comfortdelgro corporation ltd – latent potential with...

ComfortDelGro Corporation Ltd – Latent potential with overseas venture

Phillip Securities Research Pte Ltd

24 March 2011 Market Singapore Stock Exchange Sector Transport-Services Reuters CMDG.SI Bloomberg CD SP POEMS CFD.SG

Buy (Maintained) Closing Price

S$1.51 Target Price

S$2.01 (+33.4%)

Last Price 1.51

52w k High (1/10/2011) 1.64

52w k Low (5/25/2010) 1.38

Shares Outstanding (mil) 2089.636

Market Cap (S$ mil) 3155.35

Avg. Daily Turnover (mil) 5.33

Free f loat (%) 87.66

PE (X) 13.79

PB (X) 1.75

1M 3M 6M

Absolute -1.3% -1.9% -1.3%

Relative -2.0% 1.7% 0.7%

Price performance %

Price

1.30

1.40

1.50

1.60

1.70

1.80

1.90

2.00

23-M ar-10 23-Jul-10 23-Nov-10 23-M ar-11

CD SP STI (rebased)

Major Shareholders % 1 Singapore Labour

Foundation 12.1%

2 Silchester Intl Investors 9.0% 3 Capital Research Global

Investors 6.5%

Source: Bloomberg

Analyst Derrick Heng � 65 6531 1221 FAX 65 6536 4435 � [email protected] Web: www.poems.com.sg MICA (P) 004/01/2011 Ref No: SG2011_0108

• Strong potential with CDG’s venture overseas • Limited exposure to energy price increase • NEL should continue to perform well; stronger than expected overseas performance is

the wild card • We revised our PATMI estimates upwards for FY11E by 5.6% and introduce FY12/13E

estimates • Maintain Buy following a change of analyst with revised target price of S$2.01 INVESTMENT MERITS: Global diversification. We believe that CDG’s efforts to grow its businesses beyond Singapore could lead to significant earnings growth in the future. It also reduces their dependency on the Singapore market, which has a limited scope for land transport growth. NEL likely to do well. CDG’s rail system serves the populous areas in the North-East of Singapore. We expect continued population growth to increase ridership for their rail business. Limited exposure to energy price increase. Exposure to energy cost is a typical concern of investing into transportation businesses. However, we believe that CDG is less exposed to potential energy price increase than its peers due to their diversified businesses and varied business models. Licenses & Operating rights protect competitive position. We observed sustainable profitability at some of CDG’s overseas subsidiaries, which we believe could be attributable to a protected competitive position. KEY CHALLENGES: Singapore Bus. We expect CDG’s bus business to be affected by the growth of rail network in Singapore. Plans to extend Singapore’s rail network to 270km by 2020 is likely to result in significant cannibalization of ridership from bus operations. With a 75% market share, we foresee long term challenges for CDG’s public bus operations in Singapore. CCL’s full opening at the end of 2011 will be the near term headwind for the company. M & A. CDG aims to derive 70% of its revenue from overseas in the long run. While we are supportive of its venture overseas, we believe that there are inherent challenges and risks in growing their businesses overseas. Key Risks. Regulatory; Forex; M & A. Valuation. The current market price values the stock at 14X T12M EPS, which is at the lower end of the stock’s historical trading range. Due to our expectations of robust growth in the near future, we opine that the stock deserves an above average valuation. We used a blended valuation model of DCF (COE: 8.2%, terminal g: 1%) and P/E (17X FY11e PATMI) to arrive at our target price of S$2.01. With an upside of 33.4% to the last trading price, we maintain our Buy call on CDG with a revised target price.

Profits EPS DPS BV ROE P/E Yield P/BV

SGD(mill) SGD ¢ SGD ¢ SGD ¢ (%) (X) (%) (X)

12/09A 219.5 10.5 5.03 81.0 13.5% 15.6 3.1% 2.0

12/10A 228.5 11.0 5.37 86.2 13.1% 14.2 3.5% 1.8

12/11E 236.7 11.3 6.20 91.3 12.8% 13.3 4.1% 1.7

12/12E 241.6 11.6 6.30 96.6 12.3% 13.1 4.2% 1.6

12/13E 250.8 12.0 6.49 102.1 12.1% 12.6 4.3% 1.5

Conso'

