Comfort Delgro

(24-05-2013, 01:02 PM)evolance Wrote: Huh..forced selling?
Pardon my limited knowlegde,how does slf sell?dump to public?if yes, shd be able to stablise and fufill margin calls at the bottom price they set for next 2 trading days?

Simialr to last sep when temasek dumped singtel shares?

more like other holders, who could be holding these on margin, could be forced to sell..

3.5 to slightly less than 4% for a global transport contractor with predetermined regulated growth - its a risky business especially since a super long term govt back union fund has bailed out.

Smells a big rat especially since transport costs is a big issue with the electorate. With huge supply constraint and mounting cost of living pressures, one should no longer look upon Comfort as a defensive counter.

Caveat Emptor

greengiraffe,

(1) singapore operation contributes 50%-55% of total operating profit. Of which SG bus and trains contributes about 5%-7% of total operating profit. DTL is new and loss-making (still not operational); NEL is relatively new, and yes maintenance going up but they are not making lots of $$$ there; buses, govt has tried to get private operators to come into the market but no success. So, there isn't really much the govt can do to squeeze out profit from here

(2) singapore taxis.. i doubt the govt can regulate this, except perhaps the COE quotas

so bottom line, i like the counter here, just waiting for a nicer level and wait for supply overhang to clear first before jumping in.. one negative point is they derive ~20% - 25% of operating profit from Australia, and we know how AUDSGD looks past 2 months..

Anyone thinks the company could become a potential takeover target in the upcoming months/years now that it no longer has a controlling major shareholder (the current largest one owns only ~6%)?

Takeover targets normally exhibit below characteristics:

(1) 2 or more controlling shareholders that have relatively deep pockets and the shareholders consider the company as its crown jewel or the company is been well positioned in growth markets. In the event at least 1 of the shareholder buys additional stake from SLF, then it may trigger suspicion and subsequently a bidding war then (example: Heineken and ThaiBev with APB)

(2) Severely undervalued by the market (maybe in the sunset industry) and controlling shareholder decides to take advantage of cheap credit (from low interest rates) to privatise it (example: DELL and some of the property counters)

IMHO, CDG doesnt seem to exhibit (1) and (2). Though i may be wrong because i do not have a clear idea on its controlling shareholder profile besides SLF. All i know is that CDG states that ~55% of its shareholders are majority based in UK/US.

But then again, in the era of cheap credit or rising stock prices (takeover through issuing your own stock), you can never rule it out.

http://www.businessday.com.au/business/v...2n8mf.html

Victoria slashes Cabcharge fee in half
Date
May 28, 2013 - 5:05PM
Madeleine Heffernan
Pin Itsubmit to redditEmail articlePrintReprints & permissions

Charge back ... Cabcharge has been told to slash credit fees in Victoria. Photo: Penny Stephens
Victorian taxi users who pay with a credit card will soon get a cheaper ride after the state government told monopoly payment company Cabcharge to slash card-payment fees.

The Napthine government cut the card surcharge on Cabcharge's electronic payment system from 10 per cent to 5 per cent on the recommendation of an 18-month inquiry into Victoria's taxis by former ACCC head Allan Fels.

The recommendation prompted Cabcharge's founder and CEO Reg Kermode to say: "Bugger it, if that's what you want, you can all go back to cash."

Shares in Cabcharge plunged 15.3 per cent, or 75 cents, to close at $4.15. Today's decline pushes the company's share price into negative territory for the year, to -5.25 per cent, valuing the Sydney-based business at $500 million.

Advertisement
Cabcharge says its electronic payment system is found in about 97 per cent of the Australia's taxis, as well as limousines and water taxis. There are about 5000 cabs in Victoria.

The Napthine government announced on it had accepted almost all of Fels' recommendations, including cutting the eftpos charge to 5 per cent of the fare.

Professor Fels said in 2012 that ''Cabcharge's tentacles reach everywhere in the industry and any substantial reform in Victoria and elsewhere would have an effect on Cabcharge."

The changes are expected to take three years to implement.

Cabcharge was contacted for comment.

With Adam Carey

(26-05-2013, 11:22 PM)greengiraffe Wrote: 3.5 to slightly less than 4% for a global transport contractor with predetermined regulated growth - its a risky business especially since a super long term govt back union fund has bailed out.

Smells a big rat especially since transport costs is a big issue with the electorate. With huge supply constraint and mounting cost of living pressures, one should no longer look upon Comfort as a defensive counter.

Caveat Emptor

My guess is that this has something to do with NTUC appearing as a PTO in the future - this makes SMRT/SBS/NTUC as the 3 players for the rail+bus operations, of which NTUC will play a co-op role. The current 2 players will prob sell their assets to a public trust and in the future, they will bid for parcels of services for a lease-fee, and revenue goes to the G. It is then the G's problem to either raise transport fees or to subsidise operations through taxes.

In selling its stake to below 5% (hence ceasing to be a SSH), SLF, and in turn NTUC, prevents any conflict of interests in its future role.

Given that SBS is currently hardly profitable, this will probably be marginally +ve for CDG. Just my guess.

(28-05-2013, 01:52 AM)weijian Wrote: Takeover targets normally exhibit below characteristics:

(1) 2 or more controlling shareholders that have relatively deep pockets and the shareholders consider the company as its crown jewel or the company is been well positioned in growth markets. In the event at least 1 of the shareholder buys additional stake from SLF, then it may trigger suspicion and subsequently a bidding war then (example: Heineken and ThaiBev with APB)

(2) Severely undervalued by the market (maybe in the sunset industry) and controlling shareholder decides to take advantage of cheap credit (from low interest rates) to privatise it (example: DELL and some of the property counters)

IMHO, CDG doesnt seem to exhibit (1) and (2). Though i may be wrong because i do not have a clear idea on its controlling shareholder profile besides SLF. All i know is that CDG states that ~55% of its shareholders are majority based in UK/US.

But then again, in the era of cheap credit or rising stock prices (takeover through issuing your own stock), you can never rule it out.

also want to add, looking at P/B ratio for CDG, just doesn't make sense for someone to buy..

i actually siding with GG now after looking CDG on a closer look, 3%+ yield with unexciting growth rate + 23% of operating profit from Australia with AUDSGD looking crap, i wld rather own big-cap REITS

Where will SLF invest those monies?

What I am about to write are mere speculations on my part: Recently, e2i has been rolling out training programs which provide bonus pay outs to applicants and NTUC is looking to improve the benefits for low-income union members. So it is possible that NTUC will receive more "contributions from SLF" instead of money from the government and e2i will receive money from SLF to fund its training programs