Comfort Delgro

[Nick]

It is remarkable that they are able to continue posting growth despite being weighed down by loss making SBS Transit. The decision to venture overseas by acquiring foreign operators looks like a very shrewd move.

[greengiraffe]

PLAY OF THE WEEK
ComfortDelGro's wheels of fortune

Analysts upbeat over its prospects as share price hits 7-year high
Published on May 17, 2014 1:36 AM


ComfortDelGro's large taxi fleet here enables it to consistently report industry-high earnings, say Maybank Kim Eng analyst Derrick Heng, who has a buy call with a $2.40 price target. -- ST FILE PHOTO

By Alvin Foo Economics Correspondent

TRANSPORT stocks shone the brightest this week despite the holiday-shortened trading sessions, and none sparkled more so than ComfortDelGro.

Its shares continue to set fresh seven-year peaks of late, crossing levels not seen since just before the global financial crisis.

The counter closed at $2.28 yesterday, bringing its total gains to 11.8 per cent for the week.

Two key factors account for the transport operator's recent resurgence - upbeat first-quarter earnings released on Monday and rising hopes of positive changes in the public transport policy.

Traders are not following the "sell in May and go away" market adage with regard to ComfortDelGro, said a market observer.

The stock shot up eight cents alone on Monday before rising another nine cents on Wednesday after the Vesak Day break, then charged up six cents on Thursday before capping its sterling display with a one-cent gain yesterday.

Investors also like ComfortGelGro for its defensive nature, which means it is not as volatile during times of market turbulence.

DBS Vickers analyst Andy Sim called the stock a "consistent performer", noting that the group had delivered 12 consecutive quarters of year-on-year growth in its profit, and also showed a broad-based revenue increase.

"While its Singapore bus performance continues to be in the red arising from a difficult operating environment, we believe its operating losses have bottomed out, with recent increases in fares and higher ridership," said Mr Sim, who has a buy call with a $2.30 price target.

Maybank Kim Eng analyst Derrick Heng, who has a buy call with a $2.40 price target, identified three major factors working in its favour:

Its large taxi fleet here enables it to consistently report industry-high earnings.
Its diversified geographical and business exposure offers investors stable and sustainable investment returns.
The full opening of the Downtown Line over the next three years will see SBS Transit, which is part of the ComfortDelGro Group, gain rail market share and become a major operator.

"We believe the impending announcement by the regulators on transition details for its rail and bus business model in Singapore is a key event to watch," Mr Heng added.

Although both ComfortDelGro and SMRT Corp shares have surged in recent weeks, brokers continue to favour the former over the latter.

DMG analyst Edison Chen, who has a buy rating with a $2.48 price target, noted: "As the incoming changes are likely for bus operations rather than rail, we continue to prefer ComfortDelGro over SMRT Corp, given the former's large exposure to the bus business."

Analysts say one key factor which gives ComfortDelGro the edge over SMRT is its exposure to overseas businesses.

ComfortDelGro operates in seven countries including Australia, China and Britain, and has a global network of 46,100 vehicles comprising buses, taxis, trains and rental vehicles. It is active in 12 cities in China.

OCBC Investment Research analyst Andy Wong noted that ComfortDelGro's overseas operations continued their robust growth, "conjuring up a 13.2 per cent and 10 per cent year-on-year growth in revenue and operating profit".

Mr Wong, who has a buy rating with a $2.30 price target, added that besides the Australia bus business which is expected to register a decline in revenue, the management indicated that its remaining business segments are expected to either maintain or increase their revenue.

alfoo@sph.com.sg

[CityFarmer]

A report on the company. Rental will only go one way, up, up and up. Same for the taxi fare

(not vested)

Hot stocks: ComfortDelgro to benefit most from taxi market shake-up
21 May 2014 11:24
New entrants to Singapore's taxi market, armed with innovative app-based business models, look set to shake up the taxi market in Singapore.

Booking income of incumbent players like ComfortDelgro and SMRT may be dented initially. But the entry of GrabTaxi and MoobiTaxi, with their apps that channel passengers to taxi drivers, may be beneficial to all operators in the long run.

In its 'Land Transport' report released on Wednesday, Maybank Kim Eng said there should be "minimal impact on the profitability of taxi operators''.

"Even if booking income plunges by 20 per cent, the potential loss of profit would translate to a mere 3.4 per cent or 4.3 per cent of ComfortDelGro's and SMRT's Singapore taxi earnings before interest and taxes (respectively). This is an even smaller proportion of the respective groups' total profit," analyst Derrick Heng said.

"(In the) near term, we believe operators may see their booking income take a knock as new entrants garner a slice of the pie. But we argue that these new entrants would augment the overall industry revenue pool as the booking system gains popularity over curbside flag-down. Thus, over time, taxi operators may raise the rental rates for their fleet and the fee gain would more than compensate for any near-term loss of booking income."

For this reason, he maintained "buy" on ComfortDelGro at a target price of S$2.40, and kept his "sell" recommendation on SMRT with a target price of S$0.50, given that ComfortDelGro has the largest taxi fleet in Singapore and is thus most exposed to the impending changes.

As at 10.50am, ComfortDelGro was down 9 cents at S$2.29, while SMRT was trading three cents lower at S$1.445. But the latter could be correcting from a 14.5 cents or 11 per cent jump in share price to a 11-month high of $1.475 on yesterday's stockmarket.

Currently, only one-tenth of taxi journeys are completed via booking systems, but the penetration rate is expected to increase by 5 percentage points within the next three years as passengers take to the new apps.

This implies that the industry's annual revenue pool could go up by S$52 million or S$5.16 per taxi per day, Mr Heng said.

