ComfortDelGro’s (CDG) 3Q14 results were largely in-line with our expectations. PATMI grew 5.3% YoY to S$80.8m on the back of a 6.0% increase in revenue to S$1,037.3m. Top line growth was mainly driven by Bus (+4.9%), Rail (+21.4%) and Taxi (+7.9%) segments. For 9M14, CDG’s revenue and PATMI rose 9.0% and 8.1% YoY to S$3,004.4m and S$219.8m, forming 75.9% and 78.2% of our FY14 projections, respectively. Outlook remains relatively stable with Singapore and UK Bus segment as well as Singapore Taxi segment expected to drive revenue growth. While we think CDG’s 3Q14 results are largely in-line with expectations, we adjust our FY14 PATMI forecast upwards by 2.2% to factor in the outlook guidance from management. Consequently, our DDM-derived fair value estimate increases from S$2.92 to S$3.03, maintain BUY.
9M14 PATMI formed 78% of our FY14 projections
ComfortDelGro’s (CDG) 3Q14 results were largely in-line with our expectations. PATMI grew 5.3% YoY to S$80.8m on the back of a 6.0% increase in revenue to S$1,037.3m. Top line growth was mainly driven by the Bus (+4.9%), Rail (+21.4%) and Taxi (+7.9%) segments. However, Bus revenue growth in UK (+12.4%) and Singapore (+11.5%) were offset by a decline from Australia (-17.3%) due to loss of Regions 1 and 3 operations. The Rail segment saw increase in average daily ridership from both North-East Line (NEL) and Downtown Line (DTL), further boosted by higher average fares. For 9M14, CDG’s revenue and PATMI rose 9.0% and 8.1% YoY to S$3,004.4m and S$219.8m, forming 75.9% and 78.2% of our FY14 projections, respectively. For the past four fiscal years, 4Q had traditionally been the weaker quarter and hence, we view 9M14 PATMI meeting 78.2% of our FY14 projections to be largely in-line.
Bus, Rail and Taxi segments likely to remain as revenue drivers
For the larger contributors, CDG’s management guided for revenue from Singapore’s bus, rail and taxi segment as well as the UK’s bus segment to increase. Singapore’s bus segment is likely to see increasing ridership and average fares but also higher staff salaries while contribution from Metroline West in the UK is the key driver for UK bus revenue growth. On the other hand, Automotive Engineering Services (AES) and Australia’s bus segment are likely to see decreases. Australia’s decline is mainly due to the loss of regions 1 and 3 and the slightly lower margin seen in region 4 while the drop in AES segment will largely be due to lower diesel sales. While Taxi revenue in Singapore is expected to increase due to fleet renewal commanding higher rental income, taxi revenues from other countries are expected to be maintained.
Increase FV; maintain BUY
While we think CDG’s 3Q14 results are largely in-line with expectations, we adjust our FY14 and FY15 PATMI forecasts upwards by 2.2% and 4.0% respectively to factor in the outlook guidance from management. Consequently, our DDM-derived fair value estimate increases from S$2.92 to S$3.03, maintain BUY.
ComfortDelGro’s (CDG) 3Q14 results were largely in-line with our expectations. PATMI grew 5.3% YoY to S$80.8m on the back of a 6.0% increase in revenue to S$1,037.3m. Top line growth was mainly driven by the Bus (+4.9%), Rail (+21.4%) and Taxi (+7.9%) segments. However, Bus revenue growth in UK (+12.4%) and Singapore (+11.5%) were offset by a decline from Australia (-17.3%) due to loss of Regions 1 and 3 operations. The Rail segment saw increase in average daily ridership from both North-East Line (NEL) and Downtown Line (DTL), further boosted by higher average fares. For 9M14, CDG’s revenue and PATMI rose 9.0% and 8.1% YoY to S$3,004.4m and S$219.8m, forming 75.9% and 78.2% of our FY14 projections, respectively. For the past four fiscal years, 4Q had traditionally been the weaker quarter and hence, we view 9M14 PATMI meeting 78.2% of our FY14 projections to be largely in-line.
Bus, Rail and Taxi segments likely to remain as revenue drivers
For the larger contributors, CDG’s management guided for revenue from Singapore’s bus, rail and taxi segment as well as the UK’s bus segment to increase. Singapore’s bus segment is likely to see increasing ridership and average fares but also higher staff salaries while contribution from Metroline West in the UK is the key driver for UK bus revenue growth. On the other hand, Automotive Engineering Services (AES) and Australia’s bus segment are likely to see decreases. Australia’s decline is mainly due to the loss of regions 1 and 3 and the slightly lower margin seen in region 4 while the drop in AES segment will largely be due to lower diesel sales. While Taxi revenue in Singapore is expected to increase due to fleet renewal commanding higher rental income, taxi revenues from other countries are expected to be maintained.
Increase FV; maintain BUY
While we think CDG’s 3Q14 results are largely in-line with expectations, we adjust our FY14 and FY15 PATMI forecasts upwards by 2.2% and 4.0% respectively to factor in the outlook guidance from management. Consequently, our DDM-derived fair value estimate increases from S$2.92 to S$3.03, maintain BUY.
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