Angewandte

$ComfortDelGro(C52)

It is very disturbing to hear people talking about how uber/grab are killing taxi. What people don't understand is that no doubt there are impact but do people really know what is the impact?

Touch your heart, how often do you really take taxi in the past and how often do you take uber/grab now? I bet some people here don't even take taxi for the past 10 years but is currently using uber/grab due to "promo code". So technically did taxi lose customer ?? I also dare say that many passenger are taking uber/grab due to the promo code and cheaper fare (uberpool and grabshare).

The key problem that hit the taxi industry hard now is the amount of taxi driver jumping over to uber/grab. This result in empty taxi sitting there doing nothing. Taxi driver are also not given much incentive unlike uber. I once spoke to an uber driver and he told me that there were certain incentives from uber. The more attractive one were cheaper rent and incentive for driving on the road with app turn on (even w/o passenger).

The promocode are to effective in luring customer but how long can this last? No doubt grabshare or uberpool are cheaper in fare but they are meant for people who are not rushing for time. I believed once uber/grab promocode craze are over. The taxi business would be back and most likely with new look. Maybe new scheme for taxi driver?

Thus over the long run i believed CDG would climb up to where it used to be. We also have to remember in mind that taxi are not their only business.

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32 people like this.
Sporeshare :

Mkt is flooded with too many taxi.Is it a GD sign?

Sporeshare :

Reply to @div1g4in : I think may not be that Gd at this moment . The other operator is trying to let go ..

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Sporeshare :

Looks like a correction may take place ..last Fri price closed lower then previous doji candlestick.

Sporeshare :

I think even without promo code,Uber and grab pool sharing is so much cheaper .Even the standard car also costs cheaper ..many taxi could be left idling .Rev likely to go lower .

Sporeshare :

Reply to @theSage : Oic.Is a good way of transportation.Taxi is still quite fairly reasonable price

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layers :

one thing i see is taxi drivers have resistance to change. or CDG management not doing a gd job? some drivers I talk to have no idea how to implement flat fare if there is more than 1 drop off location.

one driver, I told him, need to add himself. he dun believe as he said there is no way to add into the bill/receipt. he only.know how tonadd in erp charges.

my friend took a cab and there is no erp charges. think uncle dunno need to add. can see on the ground, alot of drivers are confused.

GrandpaLemon :

Technology disruption is everywhere and this does not apply jus to CDG. Innovation creates a new market and eventually disrupts an existing and displacing established market leading firms. When i attended DBS session, Ah neh openly declare that we are a technology company and embracing fintech as the way forward. Only visionary leaders who have foresight can have the extra 1% edge over others. Rest will become Kodak. my 2c

Angewandte :

Reply to @financialfreedom : CDG also got a part in sbs :D
but investing is SBS is fine too haha

Noctis :

comfortdelgro need to innovate something smart

Angewandte :

Reply to @Noctis : totally agree. maybe hire some msian or tiong to be full timer driver.

rubberducky :

take more taxis everyone, hah

NOMONEY :

@yjlim.excellent.time to buy blue chips,i think noble will drop more

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ThumbTackInvestor
Expiry:
Target Price
$2.05
(+3.54%)
NOW:

$ComfortDelGro(C52.SI)

I've been doing DD on Comfort since it was in the $2.4+ range, but held back.
Today, I've finally initiated a position: 10,000 shares at $1.98

I'm expecting a rebound in the near term, and would still be cautious over the mid to long term.
The time to enter in a BIG way is when all the ppl who have been caught holding at much higher levels, as well as those who have caught the falling knives, stop saying they'll "average down".
That's when I know the market participants have stopped hoping.
In the meantime, the current rapid fall means that the fundamentals are too juicy for me to ignore.
Historical PE range of Comfort is within 14 - 25 in the last 5 years.
But IMO, it's too dangerous to take that at face value. Simply because the business dynamics have certainly changed in the past 5 years.
So we have to reconsider the fundamentals of the whole industry.
I've incorporated in my valuation, a 10% drop in EPS for FY17 (at half year mark it's a 3% gain from y-o-y, but in mrq, it's a slight drop, so a 10% margin is certainly conservative enough)

At my entry price of $1.98, that gives me a PE of 15, taking into account a 10% drop.
dividend yield of just over 5%
More importantly, CDG has 1 thing going for it that's under estimated: the business generates a ton of FCF consistently.
In the past 5 years, only 1 year has negative FCF.

I'll be happy with a respectable gain in the short term. Longer term wise, I'd only increase the position size if the prices drop a lot more, my initial entry price leaves a lot of room and ammunition for adding.

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Salvatore

With my divestment of $ComfortDelGro(C52) I have bought into $AEM(AWX) at a price of $2.75. :) Here is my brief coverage of this company.

I previously held this counter and released all I had at a price of $2.65. After a barrage of good news, I decided to enter the foray once again.

Throughout this entire coverage, I am assuming a profit margin of only 9%, which is a tad lower than their Q12017 profit margin of about 9.8%. Therefore, all my calculations here will be UNDERSTATED if they were to improve their profit margins, which has been the case over the last few years.

What I am also assuming is that there are no further sales order received from customers, which is almost zero probability.

Ready to read on? LETS GO!

"The Company is pleased to announce that it has received as at 31 May 2017, sales orders worth S$182 million for delivery in FY2017. This represents an increase of S$30 million in sales orders received over the previous sales order received announcement made on 18 April 2017."

With a profit margin of 9%, $182m of revenue equates to $16.38m of profit, which averages out to $5.46m per quarter. Adding q1 earnings, total year earnings will be 20.5 million, which equates to an EPS of $0.32.

With such an EPS, the share price of $2.72 represents a PE ratio of ONLY 8.6x. Everyone knows that this is an INSANELY low PE ratio, and that the market has not fully priced in the growth that is to come.

Even if it goes to an undemanding PE ratio of 12x, the price would have already grown to $3.8. I personally do not think that the management would allow the stock to escalate to that price, and they would issue bonus shares to improve the liquidity of the shares.

To give a comparison, $Micro-Mechanics(5DD) is trading at a PE ratio of 13x and $UMS(558) is trading at 17x (Info extracted from Stockfacts, correct me if I am wrong.)

What else do we want? It does not stop here! The company states - "Thirdly, with clear visibility of growth into the next few years, we intend to adopt a dividend policy to pay annual dividends, including interim dividends, of not less than 25% of profit after tax excluding non-recurring, one-off and exceptional items."

With a minimal profit estimation of AT LEAST $20million, 25% profit means $5m paid out, which equates to a dividend of at least 2.8% for an insane growth company.

To top it all of, institutional investors are buying in to AEM as well. "is pleased to announce that several long-only institutional funds have bought AEM shares and have become new shareholders. The institutional funds took up 2,737,800 shares at $2.70 a share from Orion Phoenix on 5 June 2017."

With this massive inflow of funds, I believe that AEM will attract many more institutional investors. I do not see Orion Phoenix reducing the percentage of their shares any further. With Institutional Investors buying at a price of $2.70, there is a major support there and I only see the price going up.

This is only the beginning of AEM!

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JSKM

$ComfortDelGro(C52.SI)
Edited : 2.68 incoming

PREVIOUSLY
RIP big seller , 1.68 incoming

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