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


ComfortDelGro - Shifting To A Higher Gear

Fundamental meets technical. Maintain BUY.

  • 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.
  • BUY ComfortDelGro with a DCF target price of S$1.88 (WACC 8.2%, LTG 1%).

Welcome back!

  • 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.

Vaccine rollout gathers pace

Technicals turning bullish

  • 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