ComfortDelGro Corp Ltd

Income Statement Balance Sheet ... We consider qualitative ... Transport | REITs (Industrial) REITs (Commercial, Retail, Healthcare) | Property Techni...

0 downloads 319 Views 430KB Size
ComfortDelGro Corp Ltd Full year in line and steady 15 February 2016

SINGAPORE | TRANSPORT SERVICES | RESULTS    

FY15 revenue of S$4.11bn in line with consensus expectations of S$4.20bn. FY15 PATMI of S$301.9mn in line with consensus expectations of S$304.1mn. Final dividend of 5.0 cents declared (vs. FY14: 4.5 cents). Total (interim + final) dividend of 9.00 cents and 64.1% payout (FY14: 8.25 cents, 62.2% payout).

Accumulate (Upgraded) SGD 2.79 SGD 0.102 SGD 3.21 18.7%

CLOSING PRICE FORECAST DIV TARGET PRICE TOTAL RETURN COMPANY DATA

Results at a glance

(SGD mn)

FY15

FY14 y-y (%) Comments

O/S SHA RES (M N) :

Bus Bus Station

2,119 29.0

2,055 29.1

M A RKET CA P (USD mn / SGD mn) :

3.1 (0.3)

Increa s e i n Si nga pore, offs et by wea ker AUD Lower pa s s enger vol umes due to competition from expa ndi ng ra i l network (Gua ngzhou) Ra i l 213.4 196.8 8.4 Hi gher ri ders hi p a nd hi gher a vera ge fa re Ta xi 1,327 1,284 3.4 Hi gher SG, Chi na from fa voura bl e RMB, offs et by wea ker AUD Automotive Engi neeri ng Servi ces 238.5 302.7 (21.2) Lower di es el s el l i ng pri ces to taxi hi rers Ins pection & Tes ting Servi ces 107.5 109.1 (1.5) Lower vol ume a t SETSCO Ca r Rental & Lea s i ng 38.3 35.9 6.7 La rger fl eet of vehi cl es Dri vi ng Centre 38.9 39.3 (1.0) Hi gher enrol ment i n SG; l ower revenue from Chi na Revenue 4,112 4,051 1.5 Actual revenue increase of S$83.2mn was partially eroded by negative foreign currency effect of S$23.0mn, stemming from weaker AUD EBITDA 840.0 795.8 5.6 EBIT 450.7 442.1 1.9 45.6% from overs ea s bus i nes s es PATMI 301.9 283.5 6.5 Crossed the S$300mn-mark for the first time Source: Compa ny, Phi l l i p Securi ties Res ea rch (Si nga pore)

Analyst Briefing Key Takeaways  Bus: Ongoing negotiations with Regulator, expect a smooth transition to the Government Contracting Model (GCM). The transition is still on track for September 2016. Ongoing negations are centred on contract pricing and treatment of non-BSEP (Bus Service Enhancement Programme) buses. Singapore bus revenue is expected to be lower in FY16, due to the 1.9% fare reduction from 27 December 2015.  Taxi: No material impact felt from third-party apps. The Singapore taxi business remains healthy, generating higher rental income from replacement taxis (Hyundai Sonata fleet gradually being replaced by Hyundai i40). Fleet size has been maintained at 16,800 taxis, and un-hired rate for the year was 0.8% (about 100 taxis). The un-hired taxis allows a float of spare replacements, when other taxis are sent for servicing.  Rail: Downtown Line (DTL) expected to breakeven only after the full line is opened. Rail business made a full year profit of S$3.2mn, dragged down by a loss of S$2.2mn in 4Q15. This loss in 4Q15 was mainly due to start-up costs associated with Downtown Line Stage 2 (DTL2). Management does not expect the combined Downtown Line Stage 1 (DTL1) and DTL2 operations to breakeven by the end of 2016, and this is consistent with their expectations when CD had participated in the bid to operate the line. This is due to the progressive nature of the opening up of the rail line. Downtown Line Stage 3 (DTL3), which is tentatively scheduled to be opened around June 2017 will incur start-up costs in 2016.