Asset ownership, however, would remain vital in the taxi ecosystem and operators are likely to lift rental fees over time in response, he added.

Source: Business Times Breaking News

[LittleBoyInvestor]

I wonder will CD be affected by new upcoming ideas like Uber. I guess the Taxi market will probably be affected.

Anybody heard of Uber before?

Basically it's a company that hire drivers to pick up passenger. Passengers use the Uber App, set pick up location and destination. The driver will pick the passenger up at where he/she is without the need to pay by cash. Everything is cashless and paid via credit card. End of the month, it will be bill to your credit card.

These drivers register under Uber and they do not need a taxi license to operate. They operate in their own vehicle and class into 2 different catergories UberX and Uber.

Uber = More high class and higher CC's car (Eg. Lambo, Rolls Royces) but more expensive.
Uberx = Mid range/Low range class and lower CC's car (Eg. Mist. Lancer)

I got on board once before and had a nice chat with the uncle inside. He said that he earns a certain percentage of the ride. The rest goes to Uber. Sometimes, the fare rates are much cheaper than Taxi rate.

So if Uber really grab a big share in the Taxi market, I wonder how much CD will be affected.

Cheers!
Little Boy
http://littleboyinvestment.blogspot.sg

[desmondxyz]

I wonder will CD be affected by new upcoming ideas like Uber. I guess the Taxi market will probably be affected.

Anybody heard of Uber before?

Basically it's a company that hire drivers to pick up passenger. Passengers use the Uber App, set pick up location and destination. The driver will pick the passenger up at where he/she is without the need to pay by cash. Everything is cashless and paid via credit card. End of the month, it will be bill to your credit card.

These drivers register under Uber and they do not need a taxi license to operate. They operate in their own vehicle and class into 2 different catergories UberX and Uber.

Uber = More high class and higher CC's car (Eg. Lambo, Rolls Royces) but more expensive.
Uberx = Mid range/Low range class and lower CC's car (Eg. Mist. Lancer)

I got on board once before and had a nice chat with the uncle inside. He said that he earns a certain percentage of the ride. The rest goes to Uber. Sometimes, the fare rates are much cheaper than Taxi rate.

So if Uber really grab a big share in the Taxi market, I wonder how much CD will be affected.

Cheers!
Little Boy
http://littleboyinvestment.blogspot.sg

Uber is a great idea. But I'm a bit concerned about giving my full credit card info including the CVV code while creating the account....

[GPD]

Presumably they need to have a code of ethic and conduct to protect and account for passenger safety?
Presumably the drivers also need to have insurance cover in case they picked up some dubious passengers?

[LittleBoyInvestor]

I wonder will CD be affected by new upcoming ideas like Uber. I guess the Taxi market will probably be affected.

Anybody heard of Uber before?

Basically it's a company that hire drivers to pick up passenger. Passengers use the Uber App, set pick up location and destination. The driver will pick the passenger up at where he/she is without the need to pay by cash. Everything is cashless and paid via credit card. End of the month, it will be bill to your credit card.

These drivers register under Uber and they do not need a taxi license to operate. They operate in their own vehicle and class into 2 different catergories UberX and Uber.

Uber = More high class and higher CC's car (Eg. Lambo, Rolls Royces) but more expensive.
Uberx = Mid range/Low range class and lower CC's car (Eg. Mist. Lancer)

I got on board once before and had a nice chat with the uncle inside. He said that he earns a certain percentage of the ride. The rest goes to Uber. Sometimes, the fare rates are much cheaper than Taxi rate.

So if Uber really grab a big share in the Taxi market, I wonder how much CD will be affected.

Cheers!
Little Boy
http://littleboyinvestment.blogspot.sg

Uber is a great idea. But I'm a bit concerned about giving my full credit card info including the CVV code while creating the account....

Yes, exactly.

This was my initial doubt too. It's a risk to give your full credit card info. I was very skeptical about this idea too.

Anyway, it seems like Uber is currently dominating a lot in European country and even expanding into Singapore. Google even pump in $250 million into Uber.

http://www.forbes.com/sites/roberthof/20...on-demand/

Cheers!

Little Boy
http://littleboyinvestment.blogspot.sg

[greengiraffe]

http://www.businesstimes.com.sg/premium/...m-20140814

PUBLISHED AUGUST 14, 2014
ComfortDelGro's Q2 profit rises 9.9% to S$75.7m
Broad-based growth with revenue crossing billion-dollar mark
BYSAMUEL EE
samuelee@sph.com.sg

Improvement: Q2 taxi revenue was 6.7 per cent higher at S$320.1 million. - PHOTO: BLOOMBERG
NET profit at ComfortDelGro rose 9.9 per cent to S$75.7 million for the second quarter ended June 30, 2014, as group revenue grew 11.9 per cent to a record S$1.016 billion - the first time it has crossed the S$1 billion mark.
The land transport giant said growth was broad-based, with all business segments contributing to the increase. The actual revenue growth of $97.5 million was boosted by a positive foreign currency translation of $10.4 million due to the stronger pound sterling.
The group's overseas operations accounted for 41.2 per cent of revenue - up from 38.9 per cent in the corresponding period a year ago. Q2's overseas operating profit accounted for 50.7 per cent of group operating profit, up from 46.8 per cent a year ago.
Total operating expenses in the second quarter jumped 12.6 per cent to S$896.4 million mostly on higher staff, contract services, depreciation and energy costs.

[theasiareport]

I've read that Grab-Taxi is disrupting the industry in Singapore specifically. Does anyone have any experience with it?

[CityFarmer]

I've read that Grab-Taxi is disrupting the industry in Singapore specifically. Does anyone have any experience with it?

You may find your info from this old thread

http://www.valuebuddies.com/thread-5389.html