CGS International Securities
August 14, 2025

ComfortDelGro Rides Global Growth Wave: In-Depth Financial and Strategic Analysis for 2025

Introduction: ComfortDelGro’s Global Ambitions Accelerate

ComfortDelGro, a leading public transportation operator based in Singapore, is rapidly expanding its international footprint. With over half of its revenue now derived from overseas markets, the company is leveraging strategic acquisitions and successful tender wins to drive robust financial growth and strengthen its position in key global markets. This comprehensive analysis covers ComfortDelGro’s recent financial performance, operational highlights, ESG commitments, and competitive standing in the global transportation sector.

Financial Highlights: Strong 1H25 Performance and Upbeat Outlook

ComfortDelGro’s first half of 2025 showcased impressive growth:

• 1H25 net profit reached S\$106 million, up 11% year-over-year and representing 46% of the full-year forecast.
• 2Q25 net profit stood at S\$57.7 million, a 19% increase quarter-on-quarter and a 5% rise year-on-year.
• Revenue for 1H25 surged to S\$2,423 million, a 14.4% jump from the previous year, with overseas operations contributing 54.3%.

Key drivers included:

• Enhanced UK public transport margins through London bus contract renewals.
• Stronger taxi segment margins, bolstered by consolidating new acquisitions such as A2B and Addison Lee.

Table: Selected Financial Metrics (S\$ million, unless stated)

Operational Review: Segmental Strength and Overseas Expansion

Segment Performance

• Public Transport: 2Q25 revenue rose 7% quarter-on-quarter and 5% year-on-year, with EBIT margin steady at 4.8%.
• Taxi/PHV: Revenue for 2Q25 was S\$262 million, up 46% year-on-year, as newly acquired entities fueled growth. However, segment EBIT margin dipped to 13% from 22% a year ago, reflecting integration costs and competitive pressures.
• Other Private Transport: 2Q25 revenue climbed to S\$120 million, up 28% quarter-on-quarter and 11% year-on-year.
• Inspection & Testing Services: Strong 29% year-on-year revenue growth in 2Q25, with EBIT margin at 27.4%.
• Others: Stable, contributing S\$24 million in 2Q25.

Overseas Expansion

• Overseas operations now generate over half of total revenue, largely due to the successful integration of Addison Lee (UK) and Metroline Manchester contracts.
• Upcoming contributions are anticipated from the Victoria public bus contracts (Australia) and a new Stockholm Metro JV (Sweden), with an 11-year contract starting late 2025.
• UK operational margins are set to improve further with continued Metroline contract renewals at attractive double-digit margins.

Tender Pipeline: Positioned for Future Growth

ComfortDelGro is actively pursuing a robust global tender pipeline for 2025-2026, spanning multiple regions and modes of transport:

• Targeting key rail and bus opportunities in UK/Europe, Singapore, and Australia.
• Notable tenders include the Copenhagen Metro, various UK/Europe bus contracts (with margins ranging from high single-digit to low double-digits), Singapore’s Cross Island Line, Sydney Metro West, Melbourne Trains MR5 (combined S\$7 billion contract value), and the Melbourne MZF 2 bus package.
• Securing these high-value projects could significantly boost ComfortDelGro’s long-term revenue base and cement its market position in critical growth regions.

Valuation and Shareholder Returns

• The stock is rated “Add” with a target price of S\$1.70, representing an 11.1% upside from the current price of S\$1.53.
• Valuation is based on 16x FY26F P/E, a premium of 0.5 standard deviations above its five-year average, reflecting solid UK contributions and global tender prospects.
• Dividend yield is forecast at 5.49% for 2025, rising to 6.01% by 2027.
• Major shareholders include Silchester International Investors (8.0%), Columbia Threadneedle Investments (5.0%), and Vanguard Group (2.8%).

Peer Comparison: ComfortDelGro in the Global Context

Table: Key Peer Metrics (CY25F unless stated)

ESG Commitments: ComfortDelGro’s Sustainability Pledge

ComfortDelGro is firmly committed to sustainability and ESG leadership:

• Aims for a 55% reduction in greenhouse gas (GHG) emission intensity by 2032 (base year: 2019).
• End-2023 fleet of over 33,000 vehicles across seven countries, with hybrid or electric vehicles accounting for a growing proportion: 48% in Singapore, 67% in China, 22% in Australia, and 24% in the UK.
• Consistent inclusion in the Dow Jones Sustainability Index (Asia Pacific) for six consecutive years.
• Received commendation for social initiatives, such as rental waivers for taxi drivers during the Covid-19 outbreak.
• Industry-leading safety and reliability: Downtown Line (DTL) clocked 8.12 million train-kilometers in 2023, outperforming the Singapore MRT network average and maintaining status as the world’s most reliable MRT line for three years running.
• GHG emission intensity (tonnes of CO2e per S\$ million revenue) has declined over the past three years, supported by the ongoing fleet transition to renewable energy sources.

Balance Sheet and Key Ratios

• Total cash and equivalents projected at S\$820 million by end-2025.
• Net gearing expected at 6.8% for 2025, rising marginally in subsequent years.
• Operating EBITDA margin forecast at 14.8% for 2025, with net profit margin at 4.4%.
• Return on invested capital (ROIC) at 8.12% and return on average assets at 5.04% in 2025.
• Net cash per share is expected to be negative from 2024 through 2027 as the company invests in overseas expansion and acquisitions.

Risks and Catalysts

Key potential catalysts for re-rating include:

• Stronger-than-expected UK earnings.
• Major contract wins from the robust global tender pipeline.

Downside risks:

• Acquisition integration challenges.
• Margin pressures amid competitive markets and integration costs.

Recommendation

ComfortDelGro is well-positioned for continued growth, driven by its overseas expansion strategy, strong financials, ESG leadership, and robust tender pipeline. With an “Add” rating and a target price of S\$1.70, the stock offers a compelling combination of capital appreciation and dividend yield for investors seeking exposure to the global transportation sector.