ComfortDelgro – Phillip

Ridership update

Bus ridership for June grew 4.8% y-y, YTD:2.4%

Rail ridership continues to grow strongly in June, 9.8% y-y

Purchase of Swan taxis Limited for A$38.8m (S$46.8m)

Downgrade to Hold with a fair value estimate of S$1.73(unchanged)

2Q10 Results preview

We are forecasting revenue for 2Q10 to come in S$800.5m, operating profit of S$72.5m and net profit of S$46.4m. Operating expenses will likely remain high this year with the higher oil price and labour costs. CDG will be releasing their 2Q10 results on 13.08.10 after the market closes.

Both bus and rail ridership grew for the first 6 months

Bus ridership continues to grow modestly 4.8% y-y in June and 2.4% y-y for the first half of 2010. However we are likely to see some erosion of bus ridership from the opening of circle line which opened in July. We are forecasting bus ridership to grow 1% for the whole year to 838 million trips from 830 million trips. Rail ridership continues to impress in June growing 9.8% y-y, bringing year to date growth to 12.8%. Public transport are seeing better growth numbers this year mainly due to the sky high prices of COEs and increased connectivity of public transport.

Purchase of Swan taxis Limited for A$38.8m (S$46.8m)

Swan Taxis Limited, the largest provider of taxi services in the Perth metropolitan market with 1,667 taxis (91% market share). Based on the FY09 results, revenue was A$13.3m and profit before tax of A$4.6m which is about 0.5% of CDG’s total revenue (FY09). The purchase will strengthen its presence in Australia but contribution to its top and bottomline will be marginal.

Valuation and Recommendation

Since our Buy recommendation on 4th June 2010 (S$1.41), CDG has rose 12.1% to S$1.58. Based on our stock selection system, we are downgrading our buy recommendation to Hold and maintaining our fair value estimate of S$1.73. We believe that the UK’s taxi segment, which serves the corporate segment will likely pick up this year as most of the British banks are starting to turn profitable.

ComfortDelgro – Phillip

Ridership update

Bus ridership for June grew 4.8% y-y, YTD:2.4%

Rail ridership continues to grow strongly in June, 9.8% y-y

Purchase of Swan taxis Limited for A$38.8m (S$46.8m)

Downgrade to Hold with a fair value estimate of S$1.73(unchanged)

2Q10 Results preview

We are forecasting revenue for 2Q10 to come in S$800.5m, operating profit of S$72.5m and net profit of S$46.4m. Operating expenses will likely remain high this year with the higher oil price and labour costs. CDG will be releasing their 2Q10 results on 13.08.10 after the market closes.

Both bus and rail ridership grew for the first 6 months

Bus ridership continues to grow modestly 4.8% y-y in June and 2.4% y-y for the first half of 2010. However we are likely to see some erosion of bus ridership from the opening of circle line which opened in July. We are forecasting bus ridership to grow 1% for the whole year to 838 million trips from 830 million trips. Rail ridership continues to impress in June growing 9.8% y-y, bringing year to date growth to 12.8%. Public transport are seeing better growth numbers this year mainly due to the sky high prices of COEs and increased connectivity of public transport.

Purchase of Swan taxis Limited for A$38.8m (S$46.8m)

Swan Taxis Limited, the largest provider of taxi services in the Perth metropolitan market with 1,667 taxis (91% market share). Based on the FY09 results, revenue was A$13.3m and profit before tax of A$4.6m which is about 0.5% of CDG’s total revenue (FY09). The purchase will strengthen its presence in Australia but contribution to its top and bottomline will be marginal.

Valuation and Recommendation

Since our Buy recommendation on 4th June 2010 (S$1.41), CDG has rose 12.1% to S$1.58. Based on our stock selection system, we are downgrading our buy recommendation to Hold and maintaining our fair value estimate of S$1.73. We believe that the UK’s taxi segment, which serves the corporate segment will likely pick up this year as most of the British banks are starting to turn profitable.

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