2,151 4297 / 6001

52 - WK HI/LO (SGD) :

3.27 / 2.56

3M A verage Daily T/O (mn) :

4.77

MAJOR SHAREHOLDERS (%) CA P ITA L GROUP COM P A NIES INC

6.0%

B LA CKROCK

6.0%

PRICE PERFORMANCE (%) 1M T H 3 M T H

1Y R

COM P A NY

(4.5)

(9.4)

(3.7)

STI RETURN

(5.5)

(13.7)

(23.1)

PRICE VS. STI 3.50

3.00

2.50

2.00

Feb-15

May-15

Aug-15

Nov-15

CD SP EQUITY

Feb-16

FSSTI Index

So urce: B lo o mberg, P SR

KEY FINANCIALS Y / E D ec

F Y 14

F Y 15 F Y 16 e F Y 17e

Revenue (SGD mn)

4,051

4,112

4,190

NP A T, adj (SGD mn)

284

302

341

371

EP S, adj. (Cents)

13.3

14.1

15.9

17.3

P /E, adj. (x) B VP S (Cents) P /B (x)

4,276

20.0

20.7

17.6

16.2

132.7

140.1

149.1

158.4

2.0

2.1

1.9

1.8

DP S (Cents)

8.25

9.00

10.15

11.05

Div. Yield (%)

3.1

3.1

3.6

4.0

So urce: Co mpany Data, P SR est.

VALUATION METHOD

Investment Actions We upgrade to "accumulate" rating with higher target price of S$3.21 (previous S$3.08). The target price represents an implied 20.2x FY16e forward P/E multiple.

Page | 1 | PHILLIP SECURITIES RESEARCH (SINGAPORE) MCI (P) 118/10/2015 Ref. No.: SG2016_0037

DCF (WA CC: 7.5%; Terminal g: 1.0%)

Richard Leow, CFTe, FRM

(+65 6212 1848)

[email protected]

COMFORTDELGRO CORP LTD RESULTS

Historical relative valuation Re-rated upwards on announcement of GCM We see a re-rating of the stock, after the GCM was announced on 21 May 2014. The rerating was due to the positive structural change in which the license to operate bus services in Singapore will be awarded. We are seeing an average 21.1x P/E multiple and 8.2x EV/EBITDA multiple for CD since that announcement. The current multiples are close to -1 standard deviation from the respective averages, indicating relative historical undervaluation now.

Historical P/E multiple 26x P/E multiple

22x

Average

Historical EV/EBITDA multiple 10x EV/EBITDA multiple

+/- 1 SD

Source: Bloomberg

Average

+/- 1 SD

Source: Bloomberg 8x

18x 6x 14x

10x 2011

2012

2013

2014

Page | 2 | PHILLIP SECURITIES RESEARCH (SINGAPORE)

2015

2016

4x 2011

2012

2013

2014

2015

2016

COMFORTDELGRO CORP LTD RESULTS

Financials Income Statement Y/E Dec, SGD mn

FY13

Revenue EBITDA Depreci a ti on & Amorti s a ti on EBIT Net Fi na nce (Expens e)/Inc Other i tems As s oci a tes & JVs Excepti ona l i tems Profit Before Tax Ta xa ti on Profit After Tax - Non-control l i ng i nteres t Net Income, reported Net Income, adj.

FY14

FY15

FY16e FY17e

3,748 4,051 4,112 4,190 4,276 764 796 840 862 879 337 354 389 353 312 426 442 451 508 567 (16) (10) (3) (4) 9 4 4 5 6 8 414 436 452 511 584 (87) (92) (88) (100) (114) 327 344 364 411 470 64 61 62 70 99 263 284 302 341 371 263 284 302 341 371

Per share data (Cents)

Y/E Dec

FY13

EPS, reported EPS, a dj. DPS BVPS

12.43 12.43 7.00 131.5

FY14 13.29 13.29 8.25 132.7

FY15 14.07 14.01 9.00 140.1

FY16e FY17e 15.86 15.86 10.15 149.1

17.27 17.27 11.05 158.4

Balance Sheet Y/E Dec, SGD mn

FY13

FY14

ASSETS PPE Inta ngi bl es Recei va bl es As s oci a tes & JVs Inves tments Others Total non-current assets Inventori es Accounts Recei va bl es Prepa yments Inves tments Ca s h Others Total current assets Total Assets

FY15 FY16e FY17e

2,777 687 302 6 64 8 3,845 71 111 192 5 831 30 1,240 5,085

2,895 686 307 8 74 22 3,991 72 117 197 826 27 1,239 5,231

2,909 673 268 10 52 25 3,937 75 139 277 788 1 1,280 5,216

2,370 672 268 13 52 25 3,399 74 137 274 1,254 1 1,740 5,139

2,347 670 268 16 52 25 3,378 76 140 280 1,484 1 1,980 5,358

LIABILITIES Short term l oa ns Accounts Pa ya bl es Others Total current liabilities Long term l oa ns Others Total non-current liabilities Total Liabilities

