1Q22 Results in Line, Retain Buy With Unchanged Target Price

• ComfortDelGro (SGX:C52)’s 1Q22 headline PATMI of S$76.7m (+30.4% y-o-y) was boosted by a one-off exceptional gain of S$37.2m on disposal of its Alperton property in London. Excluding non-recurring items and government relief, we deem core operating profit of S$64.6m (+25.7% y-o-y) - or ~23%/22% of MIBG/consensus full year estimates to be broadly within expectation.

No Change to Our Below-consensus Core EPS

• ComfortDelGro's 1Q22 revenue rose 3.9% y-o-y to S$895.9m with overseas contributing 43.2% of the top line, down a tad from 45.6% last year. By segment, public transportation services accounted for 79.5% of the topline in 1Q22.
• While rail ridership (~65-70% of pre-COVID level) and other commercial services turnover should continue to improve, we are also mindful of the cost pressures especially with higher electricity bills (+40% y-o-y). Hence, we are keeping our below-street forecasts after having previously factored in a tighter EBIT margin assumption.

Taxi Should See Q-o-q Growth With Improving Mobility

• Taxi revenue came in at S$106.3m (+3.3% q-o-q, -11.2% y-o-y) given a smaller fleet size compared to last year, continued rental discounts and one-off fuel rebates (S$0.8m) given to drivers in Singapore.
• In China, rental waivers were also granted due to the COVID-19 lockdowns, while the UK saw lower revenues after the divestment of the London taxi business in Jun 2021.
• On a positive note, anecdotal evidence suggests that higher fares have not dampened commuters’ demand for P2P trips as Singapore dropped most of its pandemic-era curbs and reopened its economy.

Introduces 4% Commission for Ride Hailing Services

• As fuel prices remain elevated, ComfortDelGro is extending its 15% taxi fare (vs 20% for Grab/Gojek) for all bookings via its mobile app wef 1 May. We think this will help to attract more private hire drivers over to its platform, boosting the market share for its taxi business.

Source: Maybank Research - 15 May 2022