The outlook is stable. We see the rental car population growth moderating, and believe an equilibrium between taxi population and rental cars population being reached soon. Narrowing of the DTL losses and contribution from the Seletar bus package will contribute positively in 2018.
Maintain BUY; lower target price of $2.50 (previously $2.63)
We have re-modelled our assumptions, as we move into FY18. Our new target price gives an implied FY18e forward P/E multiple of 17.4 times. The 5.2% dividend yield is sustainable and attractive.
Management shared some insights to some of the ongoing issues.
Strategy for Singapore Taxi business segment
Strategic alliance with Uber
Transition to the New Rail Financing Framework (NRFF)
Turnaround for DTL expected in 2019
Capital management on M&A activity