218 665 179 1,063 590 638 1,228 2,290

243 837 178 1,258 494 640 1,134 2,392

126 833 177 1,137 432 635 1,067 2,204

26 824 166 1,016 282 635 917 1,933

26 841 167 1,034 282 635 917 1,951

EQUITY Non-control l i ng i nteres t Shareholder Equity

640 2,155

649 2,190

678 2,335

713 2,493

760 2,647

Y/E Dec

FY13

FY14

FY15 FY16e FY17e

P/E (X), a dj. P/B (X) EV/EBITDA (X), a dj. Di vi dend Yi el d (%) Growth & Margins (%) Growth Revenue EBITDA EBIT Net Income, a dj. Margins EBITDA ma rgi n EBIT ma rgi n Net Profi t Ma rgi n Key Ratios ROE (%) ROA (%)

15.9 1.5 5.5 3.6%

20.0 2.0 7.0 3.1%

20.7 2.1 7.1 3.1%

5.7% 3.9% 3.4% 5.7%

8.1% 4.2% 3.7% 7.7%

1.5% 1.9% 2.1% 5.6% 2.6% 2.0% 1.9% 12.8% 11.5% 6.5% 12.9% 8.9%

Cash Flow

Y/E Dec, SGD mn

FY13

CFO PBT Adjus tments WC cha nges Ca s h genera ted from ops Others Cashflow from ops CFI CAPEX, net Di vd from a s s oci a tes & JVs Others Cashflow from investments CFF Sha re i s s ua nce, net Loa ns , net of repa yments Di vi dends Others Cashflow from financing Net change in cash Effects of excha nge ra tes CCE, end Source: Compa ny Da ta , PSR es t.

FY14

FY15

FY16e FY17e

414 356 6 776 (78) 698

436 262 24 722 (83) 639

452 253 (23) 682 (82) 600

511 351 (4) 858 (100) 758

584 295 7 887 (113) 774

(415) 2 (119) (532)

(471) 3 (16) (485)

(388) 3 13 (372)

190 4 10 203

(285) 5 16 (264)

35 120 (166) (27) (38) 128 8 831

23 (62) (198) 74 (163) (8) 3 826

18 (190) (250) (214) (228) (269) 117 (16) (10) (269) (495) (279) (41) 466 230 3 788 1,254 1,484

Valuation Ratios

Net Debt or (Net Ca s h) Net Gea ri ng (X)

16.2 1.8 5.5 4.0%

20.4% 19.6% 20.4% 20.6% 20.6% 11.4% 10.9% 11.0% 12.1% 13.3% 8.7% 8.5% 8.8% 9.8% 11.0% 12.6% 13.1% 13.3% 14.1% 14.4% 5.3% 5.5% 5.8% 6.6% 7.1% (23)

(89)

(229)

(945) (1,175)

Net Cash Net Cash Net Cash Net Cash Net Cash

*Forward multiples & yields based on current market price; historical multiples & yields based on historical market price.

Page | 3 | PHILLIP SECURITIES RESEARCH (SINGAPORE)

17.6 1.9 5.9 3.6%

COMFORTDELGRO CORP LTD RESULTS

Ratings History 3.50

Market Price Target Price

3.00

2.50 2.00

Source: Bl oomberg, PSR

1.50

Sep-16

Jun-16

Mar-16

Dec-15

Sep-15

Jun-15

Mar-15

Dec-14

Sep-14

Jun-14

Mar-14

Dec-13

Sep-13

1 2 3 4 5 PSR Rating System Total Returns Recommendation Rating > +20% Buy 1 +5% to +20% Accumul a te 2 -5% to +5% Neutra l 3 -5% to -20% Reduce 4 < -20% Sel l 5 Remarks We do not ba s e our recommenda tions entirel y on the a bove qua ntitative return ba nds . We cons i der qua l i tative fa ctors l i ke (but not l i mi ted to) a s tock's ri s k rewa rd profi l e, ma rket s entiment, recent ra te of s ha re pri ce a ppreci a tion, pres ence or a bs ence of s tock pri ce ca tal ys ts , a nd s pecul a tive undertones s urroundi ng the s tock, before ma ki ng our fi na l recommenda tion

Page | 4 | PHILLIP SECURITIES RESEARCH (SINGAPORE)

COMFORTDELGRO CORP LTD RESULTS

Management Chan Wai Chee (CEO, Research - Special Opportunities) - [email protected]

Jacky Lee Chee Waiy (Head, Research) [email protected]

Research Operations Officer Mohamed Ghazali - [email protected]

Consumer | Healthcare Soh Lin Sin - [email protected]

Infrastructure | REITs (Hospitality) Peter Ng - [email protected]

Macro Pei Sai Teng - [email protected]

Transport | REITs (Industrial) Richard Leow, CFTe, FRM [email protected]

