ComfortDelGro - Maybank Kim Eng 2021-04-04: Shifting To A Higher Gear

COMFORTDELGRO CORPORATION LTD (SGX:C52)

ComfortDelGro - Shifting To A Higher Gear

ComfortDelGro's share price broke out of its consolidation at S$1.72. This indicates that the overall signal has shifted from neutral to bullish and a new upcycle is about to unfold to the next resistance at S$1.81, then S$1.99.
From a fundamental perspective, vaccine rollout across key markets such as Singapore, Australia and UK are on track and the easing of work-from-home (WFH) measures should lift demand for domestic transport. As a result, ComfortDelGro (SGX:C52) is well poised to enjoy positive operating leverage as ridership normalizes.
Potential revision of rail framework could lead to an additional 49% upside to our FY21E EPS forecast by S$0.043 to S$0.013. See previous report ComfortDelGro - Maybank Kim Eng 2021-03-09: Shaping Up.

The government has allowed up to 75% of staff to return to the workplace at any one time from 5 Apr onwards. This is a jump from the current 50%. Concurrently, WFH is no longer the default, as workplaces are now permitted to adopt a more flexible way of working such as staggered start times.
Meanwhile, caps on events are also easing from 24 Apr onwards. For instance, B2B events being piloted can have up to 250 attendees. Those with pre-event testing will be allowed to have up to 750 attendees, in zones of up to 50 attendees each.

ComfortDelGro’s key operating countries (Singapore, Australia and the UK) are on track/accelerating the pace of vaccinations.
- Singapore has one of the highest vaccination rates among their Asian peers.
- Similarly, UK is ranked top among its European peers.
- In Australia, the vaccination supplies will be bolstered after its pharmaceutical regulator approved the local production of AstraZeneca vaccine by CSL.
We expect subsequent easing of movement restrictions and WFH measures. This should lift domestic transport demand, which bodes well for ComfortDelGro.
See

Our chartist Nik Ihsan Raja Abdullah has also shifted to a bullish stance for ComfortDelGro. We opine that the consolidation is likely at its tail end, with ComfortDelGro's share price forming a new base right above 13, 33 & 88-day SMA lines. This indicates that the overall trend has shifted from neutral to bullish. See chart in report attached below.
Concurrently, the bullish readings in RSI and DeTrend also suggest that a new upcycle is about to unfold.
ComfortDelGro's share price techncal support at S$1.64, S$1.59.
ComfortDelGro's share price technical resistance at S$1.81 then S$1.99.
See also the DCF-valuation details of ComfortDelGro in report attached below.

Kareen Chan Maybank Kim Eng Research | Nik Ihsan Raja Abdullah CFTe Maybank Kim Eng | https://www.maybank-ke.com.sg/ 2021-04-04

SGX Stock Analyst Report BUY MAINTAIN BUY 1.880 SAME 1.880