What is the news?
How do we view this?
We maintain Overweight on the Land Transport sector, on the positive industry restructuring and regulatory action coming into effect which levels the playing field. We maintain our Accumulate rating on ComfortDelGro, with higher target price of $2.69 (previously $2.48).
Monthly Rental car population YoY growth had peaked at high-70% in 4Q 2016 and has since been tapering down. Rental car population had accordingly started to stagnate in 2H 2017. YoY growth for Rental car population in April 2018 has further moderated downward to +14.6%. Meanwhile, Taxi population contracted -19.0% YoY and -7.4% for 4M-YTD.
Figure 2: Monthly Taxi and Rental cars population, as at April 2018
Source: Bloomberg, LTA, PSR