REITs (Commercial, Retail, Healthcare) | Property Dehong Tan - [email protected]

Technical Analysis Jeremy Ng - [email protected]

Banking and Finance Jeremy Teong - [email protected]

US Ho Kang Wei - [email protected] Contact Information (Regional Member Companies) MALAYSIA Phillip Capital Management Sdn Bhd B-3-6 Block B Level 3 Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur Tel +603 2162 8841 Fax +603 2166 5099 Website: www.poems.com.my

HONG KONG Phillip Securities (HK) Ltd 11/F United Centre 95 Queensway Hong Kong Tel +852 2277 6600 Fax +852 2868 5307 Websites: www.phillip.com.hk

JAPAN Phillip Securities Japan, Ltd. 4-2 Nihonbashi Kabuto-cho Chuo-ku, Tokyo 103-0026 Tel +81-3 3666 2101 Fax +81-3 3666 6090 Website: www.phillip.co.jp

INDONESIA PT Phillip Securities Indonesia ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A Jakarta 10220 – Indonesia Tel +62-21 5790 0800 Fax +62-21 5790 0809 Website: www.phillip.co.id

CHINA Phillip Financial Advisory (Shanghai) Co Ltd No 550 Yan An East Road, Ocean Tower Unit 2318, Postal code 200001 Tel +86-21 5169 9200 Fax +86-21 6351 2940 Website: www.phillip.com.cn

THAILAND Phillip Securities (Thailand) Public Co. Ltd 15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak, Bangkok 10500 Thailand Tel +66-2 6351700 / 22680999 Fax +66-2 22680921 Website www.phillip.co.th

FRANCE King & Shaxson Capital Limited 3rd Floor, 35 Rue de la Bienfaisance 75008 Paris France Tel +33-1 45633100 Fax +33-1 45636017 Website: www.kingandshaxson.com

UNITED KINGDOM King & Shaxson Capital Limited 6th Floor, Candlewick House, 120 Cannon Street, London, EC4N 6AS Tel +44-20 7426 5950 Fax +44-20 7626 1757 Website: www.kingandshaxson.com

UNITED STATES Phillip Futures Inc 141 W Jackson Blvd Ste 3050 The Chicago Board of Trade Building Chicago, IL 60604 USA Tel +1-312 356 9000 Fax +1-312 356 9005 Website: www.phillipusa.com

AUSTRALIA Phillip Capital Limited Level 12, 15 William Street, Melbourne, Victoria 3000, Australia Tel +61-03 9629 8288 Fax +61-03 9629 8882 Website: www.phillipcapital.com.au

SRI LANKA Asha Phillip Securities Limited 2nd Floor, Lakshmans Building, No. 321, Galle Road, Colombo 03, Sri Lanka Tel: (94) 11 2429 100 Fax: (94) 11 2429 199 Website: www.ashaphillip.net

TURKEY PhillipCapital Menkul Degerler Dr. Cemil Bengü Cad. Hak Is Merkezi No. 2 Kat. 6A Caglayan 34403 Istanbul, Turkey Tel: 0212 296 84 84 Fax: 0212 233 69 29 Website: www.phillipcapital.com.tr

DUBAI Phillip Futures DMCC Member of the Dubai Gold and Commodities Exchange (DGCX) Unit No 601, Plot No 58, White Crown Bldg, Sheikh Zayed Road, P.O.Box 212291 Dubai-UAE Tel: +971-4-3325052 / Fax: + 971-4-3328895

SINGAPORE Phillip Securities Pte Ltd Raffles City Tower 250, North Bridge Road #06-00 Singapore 179101 Tel +65 6533 6001 Fax +65 6535 6631 Website: www.poems.com.sg

INDIA PhillipCapital (India) Private Limited No.1, 18th Floor, Urmi Estate 95, Ganpatrao Kadam Marg Lower Parel West, Mumbai 400-013 Maharashtra, India Tel: +91-22-2300 2999 / Fax: +91-22-2300 2969 Website: www.phillipcapital.in CAMBODIA Phillip Bank Plc Ground Floor of B-Office Centre,#61-64, Norodom Blvd Corner Street 306,Sangkat Boeung Keng Kang 1, Khan Chamkamorn, Phnom Penh, Cambodia Tel: 855 (0) 7796 6151/855 (0) 1620 0769 Website: www.phillipbank.com.kh

Page | 5 | PHILLIP SECURITIES RESEARCH (SINGAPORE)

