Maybank Research Pte Ltd May 15, 2025 ComfortDelGro: A Matter of Timing – Expect Sequential Growth ComfortDelGro (CD SP) Investment Overview ComfortDelGro (CD SP) is analyzed with a Buy rating and a target price (TP) of SGD 1.64, indicating an 8% upside. The recommendation is to Buy on share price weakness. 1Q25 Financial Performance Core PATMI: 1Q25 core PATMI reached SGD 51.2m, a 51.9% year-over-year increase, representing approximately 22%/21% of MIBG/consensus full-year forecasts [[1]]. Exclusions: Results exclude non-cash purchase price allocation (PPA) amortisation for CMAC, A2B, and Addison Lee, along with other one-off items [[1]]. Operating Profit: Improved across Singapore segments due to cost control and internal efficiency gains [[1]]. Net Profit Impact: Higher net interest expense from increased borrowings for overseas acquisitions last year dragged net profit [[1]]. Forecasts: FY25-27E forecasts remain unchanged with a DCF-based TP of SGD 1.64 [[1]]. Public Transport Segment Analysis Revenue Growth: 1Q25 public transport revenue increased by 2.6% YoY to SGD 760m [[1]]. Key Drivers: Growth attributed to the UK Metroline Manchester contract (started in Jan’25) and higher rail fare revenue in Singapore [[1]]. Offsetting Factors: Partly offset by lower service fees for buses due to the loss of the Jurong West package from Sep’24 [[1]]. EBIT Margin: Rose 1.6ppt YoY to 4.8% (flat QoQ) due to renewal of the UK Metroline London contract at better margins [[1]]. Industry Dynamics: Industry-wide shortage of bus drivers in Australia is easing [[1]]. Tender Bids: SBS Transit bid for the PT220 Tampines bus tender, with results expected in Jul/Aug’25. This new package will commence on 16 Jul 2026 [[2]]. Taxi & Private Hire Performance Revenue/EBIT Surge: Taxi & private hire revenue/EBIT surged by 74%/51% YoY to SGD258m and SGD35m in 1Q25 [[2]]. Key Contributions: Driven by contributions from A2B (SGD2.9m operating profit) and Addison Lee (SGD7.2m operating profit) [[2]]. EBIT Margin: Narrowed by 2.1ppt YoY to 13.6%, partly due to seasonality and increased market competition, especially with more ride-hailing players in Singapore [[2]]. Fleet Size: CD‘s taxi fleet size has been shrinking to >8,200, but has onboarded about 6,500 private hire drivers to its Zig platform [[2]]. Overseas Revenue Milestone Turnover Contribution: Overseas turnover accounted for 52.6% of total revenue (1Q24: 43.3%) for the first time [[2]]. Acquisition Impact: Last year’s acquisitions of CMAC, A2B, and Addison Lee contributed in 1Q25 [[2]]. Integration Progress: Management noted that Groupwide Point-to-Point (P2P) businesses and technology integrations are progressing well following completion of the deals [[3]]. Contract Wins: CMAC’s Suntransfers secured a major exclusive contract with On The Beach, a large UK online package holiday specialist with a customer base of approximately 2m passengers annually [[3]]. Share Price and Target Current Price: SGD 1.52 [[3]]. 12m Price Target: SGD 1.64 (+8%) [[4]]. Previous Price Target: SGD 1.64 [[4]]. Company Description ComfortDelGro is a land transport conglomerate with diversified business interests in taxi, bus, and rail globally [[4]]. Key Statistics 52w High/Low (SGD): 1.54/1.33 [[4]]. 3m Avg Turnover (USDm): 11.4 [[4]]. Free Float (%): 93.8 [[4]]. Issued Shares (m): 2,167 [[4]]. Market Capitalisation: SGD3.3B / USD2.5B [[4]]. Major Shareholders: Ameriprise Financial Inc (6.8%), BlackRock Inc (5.0%), T Rowe Price Group (2.8%) [[4]]. Price Performance
