COMFORTDELGRO CORPORATION LTD
C52.SI
ComfortDelGro Corp Ltd - In line with expectations
- S$995.6mm revenue exceeded consensus expectations of S$927.0mn by 7.4%; but in line with our expectations of S$983.0mn
- S$73.4mn PATMI in line with consensus expectations of S$73.7mn; and in line with our expectations of S$74.1mn
- S$10.9mn negative foreign currency translation effect on revenue
Bus: Business as usual
- On the home-front, there was no update on the timing of the tender for the third bus package under the Government Contracting Model (GCM).
- Handover for the Bulim and Loyang bus packages are expected to be in June and September, respectively.
- Newly elected Mayor of London will be introducing a bus hopper-fare in September; no impact on ComfortDelGro's operations as Transport for London (TfL) retains revenue risk.
- No major changes to the Australia operations, as there are no contracts expiring.
Taxi: Growth could start moderating
- Management guided that taxi hire rate remains at 100% (save for the spares), but the queue for hirers has "dramatically shrunk" as drivers have gone over to the privatehire services.
- Taxi fleet stood at 17,024 and its expansion will be somewhat moderated going forward.
- Taxi drivers' benefits grew 9.9% yoy; this trend is likely to be maintained in order to retain hirers and entice new hirers.
Rail: Touch-and-go on breakeven for Downtown Line (DTL)
- Average daily ridership on DTL in 1Q16 grew by 205.7% yoy to 206k passenger trips, following the commencement of revenue service of DTL2.
- Ridership is not as high as Management hoped it to be, and DTL is loss-making.
- Management views that it is possible to breakeven in 3Q, but breakeven would still most likely come when the full line is open.
- Higher cost is expected in 3Q and 4Q, coming from the build-up of headcount in preparation for DTL3.
Our View
- Maintain "Accumulate" rating with unchanged target price of S$3.21 The results were in line with our estimates and hence we do not make any changes to our forecasts.
- The target price represents an implied 20.2x FY16e forward P/E multiple.
Richard Leow CFTe
Phillip Securities
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http://www.poems.com.sg/
2016-05-13
Phillip Securities
SGX Stock
Analyst Report
3.21
Same
3.21