COMFORTDELGRO CORP LTD RESULTS

Important Information This report is prepared and/or distributed by Phillip Securities Research Pte Ltd ("Phillip Securities Research"), which is a holder of a financial adviser’s licence under the Financial Advisers Act, Chapter 110 in Singapore. By receiving or reading this report, you agree to be bound by the terms and limitations set out below. Any failure to comply with these terms and limitations may constitute a violation of law. This report has been provided to you for personal use only and shall not be reproduced, distributed or published by you in whole or in part, for any purpose. If you have received this report by mistake, please delete or destroy it, and notify the sender immediately. The information and any analysis, forecasts, projections, expectations and opinions (collectively, the “Research”) contained in this report has been obtained from public sources which Phillip Securities Research believes to be reliable. However, Phillip Securities Research does not make any representation or warranty, express or implied that such information or Research is accurate, complete or appropriate or should be relied upon as such. Any such information or Research contained in this report is subject to change, and Phillip Securities Research shall not have any responsibility to maintain or update the information or Research made available or to supply any corrections, updates or releases in connection therewith. Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this report are as of the date indicated and are subject to change at any time without prior notice. Past performance of any product referred to in this report is not indicative of future results. This report does not constitute, and should not be used as a substitute for, tax, legal or investment advice. This report should not be relied upon exclusively or as authoritative, without further being subject to the recipient’s own independent verification and exercise of judgment. The fact that this report has been made available constitutes neither a recommendation to enter into a particular transaction, nor a representation that any product described in this report is suitable or appropriate for the recipient. Recipients should be aware that many of the products, which may be described in this report involve significant risks and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made, unless all such risks are understood and an independent determination has been made that such transactions would be appropriate. Any discussion of the risks contained herein with respect to any product should not be considered to be a disclosure of all risks or a complete discussion of such risks. Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of any product. Any decision to purchase any product mentioned in this report should take into account existing public information, including any registered prospectus in respect of such product. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may provide an array of financial services to a large number of corporations in Singapore and worldwide, including but not limited to commercial / investment banking activities (including sponsorship, financial advisory or underwriting activities), brokerage or securities trading activities. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may have participated in or invested in transactions with the issuer(s) of the securities mentioned in this report, and may have performed services for or solicited business from such issuers. Additionally, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may have provided advice or investment services to such companies and investments or related investments, as may be mentioned in this report. Phillip Securities Research or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report may, from time to time maintain a long or short position in securities referred to herein, or in related futures or options, purchase or sell, make a market in, or engage in any other transaction involving such securities, and earn brokerage or other compensation in respect of the foregoing. Investments will be denominated in various currencies including US dollars and Euro and thus will be subject to any fluctuation in exchange rates between US dollars and Euro or foreign currencies and the currency of your own jurisdiction. Such fluctuations may have an adverse effect on the value, price or income return of the investment. To the extent permitted by law, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may at any time engage in any of the above activities as set out above or otherwise hold an interest, whether material or not, in respect of companies and investments or related investments, which may be mentioned in this report. Accordingly, information may be available to Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, which is not reflected in this report, and Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may, to the extent permitted by law, have acted upon or used the information prior to or immediately following its publication. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited its officers, directors, employees or persons involved in the issuance of this report, may have issued other material that is inconsistent with, or reach different conclusions from, the contents of this report. The information, tools and material presented herein are not directed, intended for distribution to or use by, any person or entity in any jurisdiction or country where such distribution, publication, availability or use would be contrary to the applicable law or regulation or which would subject Phillip Securities Research to any registration or licensing or other requirement, or penalty for contravention of such requirements within such jurisdiction. This report is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The products mentioned in this report may not be suitable for all investors and a person receiving or reading this report should seek advice from a professional and financial adviser regarding the legal, business, financial, tax and other aspects including the suitability of such products, taking into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to invest in any of such products. This report is not intended for distribution, publication to or use by any person in any jurisdiction outside of Singapore or any other jurisdiction as Phillip Securities Research may determine in its absolute discretion. IMPORTANT DISCLOSURES FOR INCLUDED RESEARCH ANALYSES OR REPORTS OF FOREIGN RESEARCH HOUSES Where the report contains research analyses or reports from a foreign research house, please note: (i) recipients of the analyses or reports are to contact Phillip Securities Research (and not the relevant foreign research house) in Singapore at 250 North Bridge Road, #06-00 Raffles City Tower, Singapore 179101, telephone number +65 6533 6001, in respect of any matters arising from, or in connection with, the analyses or reports; and (ii) to the extent that the analyses or reports are delivered to and intended to be received by any person in Singapore who is not an accredited investor, expert investor or institutional investor, Phillip Securities Research accepts legal responsibility for the contents of the analyses or reports.

Page | 6 | PHILLIP SECURITIES RESEARCH (SINGAPORE)