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SEE:ComfortDelGro reports 76.7% plunge in FY2020 earnings of $61.8 mil, remains in black thanks to government grants
RHB Group Research analyst Shekhar Jaiswal has, too, maintained “buy” on CDG with the same target price of $1.90, as he anticipates “strong profit growth” in FY2021, despite its subdued share price in the near-term, and potential earnings headwinds in the UK due to the lockdowns. Current valuations are also compelling, according to Jaiswal. On CDG’s results, the weakness y-o-y was “expected”. However, the 8% q-o-q improvement in revenue and 86% q-o-q rise in PATMI stood “in line” with Jaiswal’s expectations. “We maintain that gradual normalisation of business activities in Singapore, and CDG’s other key markets, should support an improvement in public transport ridership and the stabilisation of the taxi business in 2021,” he writes. “This should translate to more than 200% profit growth for the year. Earnings recovery in its overseas markets will likely be visible in 2HFY2021. Based on current forecasts, we estimate that a full recovery in earnings, to pre-Covid-19 levels, could take more than two years,” he adds.