CDG’s overseas business however is expected to recover at a slower pace, as the analysts predicts earnings recovery for this segment to likely be visible only from 2H2021. From conversations with taxi drivers, the analysts notes that business has improved significantly from the lows during the circuit breaker period. CDG has also mentioned in its latest business update that ridership has recovered to 80% of pre-Covid-19 levels. And on its new ride-hailing service, Jaiswal says, “With Grab expected to focus more on non-transport businesses – such as deliveries and its upcoming digital bank – as it plans to undertake an IPO soon, we believe CDG sees this as an opportunity to further cement its position in Singapore’s land transport industry.” Overall, the analyst views current valuations of 19 times FY2021 P/E as compelling and expects a strong y-o-y earnings growth this year. Similarly, Maybank Kim Eng continues to rate CDG “buy” with an unchanged target price of $1.88, while recommending investors to short Air Asia. In a Feb 3 report, analyst Kareen Chan says, “For trading-oriented investors, we recommend a pair trade of Long CDG and Short AirAsia, presenting a total return of 75%. We believe the faster recovery in land transport vs aviation will catalyse the divergence in share price performance.”
SEE: ComfortDelGro trials new ride-hailing service