ComfortDelGro - Phillip Securities 2021-05-17: Slow Road To Recovery, But Rolling In Cash

COMFORTDELGRO CORPORATION LTD (SGX:C52) | SGinvestors.io COMFORTDELGRO CORPORATION LTD (SGX:C52)

ComfortDelGro - Slow Road To Recovery, But Rolling In Cash

  • ComfortDelGro (SGX:C52)'s 1Q21 PATMI of S$56.2mn was 29% of our FY21 expectations. Earnings were supported by government relief of S$33mn.
  • Public transport EBIT down 47% y-o-y to S$17mn, excluding government relief. Singapore ridership at 65% of pre-pandemic levels. Australia bus services stable.
  • FCF surged to S$101.6mn from S$38.6mn in 1Q20. Cash from operations was S$224.9mn (1Q20: S$105.5mn).
  • No change in our BUY recommendation and DCF target price of S$1.83 (WACC 7.7%) for ComfortDelGro.



The Positives


Improving taxi profitability.

  • Taxi EBIT jumped to S$14mn, excluding relief. This came from lower rebates and operating costs, namely staff costs.

Surging cash flows.

  • Operating cash flows more than doubled y-o-y to S$224.9mn, thanks to better profits and government relief.
  • ComfortDelGro's net cash spiked to S$338.9mn from S$190.5mn three months earlier.


The Negatives


Public transport’s turnaround weak.

  • Public transport EBIT was down 47% y-o-y to S$17mn, excluding relief. Rail revenue was weak, with ridership at 65-79% of pre-COVID 19 levels. Australia was stable while the UK remained affected by a lack of tourism travel.


Outlook

  • The recovery is clouded by a resumption of lockdown and stricter social distancing in Singapore. Lower mobility will hurt rail ridership and also raises the need for higher taxi rental rebates from the current S$10/day.


Maintain BUY and target price of S$1.83 for ComfortDelGro






Paul Chew Phillip Securities Research | https://www.stocksbnb.com/ 2021-05-17
SGX Stock Analyst Report BUY MAINTAIN BUY 1.830 SAME 1.830



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