+ Heathy cash flows. 3Q20 net cash from operations, excluding grants, was S$167mn (3Q19: S$162mn) and S$383mn for 9M20 (9M19: S$407mn). This returned the company to net cash of S$115.5mn from S$115.3mn net debt in 3Q19.
– Public transport softer than expected. Revenue improved 12% QoQ to S$640.8mn. Rail ridership was only 55% of pre-Covid levels in January. Another drag was lower bus-service fees from fuel indexation as fuel prices remained depressed.
We are expecting further improvements in the coming quarters. Considerably larger group gatherings or events in Singapore will only be allowed in 4Q20. Phase 3 should further accelerate ridership in taxis and trains as more religious, social and work activities resume. An area of weakness will be U.K.’s second lockdown curtailing taxi and coach ridership.
Upgrade to BUY with higher TP of S$1.83, from S$1.65
We lower FY20e PATMI by 50% but raise FY21e forecast by 16%. Comfort has large market shares in rail, taxi and bus services in Singapore. It is our preferred transport proxy as the lockdown eases in Singapore.