ComfortDelGro (CDG): DTL phase 2 to open ahead of schedule in Dec-15. This is certainly a positive development for CDG as the management has guided for breakeven on DTL between opening of DTL phase 2 and DTL phase 3.
Being the largest taxi operator in SG, CDG had been subject to LTA’s Taxi Availability standards (TA) since 2013, which are meeting stipulated percentage of taxis: 1) on the roads during peak hours, and 2) minimum daily mileage of 250km. Previously, the TA were computed based on registered fleet, but now the new TA computation will be based on the company’s hired-out fleet, which more accurately measures availability. While CDG has been the only 1 to consistently meet the criteria since the inception of TA standards, we think this change is still positive as it provides greater flexibility for CDG to manage its fleet of taxis.
CDG’s recently announced intention to seek opportunities in London’s rail business is encouraging, seeing that management is taking actions in expanding CDG’s overseas businesses. These recent developments are positive but not unexpected, OCBC maintains its HOLD rating with TP: $3.07.
On the other hand, MayBank KE maintains its SELL rating with TP: $2.70.
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