Maybank Research Pte Ltd

May 15, 2025

ComfortDelGro (CD SP): A Matter of Timing – Expect Sequential Growth

1Q25 Performance and Outlook

ComfortDelGro’s (CD SP) 1Q25 core PATMI reached SGD51.2m, marking a 51.9% YoY increase.
This performance represents approximately 22% and 21% of Maybank Investment Bank Group (MIBG) and consensus full-year forecasts, respectively. [[1]]
Excluding non-cash purchase price allocation (PPA) amortization for CMAC, A2B, and Addison Lee, alongside other one-off items, the underlying operational improvements are notable. [[1]]
Operating profit in Singapore improved due to cost control and efficiency gains. [[1]]
Net profit was affected by higher net interest expenses from increased borrowings used to finance overseas acquisitions in the previous year. [[1]]
Maybank maintains FY25-27E forecasts and a DCF-based Target Price (TP) of SGD1.64, advising investors to BUY on share price weakness. [[1]]

Public transport revenue increased by 2.6% YoY to SGD760m in 1Q25. [[1]]
The growth was primarily driven by the new UK Metroline Manchester contract initiated in January 2025 and higher rail fare revenue in Singapore. [[1]]
These gains were partially offset by lower service fees for buses due to the loss of the Jurong West package from September 2024. [[1]]
EBIT margin rose 1.6 percentage points YoY to 4.8%, remaining flat QoQ. This improvement is attributed to the renewal of the UK Metroline London contract at better margins and the easing of bus driver shortages in Australia. [[1]]
SBS Transit has bid for the PT220 Tampines bus tender, with results expected in July/August 2025. The new package is slated to commence on July 16, 2026. [[1]]

Taxi & private hire revenue and EBIT experienced substantial growth, surging by 74% and 51% YoY to SGD258m and SGD35m, respectively, in 1Q25. [[1]]
This surge was largely driven by contributions from A2B (SGD2.9m operating profit) and Addison Lee (SGD7.2m operating profit). [[1]]
EBIT margin narrowed by 2.1 percentage points YoY to 13.6%, impacted by seasonality and increasing market competition, particularly with new ride-hailing entrants in Singapore. [[1]]
CD’s taxi fleet has decreased to over 8,200, while the company has onboarded approximately 6,500 private hire drivers to its Zig platform. [[1]]

Overseas turnover accounted for 52.6% of total revenue in 1Q25, up from 43.3% in 1Q24. [[2]]
This milestone reflects the contributions from recent acquisitions including CMAC, A2B, and Addison Lee. [[2]]
Management reports that Point-to-Point (P2P) businesses and technology integrations are progressing well following the deal completions. [[2]]
CMAC’s Suntransfers secured a major exclusive contract with On The Beach, a leading UK online package holiday specialist with approximately 2 million passengers annually. [[2]]

ComfortDelGro is a land transport conglomerate with diversified interests in taxi, bus, and rail operations globally. [[2]]
52-week High/Low (SGD): 1.54/1.33 [[2]]
3-month Average Turnover (USDm): 11.4 [[2]]
Free Float (%): 93.8 [[2]]
Issued Shares (m): 2,167 [[2]]
Market Capitalization: SGD3.3B / USD2.5B [[2]]
Major Shareholders: Ameriprise Financial Inc (6.8%), BlackRock Inc (5.0%), T Rowe Price Group (2.8%) [[2]]

The report includes a price performance chart comparing ComfortDelGro’s stock performance against the Straits Times Index. [[2]]
Absolute Performance: -1M (8%), -3M (10%), -12M (6%) [[2]]
Relative to Index: -1M (-1%), -3M (10%), -12M (-10%) [[2]]

Key financial metrics and forecasts for FY23A through FY27E are summarized below:

FYE Dec (SGD m)	FY23A	FY24A	FY25E	FY26E	FY27E
Revenue	3,880	4,477	4,862	4,931	4,993
EBITDA	636	699	746	739	756
Core net profit	173	205	231	237	242
Core EPS (cts)	8.0	9.5	10.7	10.9	11.2
Core EPS growth (%)	26.6	18.6	12.5	2.4	2.2
Net DPS (cts)	6.7	7.8	8.5	8.7	8.9
Core P/E (x)	17.5	15.6	14.3	13.9	13.6
P/BV (x)	1.2	1.2	1.2	1.2	1.2
Net dividend yield (%)	4.8	5.3	5.6	5.7	5.9
ROAE (%)	6.9	8.1	8.7	8.6	8.6
ROAA (%)	3.7	3.9	4.0	4.1	4.1
EV/EBITDA (x)	4.6	5.5	5.3	5.4	5.3
Net gearing (%) (incl perps)	net cash	6.3	6.7	8.0	7.9
Consensus net profit	–	–	238	262	274
MIBG vs. Consensus (%)	–	–	(2.8)	(9.5)	(11.5)

The report includes a DCF (Discounted Cash Flow) model to derive the target price. [[2]]
Key DCF parameters: Cost of equity 9.0%, Cost of debt 4.0%, Debt/capital ratio 0.15, Tax rate 0.20, Risk-free rate 2.5%, Beta 1.0, Market return 9.0%, Terminal growth 0.5%, WACC 8.4%. [[2]]

ComfortDelGro operates in public transport and taxis across Singapore, Australia, UK/Ireland, and China. [[3]]
Singapore is the largest EBIT contributor (73%), followed by Australia (18%), China (7%), and UK/Ireland (2%). [[3]]
Public transport contributes the most to EBIT (44%), with about 85% of revenue from regulated returns, followed by taxi & Private Hire (39%) and others (17%). [[3]]
The taxi industry is stabilizing due to regulators leveling the playing field, and ride-hailing companies are focusing on profitability. [[3]]
CDG aims to diversify its geographical exposure through M&As and overseas tenders. [[3]]

Key historical events influencing the share price include Uber’s exit via merger with Grab, Gojek’s entry heightening competition, rental waivers during Covid-19, a rail contract in Auckland, and a shuttle bus contract with NUS. [[3]]

ComfortDelGro is considered more defensive post-Grab-Uber consolidation, with increased contribution from public transport and overseas expansion. [[3]]
Public transport remains the key revenue driver, with taxis and overseas expansion providing incremental growth. Ridership growth is a critical metric. [[3]]
The company maintains strong cash flow generation to support a dividend payout ratio of at least 75%. [[3]]

EPS, DPS and FCF per share (SGD)