ComfortDelGro set on shielding its Singapore market share against foreign peers

Despite being confident in its operating efficiency.

According to CIMB, during the NDR that the firm hosted for ComfortDelGro (CDG) in Kuala Lumpur last week, management provided an update on the group’s recent developments and shared their view of the sector’s outlook. 

Here's more from CIMB:

The key takeaways from the NDR: 1) CDG views the bidding outcome of the first bus package positively, as the winning bid implies a reasonable margin which would set a reference point for future bus packages.

Being a seasoned player in the more competitive overseas markets (UK, Australia), CDG is confident in its operating efficiency and hence, protecting its Singapore market share against foreign players. 2) The development of the DTL stage II and stage III is on track.

Stage II is slated to commence operations in 1Q16 and Stage III in 1Q17. The DTL is expected to achieve breakeven sometime between Stage II and Stage III, given the larger network effect and its coverage of developed areas. 3) CDG would continue pursuing growth in overseas markets through M&As, aiming to increase overseas profit contribution from currently below 50% to above 60%.

Management said that Australia would have the most potential for M&As once it is open to private sector investment, as 80-90% of the buses there are operated by the state.