215 views

Taxi segment to drive ComfortDelGro’s 2022 profit higher: analyst

UOB Kay Hian expects CD’s taxi business to post a 149% YoY increase in operating profit.

With taxi ridership seeing growing demand amidst eased restrictions, UOB Kay Hian said ComfortDelGro’s (CD) transport business will likely drive the company’s full-year profit higher in 2022.

In a report, the analyst said it expects CD’s taxi segment to post a 149% YoY increase in operating profit to S$46m, assuming that the average utilised fleet for the year is at 8,300 and the daily rental rate is at $90.

Given the expected huge increase in CD’s transport segment and the expansion of its bus services in Australia, UOB Kay Hian increased its 2022-24 profit after taxation and minority interests (PATMI) by 2% to 3%.

“For every 100 increase/drop in utilised taxis from 8,300, it would increase/decrease our 2022 PATMI forecast and target price by 0.8% and S$0.01 respectively,” the analyst said. 

To assure improvement of its taxi business, UOB kay Hian said CD should increase and extend incentives for their tax drivers.

READ MORE: ComfortDelGro Taxi introduces temporary one-cent fare hike

The analyst said CD has been “largely unsuccessful in attracting new drivers or getting taxi drivers to return as many drivers have exited the industry completely.”

UOB Kay Hian added that most taxi drivers also jumped to CD’s ride-hailing competitors like Grab and Go-Jek due to their lower daily rental rates and greater incentives.

“Grab’s and Go-Jek’s cheaper daily rental rates make it easier and quicker for drivers to break even, a vital factor most drivers consider,” the analyst said.

Follow the link for more news on

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!