Ending

ComfortDelGro Corporation Ltd 24 March 2011

2

MINIMAL IMPACT FROM ENERGY COST HIKE A typical concern of investing into transportation businesses lies with the potential impact of unexpected energy price hikes. We believe that the impact of energy price increase has minimal impact on ComfortDelGro (CDG). Electricity and fuel expenses comprise of only c.8.3% of total group operating expenses. Due to the varied business models employed, we believe that energy price increase would only have a significant impact on CDG’s bus operations in China & Singapore. Singapore’s bus & rail business accounts for c.57% of the Group energy expenses. The growth in rail ridership more than offsets the negative impact of electricity cost increases. As shown in the figure below, rising crude oil prices from FY04-FY08 contributed to the erosion of profit margins of SBS Transit’s (SBST) bus operations, reaching a low of 1.5% in 2008 when crude oil prices spiked to a record high. While CDG advised that they had hedged 20% of their FY11 fuel requirements at an attractive rate, we believe that the bus business in Singapore could slip into losses if crude oil prices sustains at above US$125/bbl as we expect average fares to be c.8% lower than in 2008. Fig 1. Energy cost impact on profitability

Source: Company, PSR

0

20

40

60

80

100

120

140

160

180

200

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%SBST energy exp. (S$'mn)Crude Oil, WTI (S$/bbl)SBST Bus EBIT margin (%)SBST Rail EBIT margin (%)

GLOBAL DIVERSIFICATION WILL BEAR FRUITS IN THE FUTURE The company recognized the physical limitations of Singapore’s land transport sector and had been growing its business overseas since merger. Currently, Singapore accounts for 57% of the Group’s revenue as compared to 70% when CDG was first formed in 2003. This trend of global diversification will continue as CDG aims to derive 70% of their revenue from overseas in the long term. On average, CDG spends c.S$60mn annually on investing into various subsidiaries and associates. Due to the stable nature of their business, CDG is able to generate sufficient cashflows to fund these acquisitions without stressing its balance sheet. Furthermore, this expansion is achieved while maintaining high dividend payout to shareholders of c.50-85%. Fig 2. Good interest coverage despite continuous acquisition

Source: PSR(200)

(180)

(160)

(140)

(120)

(100)

(80)

(60)

(40)

(20)

0


8

10

12

14

16

18

20

22

24Investments into sub &associatesInterest cover (X)

LICENCES & OPERATING RIGHTS PROTECTS BUSINESS POSITION We believe that the licences for the rights to operate protect the business position of CDG’s businesses. These rights and licences create high barriers of entry and in the case of Singapore’s rail operations, CDG enjoy a monopoly status in its area of operations (CDG is licensed to operate the North East Line (NEL), Sengkang Light Rail Transit (SLRT) & Punggol Light Rail Transit (PLRT) lines till 2033). While rail business currently contributes less than 7% of the Group’s EBIT, we believe it is one of the most protected businesses with excellent growth prospects due to our expectations of ridership growth along the rail line.


3

The business model used by some of CDG’s bus and taxi operations overseas also enable them to sustain very healthy profit margins. For example, the “cost-plus” business model for Australia and UK’s bus operations allow them to enjoy sustainable profit margins with little exposure to energy price variations. We also noted that the high EBIT margins for the taxi business in China (c.30% for the past 3 years) could be due to their protected competitive position as well. LIMITED SYNERGIES ACROSS GEOGRAPHY, BUT ADVANTAGE WITH SCALE The various subsidiaries in different countries seem to be stand-alone business units with very little synergies in their operations. However, we acknowledge that there are advantages to operating on a large scale in similar types of business. For example, large scale operations give the company bigger bargaining power with suppliers for fleet replacements, which is a characteristic of the land transport business. While we expect limited synergies for CDG’s units across different geographical locations, we believe that acquiring units at close proximity to their current operations have potential synergies through resource sharing. CAPITAL INTENSIVE BUSINESS While we noted that CDG is able to generate very healthy operating cashflows, the land transport business is inherently very capital intensive. The company spends c.S$500mn annually to replace their taxis and buses with majority of the CAPEX paid in cash and c.10% on hire purchase. The requirement to regularly invest into new vehicles limits the company’s ability to pay out higher amount of dividends to shareholders. Fig 3. Cashflow

Source: PSR(600)

(400)

(200)

