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ALP STOCK INVESTMENT CLUB
(24 October 2015)
ComfortDelGro Corporation Limited (C52.SI)
Close price: S$3.09
12-M Target price: S$3.30
1.) Sector: Transportation
2.) Core business structure: ComfortDelGro Corp Ltd is an investment holding company that operates as a passenger land transportation company. It has eight major operating divisions. There are Bus, Bus station, Rail, Taxi, Automotive engineering services, Inspection and testing services, Car rental and leasing and Driving Centre.
3.) Segment that generates the highest revenue: Bus contributes the highest revenue, 50.7% of the group total revenue. While Taxi contributes 31.7% of the group total revenue.
*Bus: Income is generated through bus fare collections, contracted revenue for operation of scheduled services, provision of coach rental services and ancillary advertisement income.
4.) Countries that the business operates: Mainly in Singapore. United Kingdom, Ireland, Australia, Chine, Vietnam and Malaysia.
5.) Challenges: As of recently, rival public transportation companies such as UBER and GRABTAXI has caught attention of the government, CEOs and directors. Veteran companies such as ComfortDelGro, saw a huge threat to its rivals as the massive public has opted for the services of rival companies, which are cost effective and efficient in service. Furthermore, taxi drivers have also opted to work under the wing of rival companies due to cheaper rental rates.
6.) Strengths: Despite certain challenges, ComfortDelGro Corp Ltd still stands strong due to a diversified operations portfolio. Currently, this transport services veteran offers more than 10 transport related services including maintenance work and engineering. The company’s operation also secures a vast area of countries from all over the world.
7.) Significant events: As of February 11, 2015, the company operated a fleet of approximately 46,300 buses, taxis, and rental vehicles in Singapore, the United Kingdom, Ireland, Australia, China, Vietnam, and Malaysia.
8.) GTI Ranking: 35
10.) Recommendation: For investors looking towards the long-term, C52.SI is a stock to buy and hold. The company’s profit has been growing steadily during the past 5 years. Given the crash of Dow Jones and the STI mid-year, the company’s profit still grows unaffected. For traders looking for short-term profits over a few different trades, this might just be the stock simply because it as and will continue to be in its trading range. Look to BUY the bottom when heavy selling establishes itself and SHORTat the top when heavy buying establishes itself, both with distinct volume.
Compiled by: Haikal & Daniel
DISCLAMER:Readers should not rely solely on information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.
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