The Positives
The Negatives
Outlook
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.
Key Takeaways
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
Richard covers the Transport Sector and Industrial REITs. He graduated with a Master of Science in Applied Finance from the Singapore Management University. He holds the CFTe and FRM certifications and is a CFA charterholder.
He was ranked #2 Top Stock Picker (Asia) for Real Estate Investment Trusts in the 2018 Thomson Reuters Analyst Awards, and ranked #2 Top Stock Picker (Singapore) for Resources & Infrastructure in the 2016 Thomson Reuters Analyst Awards.