0

200

400

600

800


CFO CAPEX FCFF

STRENGTH IN SGD COULD HURT PROFITS ON CONSOLIDATION CDG has exposure to various currencies. As a Group, CDG has the most exposure to CNY, AUD and GBP. Our analysis showed that the decline in GBP over the past 3 years had a significant impact on the business of CDG. If the GBP had maintained its strength at the average exchange rate of 2007, ceteris paribus, sales and EBIT contribution could have been S$306.8mn and S$22.4mn higher in FY10. Fig 4. Revenue by Geography (FY10)


Singapore

57.2%

Australia

11.8%

China

8.6%

UK

22.2%

Vietnam

0.2%Malaysia

0.1%


4

Fig 5. Pro-forma illustration for UK Bus & Taxi contributions

UK Bus & Taxi contributions to CDG (S$) FY08 FY09 FY10

Actual

GBP:SGD 2.61 2.27 2.11

Sales 853.6 749.3 711.5

EBIT 44.7 53.5 52.0

Adjusted

GBP:SGD, 2007 3.01 3.01 3.01

Sales 984.2 993.9 1018.3

EBIT 51.5 71.0 74.4

Variance (S$)

Sales 130.6 244.6 306.8

EBIT 6.8 17.5 22.4

Variance (%) 15.3% 32.6% 43.1%

Source: PSR est. With subsidiaries in China, Australia and UK, CDG would benefit from a strengthening of the respective local currencies against the SGD. Market consensus estimates and forward curves point towards a gradual weakening in AUD against SGD, while the outlook for GBP & CNY remains relatively stable. In our forecasts, we had factored in market consensus estimates for forex movements against SGD (see summary table at end of report).

FINANCIALS

REVENUE FORECASTS (Note: the following section on forecasted fare changes was first published in our Update for SMRT Corporation, dated 3 March 2011) Improved wage rates and rising energy cost should provide room for fare increase. The fares that transport operators are allowed to charge is capped at the formula below:

Max. Fare Adjustment= 0.5*∆CPI + 0.5*∆WI -1.5%

History of Fare change. Transport Fare reviews are typically conducted in July every year. However, due to the opening of Circle Line (CCL) stage 4 & 5, the review for the current year had been pushed back till the end of 2011. We must emphasize that the Max Fare Adjustment formula may not be the actual fare change implemented by the transport operators as it is merely a cap on price increase. Based on data compiled by Mr Looi Teik Soon (Secretary of PTC) using press releases from the PTC, actual fare changes may not reflect values close to the fare cap. For example, as shown in the figure below, despite a 4.8% increase allowed under the fare cap formula in 2009, transport fares were actually reduced by 4.6% to help Singaporeans cope with the economic slowdown. Fare adjustment for 2011. According to the Economic Survey of Singapore published by Ministry of Trade & Industry (MTI), average monthly wages increased by 5.6% and CPI increased by 2.8% for 2010. This works out to an allowable increase of 2.7% based on the formula above. With rising energy cost expected to adversely affect PTOs, we believe that the full 2.7% increase will be actualized in the review at the end of 2011. Furthermore, the lowest 20% income group experienced the least inflationary pressure as a significant proportion of the CPI increase was due to rising energy cost and COE prices that affected the higher income group more than lower income group. Thus, the affordability criteria of our estimated increase in transport cost shouldn’t be an issue. Fare adjustment for 2012. For the next calendar year, inflationary pressure and rising energy cost could result in another round of fare increase. We believe that an assumption of 2.3% growth is reasonable, based on CPI and nominal wage growth of 3.5% and 4.0% respectively. Long run fare increase. In the long run, Singapore aims to grow its real wages by 30% over the next decade. This works out to a CAGR of 2.7% real wage increase every year. By assuming an inflation target of 2.0% on the long run, we estimate that the long term fare growth would be 1.8% for PTOs based on the current formula.


5

Fig 6. Fare adjustments

Source: PTC, PSR est.

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2005

2006

2007

2008

2009

2010

2011E

2012E

2013E

Fare Cap

Actual Adjustment

EXPECT NEL TO DO VERY WELL CDG’s rail system serves the very populous areas in the North-East of Singapore. According to data compiled from the “Census of Population 2010”, the estates of Hougang, Serangoon, Punggol & Sengkang collectively accounts for 15% of Singapore’s resident population. Furthermore, with more HDB residential developments in Punggol & Sengkang, we expect the population in these estates to increase significantly over the next few years. Fig 7. Rail ridership

Source: PSR est.

