The worst looks over for taxis

SINGAPORE (Sept 27): Phillip Capital is keeping an “overweight” recommendation on the land transport sector due to positive industry restructuring following the exit of Uber and the worst being over for the taxi industry.

The research house has also maintained its “accumulate” rating on ComfortDelGro with an unchanged target price of $2.78.

This month marks the second consecutive month that Singapore taxi companies – Comfort Taxi, CityCab and Prime – grew their fleets m-o-m.

Grab vanquishes Uber with local strategy, billions from SoftBank

SINGAPORE (Mar 27): As Uber Technologies Inc. looked to conquer ride-sharing around the world, Grab was focused on serving the 620 million people that share its home in Southeast Asia.

Helped by the deep pockets of SoftBank Group Corp., Grab emerged the winner on Monday when Uber agreed to swap its business in the region for a 27.5% stake. The deal is a vindication for co-founder Anthony Tan’s strategy of tailoring services to local needs and working with incumbent taxi operators instead of against them.

ComfortDelGro and Uber finally join forces

SINGAPORE (Dec 8): ComfortDelGro Corporation finally announced they will be entering into a joint venture (JV) with Uber Technologies.

See: ComfortDelGro and Uber in exclusive talks over possible alliance

According to the agreement, which is subject to regulatory approval, ComfortDelGro will be acquiring a 51% stake in Lion City Holdings, a car rental subsidiary that is wholly-owned by Uber in Singapore.

ComfortDelGro downgraded as taxi business slows

SINGAPORE (Nov 14): RHB Research is downgrading its call on ComfortDelGro (CDG) to “neutral” from “buy” with a lower target price of $2 from $2.60 previously, on expectations that the sequential decline in the group’s Singapore taxi fleet and hire-out rate will continue into 4Q17.

The new target price implies a P/E multiple of 14.5 times 2018F estimates, which is close to its historical average forward P/E of 15.2 times.

Rail segment to keep ComfortDelGro’s earnings in its comfort zone

SINGAPORE (May 15): OCBC continues to rate ComfortDelGro (CDG) at “buy” with a lower fair value estimate of $2.88 from $2.95 previously, following the release of the land transport group’s 1Q results on Friday.

(See also: ComfortDelGro 1Q earnings up 12% to $82.5 mil on one-off gain)

Competition for drivers to intensify as ComforDelGro gives dynamic pricing the cold shoulder

SINGAPORE (March 30): UOB Kay Hian is keeping its “hold” rating on land transport group ComfortDelGro (CDG) at a target price of $2.47, due to the lack of strong catalysts as the local taxi industry continues to undergo structural shifts with the recent rollout of a dynamic pricing fare structure.

To recap, the Land Transport Association (LTA) recently passed approval for taxi operators to introduce dynamic pricing for trips booked through mobile applications, which will serve as an additional option for commuters on top of metered-fare taxi bookings.

What does 2017 hold for transport companies?

SINGAPORE (Dec 8): CIMB is maintaining its lacklustre view of Singapore’s transport and air services companies amid stiff competition and other headwinds from foreign exchange and oil price volatility.

The only bright spark from the sector is ComfortDelgro Corporation, which has become the only remaining proxy to the local land transport sector following SMRT’s privatisation.

According to CIMB’s analyst Roy Chen, the group’s diversified business offers a stable outlook for 2017, even as each segment faces different market dynamics.

Fare cuts aren't too close for Comfort

SINGAPORE (Nov 14): ComfortDelgro’s share price fell more than 12% over the past month, in what Maybank Kim Eng considers an “overreaction” to the announcement of a 4.2% fare cut on Oct 27 from lower energy prices.

Maybank Kim Eng’s analysts Derrick Heng and John Cheong noted that the Public Transport Council has guided for an $8.9 million impact on SBS Transit’s rail operations, which is “manageable”.

They also added that the “cost relief from a broader deflationary environment should mitigate the downside to earnings.”

ComfortDelgro’s 3Q earnings rise 2.5% to $87.3 mil on lower expenditure

SINGAPORE (Nov 11): Transport group ComfortDelgro posted $87.3 million in earnings for 3Q16, 2.5% higher from $85.2 million in the same quarter a year ago on the back of lower expenditure, bringing earnings per share (EPS) in 3Q to 4.05 cents compared to 3.97 cents in 3Q15.

Group operating costs fell 3.3% to $888.2 million, as an increase of $12.4 million in actual operating costs was offset by a positive foreign currency translation effect of $43.0 million.

ComfortDelgro kept at ‘buy’ by UOB; special dividend expected

ComfortDelgro logo

SINGAPORE (July 1): UOB Kay Hian has maintained its “buy” recommendation and target price of $3.16 for ComfortDelgro (CD), adding that it expects limited impact from Brexit on its UK transport operations.

According to UOB’s estimates, CD’s UK business account for 25% of group revenue, and 19% of operating profit. Within the UK business, about 88% to 90% of revenue and 97% to 98% of operating profit comes from its bus operations, with the rest coming from its taxi business.

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