Sep[5] - ComfortDelgro (Buy on dip)

COUNTER: ComfortDelgro Corporation Limited

OVERVIEW:
The counter is the world's second largest listed land transport companies with total flee size of over 46650 buses, taxis and rental vehicles. Business segments include bus, taxi, rail, car rental and leasing, automotive servicing, driving centers. Operation exists in 7 countries: SG, Aus, China, UK, Ireland, Vietnam and Malaysia.

HIGHLIGHTS:
[1] Its latest results saw 1H2016 registered 1% and 5% growth in revenue and net profit year on year. Earning contribution is well diversified across few countries:

[2] The counter is in net cash position of $323m. Total debt/equity is as low as ~15%.

INVESTMENT THEMES:
[1] Current valuation looks attractive:
Earning per share (1H2016) - 0.073 || Dividend (2016) - 0.0925 || Dividend growth > 8% pa

[2] Under new bus operating regime, LTA will own all operating assets from SBS (75% own by the counter) and SMRT. Instead of paying a lump sum, LTA pays leasing charge to operators up based on bus packages contract ranging from 2 to 10 years. Over the entire contracts, SBS will be paid $5.3b. This could translate to progressive improvement on balance sheets of the counter.

[3] Ridership on North East Line and Downtown Line (DTL) is picking up. 3rd section of DTL is target for completion on 2017.

[4] Shall SMRT to be privatized, the counter will be the sole representative from public transport sector in local exchange. It might draw further attention due to its defensive business nature.

PRICE TREND:
The counter showed its resilience throughout various market panicking moment (devaluation RMB, rate hike worries, BREXIT) over past 1 year. Strong support ~ 2.64. Recent market turbulence provided hunting period to it again.

*** Note: Same counter has been mentioned in May[8] 2016 ***