0

50

100

150

200

250

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11E

FY

12E

FY

13E

Rail ridership ('000)CAGR= c.10.6%

EXPECT UNDERPERFORMANCE FOR SG BUS UPON CCL FULL OPENING While we expect that government effort to promote the use of public transport will benefit public transport operators, we believe that there would be significant cannibalization of bus ridership upon full opening of the CCL at the end of 2011. Fig 8. Bus ridership

Source: PSR est.

650

700

750

800

850

900

950

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11E

FY

12E

FY

13E

Bus ridership ('000)


6

SEGMENTAL FORECASTS Among the various segments, we expect the strongest growth from the Rail & Taxi business. As we had discussed above, the increase in ridership will likely lead to increase in revenue from the rail operations. The Taxi business will likely exhibit strong performance due to full year contributions from newly acquired Swan Taxi from Australia. Furthermore, we expect high hire out rates in Singapore due to strong demand for Taxis from increased visitor arrivals. We also expect the bus segment to exhibit very moderate growth in FY11 as the high energy cost could cap profit contributions. In particular, Singapore’s bus business could suffer from lower advertising revenue and the delay in fare price adjustments by the Public Transport Council. Fig 9. Revenue (LHS) & EBIT (RHS) Forecasts 1

Source: PSR est.

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

FY09 FY10 FY11E FY12E FY13E

0

20

40

60

80

100

120

140

160

180

Bus TaxiAutomotive Engineering Bus EBITTaxi EBIT Automotive Engineering EBIT

Fig 10. Revenue (LHS) & EBIT (RHS) Forecasts 2

Source: PSR est.

0

20

40

60

80

100

120

140

160

180


0

5

10

15

20

25

30

35

BS Rail VITCar rental Driving centre Rail EBITVIT EBIT BS EBIT Car rental EBITDriving centre EBIT

*VIT refers to Vehicle Inspection & Testing EARNINGS FORECASTS Earnings forecasts. Overall, we expect CDG to continue their growth trend over the next 3 years with forecasted earnings growth of 2.1-3.8%.


7

Fig 11. Earning Forecasts

Source: PSR est.

2,800

2,900

3,000

3,100

3,200

3,300

3,400

3,500

3,600


0

100

200

300

400

500

600

700

800

900

Revenue EBITDA EBIT PATMI

RATIO ANALYSIS Defensible Profit margins. As a Group, we expect the profit margins to be maintained over the next three years. The profit contributions from the other segments are likely to offset negative effects due to higher energy costs. Fig 13. Profit margins

Source: PSR est.

5%

10%

15%

20%

25%

FY06 FY07 FY08 FY09 FY10 FY11E FY12E FY13E

EBITDA margin

EBIT margin

Net Profit margin

VALUATION Dividend policy. CDG has a dividend policy of paying out at least 50% of PATMI to shareholders. The ability to pay out higher dividends to shareholders is largely dependent on the company’s cash needs for acquisitions. The Group currently has a strong war chest with S$567mn of cash that could give more leeway for higher dividend payout. Hence, we assumed a payout ratio of 55% in forecasting our dividends. Fig 14. Dividends

Source: Company, PSR est.

0

2

4

6

8

10

12

14

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11E

FY

12E

FY

13E

30%

40%

50%

60%

70%

80%

90%

100%DPS (Scents)

Payout ratio (%)


8

Valuation: DCF + P/E. In valuing the stock of CDG, we used a blended mix of DCF & P/E to arrive at our target price of S$2.01. For the DCF valuation, we used a COE of 8.2% based on a beta of 0.744 and market risk premium of 7.0%. We used an above average P/E multiple of 17X FY11e PATMI as we expect robust earnings growth in the near future. (refer to Annex B for valuation parameters) Fig 15. T12M P/E

Source: Bloomberg, CapitalIQ, PSR est.

6

8

10

12

14

16

18

20

22

24

Mar-0

3

Sep-0

3

Mar-0

4

Sep-0

4

Mar-0

5

Sep-0

5

Mar-0

6

Sep-0

6

Mar-0

7

Sep-0

7

Mar-0

8

Sep-0

8

Mar-0

9

Sep-0

9

Mar-1

0

Sep-1

0

Mar-1

1

Average +1SD

-1SD T12M P/E

Fig 16. Free Cash Flow

Source: Company, PSR est.

