Broker: CGS International
Date of Report: September 1, 2025
ComfortDelGro’s 100% CityCab Acquisition: Earnings Growth, Global Expansion, and Sector Insights
Executive Summary: Key Developments in Singapore’s Public Transport Sector
ComfortDelGro (CDG) has solidified its foothold in Singapore’s point-to-point mobility sector by acquiring the remaining 46.5% stake in CityCab, making it a wholly owned subsidiary. This move, financed through bank facilities, is expected to deliver operational synergies, earnings accretion, and pave the way for further expansion both locally and internationally. CDG continues to deliver robust dividends and maintains healthy financials, while its valuation remains attractive compared to peers in the region.
ComfortDelGro’s Strategic CityCab Acquisition: Details and Rationale
- Acquisition Details: On September 1, 2025, ComfortDelGro acquired the remaining 46.5% of CityCab from ST Engineering Land Systems Ltd for S\$116.3 million. This increases CDG’s stake in CityCab to 100%.
- Strategic Rationale: Full ownership streamlines operations, integrates fleets, unifies the CityCab and Comfort brands, and enables better technology upgrades and EV transition strategies.
- Operational Impact: CityCab now represents about 25% of CDG’s Singapore taxi fleet of over 8,400 vehicles. The acquisition positions CDG to better shape its global point-to-point business and respond to evolving market demands.
Financial Impact: Valuation, Accretion, and Balance Sheet Health
- Deal Valuation: The acquisition was done at a price implying a 13x P/E, based on ST Engineering’s reported CityCab net profit of S\$8.7 million for 2024. CDG itself trades at roughly 14x FY25F PE, supporting a fair valuation.
- Balance Sheet: CDG’s net gearing rises from 19% to 22% post-acquisition, remaining at a healthy level.
- Earnings Accretion: The acquisition is estimated to add around 1.7% to CDG’s earnings, assuming the deal is fully debt funded at a 4% interest rate.
Long-term Strategic Outlook
The full integration of CityCab strengthens CDG’s core business in Singapore and enhances its global capabilities. Management emphasizes this move as a vote of confidence in the long-term prospects of point-to-point mobility. The acquisition also provides operational synergies in fleet management and supports ongoing EV transition initiatives.
Investment Recommendation and Valuation
- Recommendation: Maintain “Add” rating with a target price of S\$1.70, based on 16x FY26F P/E (0.5 standard deviation above the 5-year average).
- Yield: Attractive 5-6% dividend yields, supported by stable cash flows and solid overseas contributions.
- Re-rating Catalysts: Stronger UK earnings, major contract wins.
- Risks: Integration challenges, margin pressures.
| Key Metrics |
Dec-25F |
Dec-26F |
Dec-27F |
| Net Profit (S\$ m) |
228.0 |
239.1 |
248.4 |
| Core EPS (S\$) |
0.11 |
0.11 |
0.11 |
| Core EPS Growth (%) |
8.32 |
4.85 |
3.91 |
| FD Core P/E (x) |
13.96 |
13.32 |
12.81 |
| Recurring ROE (%) |
8.67 |
8.89 |
9.06 |
| P/BV (x) |
1.20 |
1.17 |
1.15 |
