Finally ComfortDelgro released its Q3 result. Lets take a look at it.
Group 3rd quarter revenue drops 2.4% yoy, and its total operating costs drop 0.9% only. 3rd quarter net profit drops 11.1% yoy. Seems quite bad huh? But when I look closer into the result, 3rd quarter profit attributed to shareholders only drop 8.2%, and 9 months profit attributed to shareholders only drop 1.6%! If you include other income from the comprehensive income statement, 9 months profit attributed to shareholders increased from 231.7 millions to 239.9 millions!
This result is actually much better than my estimation. I expected that the profit from taxi segment will drop 10% yoy, and other segment's profit might be hard to cover it. Which will result a high PE. However, I don't really understand that why the management still spent 116.6 millions on purchases of vehicles, premises and equipment! Are they still buying more taxi? The report didn't explain this point. If the management can give a better estimation about the demand of their taxi rental, and sell away those extra one, the company can get back the cash and decrease future depreciation cost.
Recently the company invested in a taxi company in Perth, Australia, but that company only owns 100+ taxi.. So I guess that investment won't generate any significant profit for the company.
To be honest, I think the current share price already reflected the bad performance of the taxi segment, however I guess there are many investors still not aware that ComfortDelgro is not about taxi only. I expect that the share price should drop again in short term, as the result looks bad on the first look, and I guess many people will throw their holdings away. I am thinking to increase my holdings if the price drops below 1.8 or even 1.6!
Thanks for reading.
Cheers.
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