0

50

100

150

200

250

300

350

400

450

500

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11E

FY

12E

FY

13E

FY

14E

FY

15E

FCFF

FCFE

*FCFF: Free Cash Flow to Firm; FCFE: Free Cash Flow to Equity


9

COMPANY PROFILE

ComfortDelGro Corporation (CDG) is a land transport conglomerate with businesses across various business segments and geography. The largest profit contributors are from the bus and taxi business segment. CDG was formed following the merger of Comfort Group & DelGro Corporation and was listed within the same year in April 2003. CDG is a component of the STI.

BUSINESS SEGMENTS The two largest business segments of CDG are their bus and taxi businesses. While the businesses are segmented according to their business types, it is important to note that individual business types can operate under very different business models and have varied business exposures. Fig 17. Revenue spread (FY10) Fig 18. EBITDA spread, RHS (FY10)


50.3%

1.0%1.2%2.6%

9.4%

30.6%

4.2% 0.7%

Bus

Bus Station

Rail

Taxi

Auto. Engineering

VIT

Car rental

Driving centre

39.8%

1.8%

38.9%

3.9%

2.5%2.0%4.9%

6.2%

BUS Fig 19. Bus revenue spread (FY10)


SBST

34.0%

China Bus

3.8%

UK bus

34.8%

Australia Bus

23.1%

CDG bus

2.1%

SBST ad. &

rental

2.2%

Key contributors: Singapore, Australia, UK. Singapore bus. Singapore’s bus business comprise mainly of scheduled bus services held through their 75% owned, listed company SBS Transit (SBST). 2% of the revenue is derived from ComfortDelGro bus, which is a private bus chartering service. We believe that the scheduled bus service business, held through SBST, could be facing challenges in the long run as we expect cannibalization of bus ridership from the expanding rail network in Singapore. However, being a key mode of public transportation in Singapore, the bus business is likely to observe ridership growth in the near term. Australia bus operations in New South Wales (NSW) & Victoria. According to the NSW government, population is expected to grow by 2mn to over 9mn residents by 2036. With more than 70% of journeys in Sydney made by private vehicles, there is plenty of room for the government to develop the public transport sector to cater to its growing population. CDG had grown significantly through acquisitions in Australia’s bus business over the years. With further fleet expansions, management also guided that they expect higher revenue from this segment in the coming year.


10

UK business had been doing well. CDG’s wholly owned subsidiary Metroline has a market share of 13% in London’s scheduled bus operations. The contributions from the UK business had declined in the past few years due to a weakening GBP, despite continued growth in local currency terms. Bus Station. CDG operates a very profitable bus station in China, known as TianHe Bus Station that is located in Guangzhou. The station enjoyed significant growth in traffic over the past few years. It currently handles c.700k trips/annum, as compared to c.528mn in 2004. We believe that there is still room for growth for the operations, as we estimate that the station is currently operating at c.75% capacity. Fig 20. Bus Station financial performance

Source: PSR est.

0

20

40

60

80

100

120

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

35%

40%

45%

50%

55%Revenue (CNY)

EBIT (CNY)

EBIT margin (%)

RAIL Fig 21. Rail financial performance

Source: SBST, PSR

(150)

(120)

(90)

(60)

(30)

0

30

60

90

120

150


-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

RevenueEBITEBIT margin (%)

ComfortDelGro operates the North-East line (NEL), Sengkang Light Rail Transit (SLRT) & Punggol Light Rail Transit (PLRT) in Singapore through SBST. The rail operations exhibited very strong growth in sales and ridership due to population growth in the North Eastern corridor of Singapore. We expect the rail business to continue to do well as they service key residential areas with high population growth.


11

TAXI Fig 22. Taxi revenue spread (FY10)


