As Grab and Uber provide private car rental service to driver, they are moving towards asset heavy model as well.

Personally, I choose Grab and Uber purely due to cheaper fare and I always find Taxi will always be a more comfortable journey.

(21-09-2017, 11:32 AM)Dividend Warrior Wrote:

(21-09-2017, 10:53 AM)brattzz Wrote:

(21-09-2017, 10:38 AM)yeokiwi Wrote: We are seeing a gradual demise of the traditional industries and specifically GLCs.

NOL was gone.
ComfortDelgro is panting.
SPH is selling papers that nobody wants to read
Mediacorps is producing dramas that nobody watches.
Keppel and Semcorp.. not sure whether they can survive the oil and gas downturns.

still got a few sectors, big fat cats, education, insurance, finance & banking sectors too... hope these will results in low cost and better value services,

Capitaland and Mapletree families still performing alright.

Sorry a bit off topic....

Any sunrise or Star GLC?

(21-09-2017, 12:07 PM)retnuoc Wrote:

(21-09-2017, 10:06 AM)CY09 Wrote: An asset heavy company (CDG) fighting companies on an asset light structure (Uber & Grab). It is not looking like a fair fight.

For Uber/Grab, it is like a tuition industry - anyone can drive and as it is not a full time job, the revenue these drivers demand may not be necessarily high (maybe they are willing to earn $15/hour after all cost). Conversely, for taxi drivers, this is their main livelihood. Will CDG taxi drivers be willing to take home less than $3,000 per month?

And for drivers doing Uber/Grab full time, the private car rental rates are lower than CDG rental rates. If CDG really wants to compete, my stance is still the same - lower your high rental rates to help your drivers

And to the Prof suggesting CDG to diversify- (i) you cant increase profitability of SBS transit without making the public pay more for transport, (ii) CDG is already expanding overseas but competing in this overseas industries shows you the lower profit margin, (iii) CDG had been benefiting from Singapore Govt policies to maintain profits and these disruptions are tearing into CDG's profits. It shows how much govt regulation has been "artificially inflating" CDG profits

As Grab and Uber provide private car rental service to driver, they are moving towards asset heavy model as well.

Personally, I choose Grab and Uber purely due to cheaper fare and I always find Taxi will always be a more comfortable journey.

Based on my personal experience, I don't find Grab/Uber cheaper especially with their surge pricing.  Unless we are including booking fee for taxi rides.  Uber Pool/Grab Hitch/Grab Share is cheaper because they are car pooling.

Over the weekend, I had 2 cab rides. I asked the taxi uncles why they didn't want to switch to Grab despite the carrot dangled by them. Their reply was the same: they feel uncertain about switching over. for example: will they get suspended if grab customers complain about them and give them only 1 star rating?

despite the higher rental of CDG, they still feel comfortable staying with them. in fact, one of the driver told me that the CDG now listens to the driver's side of story when the customer complains. in the past, it was always the customer who is right.

没有永远的朋友，也没有永远的敌人. Uber/Grab and all the conventional taxi operators were once business competitors, but now, they are becoming alliances. It is really interesting to see the development. Initially, it was the private hire cars (ie, Uber and Grab) vs the conventional taxi operators (CDG, SMRT, Trans etc). Now, with all taxi operators (except CDG) jumping into the camp of Grab, it seems the competition is between Uber VS Grab, with Grab on the winning side. So in order to fight the competition, CDG and Uber is now discussing a possible tie up. However, if indeed CDG and Uber joint forces, then the unhealthy competition will continues with each side trying to kill their opponent by continue to burn cash. No one will benefits except the customers.

IMHO, CDG should follow the footsteps of the other taxi operators and join Grab instead. In this way, Uber will have limited chance to survive and may exit the market, just like they did in China. When that happens, Grab, being the only private hire car operator, will probably stop or reduce their cash buring strategy. Then we will see a more healthy competition in the market. Fares will increase and the earning of drivers will improve.

Of course, if that happens, passengers will not enjoy the cheap rides they are getting so often now.

So how much does one think is the value of the "new comfort"?

A total erasure of the taxi's profits means CDG may be worth $1.08 per share; while assuming the taxi Division continues to earn 100 mil per year means CDG is worth about $1.73. All this assumes a PE of 15x which is slightly higher than its 5 year average PE

What matters is how Mr. Market is valuing CDG with its declining taxi profits.

With lower taxi fares due to Grab and Taxi Drivers needing to sustain a sufficient income, it will be naive for shareholders to say the Taxi Division will continue to make 150mil per year nor is smart to pay for CDG for a multiple of 20x.

(21-09-2017, 05:13 PM)CY09 Wrote: So how much does one think is the value of the "new comfort"?

A total erasure of the taxi's profits means CDG may be worth $1.08 per share; while assuming the taxi Division continues to earn 100 mil per year means CDG is worth about $1.73. All this assumes a PE of 15x which is slightly higher than its 5 year average PE

Probably somewhere in between. And then buy at half that price. If it doesn't come close to my buy price, I will just look elsewhere. Now it is about $2 per share, still very far away. But the price competition in the taxi market is also far from over... 

Maybe can revisit this one year later. Same for SPH, M1, Starhub too. 

(21-09-2017, 10:38 AM)yeokiwi Wrote: We are seeing a gradual demise of the traditional industries and specifically GLCs.

NOL was gone.
ComfortDelgro is panting.
SPH is selling papers that nobody wants to read
Mediacorps is producing dramas that nobody watches.
Keppel and Semcorp.. not sure whether they can survive the oil and gas downturns.

Since NOL was sold off, it has turned around and made very good profits. A friend of mine remarked that NOL is now being run by an entrepreneur while in the past, it was run by an administrator.