This would be offset in part by a +5.3% uplift in automotive engineering earnings, resulting in an overall 5.1% dilution to CDG’s 2018 earnings.
SINGAPORE (Nov 28): UOB Kay Hian is maintaining its “buy” call on ComfortDelGro (CDG) with a target price of $2.25, which is based on a long-term average P/E of 16.6 times, pending more details on the land transport operator’s upcoming alliance with Uber.
In a report last Friday, lead analyst Thai Wei Ying highlights the possibility of the collaboration impacting CDG’s FY18 earnings in a base-case scenario where there would be a -3.4% earnings downside to a potential joint venture (JV) formation with Uber, as well as rental pressure to cause -7% downside as taxi rental converges towards that of private hire cars, in the case where both companies develop a shared platform.