Singapore

70.9%

UK

15.2%

China

12.7%

Australia

0.5%

Vietnam

0.8%

Key contributors: Singapore, China, UK. Singapore Taxi. ComfortDelGro is the largest taxi operator in Singapore China Taxi. CDG operates more than 10,000 taxis in various parts of China. We expect revenue to continue growing due to the company’s acquisition of new licenses and fleet expansion. However, profitability could decline slightly due to the increase in mandatory social security contributions. UK Taxi. CDG’s UK Taxi operations are mainly in London. As their clientele is mainly corporate customers, this business segment is highly sensitive to business cycles. Their business is currently recovering from a decline in corporate bookings during the economic downturn and had achieved two consecutive quarters of growth. OTHERS Automotive & Engineering Services mainly Singapore & China. This business segment services the company’s taxi fleet and private cars. Vehicle Inspection & Testing mainly through VICOM. CDG’s other listed subsidiary, VICOM, derive >60% of its sales from non-vehicle Testing & Inspection services of materials for various industries. It has a very strong vehicle inspection business in Singapore with a 70% market share. The vehicle inspection business has very sustainable profit margins due to their competitive position. While vehicle population in Singapore is unlikely to grow significantly in the future, we expect higher COE cost to lead to higher average vehicle age, thus leading to more inspection cycles. Fig 23. VICOM revenue spread (FY10)

Source: VICOM, PSR

Inspection

30.4%

Rental

2.1%Others

4.2%

Test &

Inspection

61.1%

Assessment

2.2%


12

Fig 24. Vehicle Inspection & Testing (S$ ‘mn)

Source: PSR est.

0

10

20

30

40

50

60

70

80

90

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

20%

25%

30%

35%Revenue

EBIT

EBIT margin (%)

Others. CDG also conducts driving lessons for learner drivers in Singapore & China. Car rental in Singapore, China & Malaysia. RISKS

Regulatory. CDG operates in a highly regulated business in Singapore and its profitability is dependant on changes in the regulatory environment. Firstly, the public transport fares are tightly controlled by PTC and the forecasted fare changes in our analysis may not be realized. Secondly, changes to the method of charging transport fares could affect public transport fares. For example, the implementation of distance based fare pricing in July 2010 changed the revenue collection profile of the company. Lastly, with central transport planning by the LTA, CDG has very little autonomy over how the transport routes can be planned. Foreign currency. The trade off associated with growing their business overseas is that CDG could face lower contributions upon consolidation, due to unfavourable exchange rates. For example, despite a 6% growth in profits from the UK bus business in FY10, their profit contributions in SGD actually declined by 1.5% due to unfavourable exchange rate movements. M & A execution risks. CDG indicated that they intend to continue growing their businesses overseas, aiming to achieve 70% of their revenue from overseas in the long term. Hence, there are associated risk due to mergers & acquisitions (M & A) by CDG.


13

ANNEX A- BUSINESS BY KEY SEGMENTS Fig A1. Bus Sales Spread by Geography (FY10) Fig A2. SBST, including ad. & rental (SGD ‘mn)


SBST

34.0%

China Bus

3.8%

UK bus

34.8%

Australia Bus

23.1%

CDG bus

2.1%

SBST ad. &

rental

2.2%

Source: PSR est.

0

20

40

60

80

100

120

140

160

180

200

1Q

FY

08

2Q

FY

08

3Q

FY

08

4Q

FY

08

1Q

FY

09

2Q

FY

09

3Q

FY

09

4Q

FY

09

1Q

FY

10

2Q

FY

10

3Q

FY

10

4Q

FY

10

0%

2%

4%

6%

8%

10%

12%Revenue (SGD)

EBIT (SGD)

EBIT margin (%)

Fig A3. Australia Bus (AUD ‘mn) Fig A4. UK Bus (GBP ‘mn)

Source: PSR est.

0

10

20

30

40

50

60

70

80

90

1Q

FY

08

2Q

FY

08

3Q

FY

08

4Q

FY

08

1Q

FY

09

2Q

FY

09

3Q

FY

09

4Q

FY

09

1Q

FY

10

2Q

FY

10

3Q

FY

10

4Q

FY

10

10%

12%

14%

16%

18%

20%

22%Revenue (AUD)

EBIT (AUD)

EBIT margin (%)

Source: PSR est.

0

10

20

30

40

50

60

70

80

90

1001Q

FY

08

2Q

FY

08

3Q

FY

08

4Q

FY

08

1Q

FY

09

2Q

FY

09

3Q

FY

09

4Q

FY

09

1Q

FY

10

2Q

FY

10

3Q

FY

10

4Q

FY

10

0%

2%

4%

6%

8%

10%

12%Revenue (GBP)

EBIT (GBP)

EBIT margin (%)

Fig A5. Rail & SBST bus ridership (‘mn) Fig A6. Rail (SGD ‘mn)

Source: PSR est.