| Dividend Per Share (S\$) |
0.084 |
0.088 |
0.092 |
| Dividend Yield (%) |
5.71 |
5.99 |
6.26 |
Peer Comparison: Regional Public Transport Operators
The sector comparison highlights CDG’s competitive position, attractive dividend yield, and healthy ROE. The following table offers a detailed peer snapshot:
| Company |
Ticker |
Country |
Rec. |
Price (LC) |
Market Cap (US\$ m) |
P/E CY25F |
P/E CY26F |
3yr EPS CAGR (%) |
P/BV CY25F |
ROE CY25F (%) |
EV/EBITDA CY25F |
Div Yield CY25F (%) |
| ComfortDelGro |
CD SP |
Singapore |
Add |
1.47 |
2,480 |
14.0 |
13.3 |
6.7 |
1.20 |
8.5 |
5.2 |
5.7 |
| BTS Group |
BTS TB |
Thailand |
Hold |
3.10 |
1,544 |
na |
na |
na |
0.90 |
-2.1 |
159.3 |
0.0 |
| MTR Corp Ltd |
66 HK |
Hong Kong |
NR |
27.55 |
22,253 |
9.9 |
9.7 |
-7.2 |
0.88 |
9.2 |
10.1 |
4.7 |
| Kelsian Group Ltd |
KLS AU |
Australia |
NR |
3.14 |
559 |
10.3 |
9.3 |
-10.6 |
0.88 |
7.7 |
5.9 |
5.4 |
| Downer EDI Ltd |
DOW AU |
Australia |
NR |
6.17 |
2,657 |
15.5 |
13.2 |
-0.2 |
1.85 |
12.9 |
6.3 |
4.0 |
| Mobico Group PLC |
MCG LN |
UK |
NR |
28.96 |
236 |
3.1 |
3.2 |
na |
na |
37.3 |
4.5 |
0.0 |
| Firstgroup PLC |
FGP LN |
UK |
NR |
184.0 |
1,441 |
8.6 |
10.4 |
-29.5 |
na |
14.9 |
2.9 |
3.6 |
| Nankai Electric Railway |
9044 JP |
Japan |
NR |
2,238 |
1,727 |
11.3 |
11.0 |
-36.8 |
0.77 |
7.4 |
9.9 |
1.9 |
| Seibu Holdings Inc |
9024 JP |
Japan |
NR |
3,444 |
7,084 |
3.8 |
21.4 |
-37.4 |
1.50 |
18.1 |
8.1 |
1.3 |
| Central Japan Railway |
9022 JP |
Japan |
NR |
3,097 |
21,704 |
6.6 |
6.8 |
1.5 |
0.62 |
9.6 |
7.1 |
1.0 |
| Keisei Electric Railway |
9009 JP |
Japan |
NR |
1,576 |
5,705 |
11.0 |
13.7 |
-8.7 |
1.43 |
11.6 |
16.0 |
1.2 |
| Tobu Railway |
9001 JP |
Japan |
NR |
2,662 |
3,607 |
10.5 |
11.3 |
-2.0 |
0.90 |
8.4 |
10.1 |
2.2 |
ComfortDelGro’s Detailed Financial Performance and Key Ratios
CDG’s financials highlight consistent growth, sound profitability, and robust cash flow, underpinning its investment appeal.
| Metric |
Dec-24A |
Dec-25F |
Dec-26F |
Dec-27F |
| Total Net Revenues (S\$ m) |
4,477 |
5,136 |
5,288 |
5,422 |
| Operating EBITDA (S\$ m) |
691 |
758 |
770 |
780 |
| Operating EBITDA Margin (%) |
15.4 |
14.8 |
14.6 |
14.4 |
| Net Profit (S\$ m) |
211 |
228 |
239 |
248 |
| Revenue Growth (%) |
15.4 |
14.7 |
3.0 |
2.5 |
| Net Dividend Payout Ratio (%) |
74.9 |
72.3 |
77.5 |
78.1 |
| BVPS (S\$) |
1.20 |
1.23 |
1.25 |
1.28 |
Ownership and Shareholder Structure
- Major Shareholders: Silchester International Investors (8.0%), Columbia Threadneedle Investments (5.0%), Vanguard Group (2.8%)
- Free Float: 97.9% of shares outstanding
Conclusion: A Strategic Leap Forward for ComfortDelGro
ComfortDelGro’s acquisition of CityCab marks a pivotal step in its growth journey, reinforcing its leadership in Singapore’s point-to-point mobility sector. With a robust financial profile, attractive yield, and strategic international expansion opportunities, CDG is well positioned for continued earnings growth and value creation. Investors are advised to monitor execution risks, but the fundamentals remain sound for long-term holders.
