Period / short volume / volumed traded / short percentage / net loss

20250811 - 20250815 32351700 71151500 45.47%  -0.02

20250818 - 20250822 53841600 101347700 53.13%  -0.07

The earnings profile of ComfortDelGro (CDG) has undergone a gradual but significant change. What was once primarily a local transport operator, the group now generates more than half its revenue from overseas operations instead.

 

For 1HFY2025 ended June 30, CDG&rsquo s revenue rose by 14.4% y-o-y to $2.42 billion. About 54.3% of this comprised overseas contributions of $1.32 billion, versus CDG&rsquo s Singapore revenue of $1.11 billion. The growth in overseas revenue is attributed mainly to the acquisition of the UK&rsquo s Addison Lee in 4Q2024 and the Metroline Manchester contracts, also in the UK, which commenced in 1Q2025.

 

In 1HFY2025, CDG&rsquo s earnings increased by 11.2% y-o-y to $106 million. The group proposed a one-tier dividend of 3.91 cents per share, representing a payout ratio of 80%, and an improvement from 3.52 cents paid in the same period last year.

 

At its briefing on Aug 13, Cheng Siak Kian, managing director and group CEO of CDG, said he is &ldquo pleased&rdquo with its &ldquo good progress&rdquo in terms of its strategy and execution. &ldquo We have stated, quite publicly, that we want to continue to strengthen our core businesses, which is in transport.&rdquo

 

CDG has a few business segments: public transport taxi and private hire other private transport, which includes private buses, non-emergency patient transport, corporate vehicle leasing and CMAC inspection and testing services and other segments which includes CDG&rsquo s driving centres, bus stations, insurance, media, logistics, electric vehicle (EV) charging and corporate overheads.

 

CDG&rsquo s public transport, taxi and private hire, and other private transport businesses are the largest contributors to the group&rsquo s revenue in the 1HFY2025 at $1.57 billion, $519.7 million and $214.5 million, respectively.

 

No overseas targets, but Singapore market &lsquo quite limited&rsquo

In a way, CDG&rsquo s overseas moves were driven by the domestic market&rsquo s growth limitations. Chairman Mark Greaves stressed that the group wasn&rsquo t trying to shrink its Singapore revenue as it is also looking for growth on its home turf &ldquo as much as possible&rdquo .

 

On overseas biddings, Greaves notes that CDG enjoys a &ldquo significant&rdquo success rate given that it only bids for certain contracts where it feels it has a &ldquo pretty good chance of actually being awarded this contract at a decent margin.&rdquo

 

On Singapore&rsquo s fleet, which has decreased in 1HFY2025, Chris White, CDG&rsquo s head of group investor relations, acknowledged that it is a &ldquo very competitive market out there.&rdquo However, it has introduced some new initiatives and hopes that things can stabilise.

 

The group is also looking at using its international network to grow its global business-to-business (B2B) premium services. For instance, CDG&rsquo s users in Singapore would be able to book premium services via its network in London, Australia, or even to China and vice versa.

 

On autonomous vehicles (AVs), Cheng says CDG will operate shuttles before taxis first. It will also have to work with the Singapore government before bringing in a fleet of AVs.

 

Analysts remain upbeat expect stronger 2H

Even though CDG&rsquo s 1HFY2025 net profit stood at 45% of the Bloomberg consensus&rsquo estimates, analysts are considering the group&rsquo s results as within expectations, as they expect CDG&rsquo s net profit in the second half to be higher for various reasons.

 

Maybank&rsquo s Eric Ong has maintained his &ldquo buy&rdquo call and target price of $1.70 as he believes the current 2HFY2025 will see further margin improvement in CDG&rsquo s London public bus contract renewals. Ong also foresees other private transport revenues in the UK and Europe to increase with CMAC securing a &ldquo major exclusive contract&rdquo with UK online package holiday specialist, On The Beach, over the summer travel season.

 

CGS International&rsquo s Jacquelyn Yow has also kept her &ldquo add&rdquo call and unchanged target price of $1.70, given CDG&rsquo s &ldquo decent&rdquo yield of 5%, &ldquo solid&rdquo UK contributions and global tender opportunities, including the Copenhagen Metro and Australia&rsquo s Sydney Metro West.

 

Like Ong, Yow expects CDG&rsquo s 2HFY2025 net profit to increase, especially due to higher seasonal traffic in the 3QFY2025.

 

PhillipCapital&rsquo s Paul Chew also expects to see a stronger set of 2HFY2025 earnings due to a seasonally stronger performance from CMAC and the continued repricing of London bus routes. Yet, Chew has lowered his call to &ldquo accumulate&rdquo from &ldquo buy&rdquo due to CDG&rsquo s recent share price performance. His target price of $1.68 remains unchanged.

 

While CDG&rsquo s 1HFY2025 revenue stood within Chew&rsquo s expectations, the group&rsquo s net profit fell short due to the amortisation of acquisition intangibles. Revenue and patmi stood at 46% and 40% of Chew&rsquo s FY2025 forecast.

 

Taking into account non-cash amortisation expense and higher interest expense, Chew has lowered his FY2025 earnings forecast by 7% to $231 million.

 

In FY2026, Chew believes CDG&rsquo s earnings will be supported by contributions from recent contract wins, namely the Manchester bus and Stockholm rail contracts.