ComfortDelGro has acquired the remaining stake in CityCab, reinforcing its strategic emphasis on Singapore’s point-to-point (P2P) mobility sector. Despite the modest immediate impact on earnings, the acquisition is expected to strengthen ComfortDelGro’s market position. The company maintains a “buy” recommendation with a target price of SGD1.75, reflecting an 18% potential upside.
The acquisition is part of ComfortDelGro’s broader strategy to enhance its presence in the P2P mobility market, which includes taxis and private hire services. The company is also focusing on improving public transport margins in the UK and exploring further contract wins and mergers and acquisitions. These efforts are anticipated to drive mid-teens earnings growth and ensure resilient cash flows.
ComfortDelGro’s financial outlook remains robust, with a forecasted yield of 6.3% for 2026, which is above the market average. The company’s target price incorporates a 6% premium for environmental, social, and governance (ESG) factors, highlighting its commitment to sustainable practices.
Analyst Shekhar Jaiswal from RHB Research notes that the acquisition aligns with ComfortDelGro’s strategic goals and supports its growth trajectory. The company’s focus on stable revenue streams and potential for further expansion positions it well for future success.
In summary, ComfortDelGro’s acquisition of CityCab is a strategic move to bolster its P2P mobility offerings in Singapore, with positive implications for its long-term growth and financial performance.
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