25

30

35

40

45

50

1Q

FY

08

2Q

FY

08

3Q

FY

08

4Q

FY

08

1Q

FY

09

2Q

FY

09

3Q

FY

09

4Q

FY

09

1Q

FY

10

2Q

FY

10

3Q

FY

10

4Q

FY

10

200

205

210

215

220

225

230Rail ridership

Bus ridership

Source: PSR est.

0

5

10

15

20

25

30

35

40

45

1Q

FY

08

2Q

FY

08

3Q

FY

08

4Q

FY

08

1Q

FY

09

2Q

FY

09

3Q

FY

09

4Q

FY

09

1Q

FY

10

2Q

FY

10

3Q

FY

10

4Q

FY

10

10%

12%

14%

16%

18%

20%

22%

24%Revenue (SGD)

EBIT (SGD)

EBIT margin (%)

Fig A7. Taxi Sales Spread by Geography (FY10) Fig A8. Singapore Taxi (SGD ‘mn)


Singapore

70.9%

UK

15.2%

China

12.7%

Australia

0.5%

Vietnam

0.8%

Source: PSR est.

0

50

100

150

200

250

1Q

FY

08

2Q

FY

08

3Q

FY

08

4Q

FY

08

1Q

FY

09

2Q

FY

09

3Q

FY

09

4Q

FY

09

1Q

FY

10

2Q

FY

10

3Q

FY

10

4Q

FY

10

6%

7%

8%

9%

10%

11%

12%

13%

14%Revenue (SGD)

EBIT (SGD)

EBIT margin (%)


14

Fig A9. UK Taxi (GBP ‘mn) Fig A10. China Taxi (CNY ‘mn)

Source: PSR est.

0

5

10

15

20

25

30

1Q

FY

08

2Q

FY

08

3Q

FY

08

4Q

FY

08

1Q

FY

09

2Q

FY

09

3Q

FY

09

4Q

FY

09

1Q

FY

10

2Q

FY

10

3Q

FY

10

4Q

FY

10

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%Revenue (GBP)

EBIT (GBP)

EBIT margin (%)

Source: PSR est.

0

20

40

60

80

100

120

140

160

180

200

1Q

FY

08

2Q

FY

08

3Q

FY

08

4Q

FY

08

1Q

FY

09

2Q

FY

09

3Q

FY

09

4Q

FY

09

1Q

FY

10

2Q

FY

10

3Q

FY

10

4Q

FY

10

15%

20%

25%

30%

35%

40%

45%Revenue (CNY)

EBIT (CNY)

EBIT margin (%)

Fig A11. Currency monitor (AUD & USD) Fig A12. Currency monitor (GBP & CNY)

Source: Bloomberg, PSR

0.95

1.05

1.15

1.25

1.35

31-D

ec-0

8

31-M

ar-0

9

30-J

un-0

9

30-S

ep-0

9

31-D

ec-0

9

31-M

ar-1

0

30-J

un-1

0

30-S

ep-1

0

31-D

ec-1

0

31-M

ar-1

1

30-J

un-1

1

30-S

ep-1

1

31-D

ec-1

1

1.20

1.30

1.40

1.50

1.60AUD:SGD, LHS USD:SGD, RHS


1.90

2.00

2.10

2.20

2.30

2.40

2.50

31-D

ec-0

8

31-M

ar-0

9

30-J

un-0

9

30-S

ep-0

9

31-D

ec-0

9

31-M

ar-1

0

30-J

un-1

0

30-S

ep-1

0

31-D

ec-1

0

31-M

ar-1

1

30-J

un-1

1

30-S

ep-1

1

31-D

ec-1

1

0.19

0.2

0.21

0.22

0.23GBP:SGD, LHS CNY:SGD, RHS

* Downslope indicates strengthening of SGD Fig A13. Energy Price monitor Fig A14. T12M P/E (X)


0

20

40

60

80

100

120

140

31-D

ec-0

8

31-M

ar-0

9

30-J

un-0

9

30-S

ep-0

9

31-D

ec-0

9

31-M

ar-1

0

30-J

un-1

0

30-S

ep-1

0

31-D

ec-1

0

31-M

ar-1

1

30-J

un-1

1

30-S

ep-1

1

31-D

ec-1

1

0

50

100

150

200

250

WTI (USD/bbl), LHS WTI (SGD/bbl), LHSElectric (SGD/MWh), RHS

Source: Bloomberg, CapitalIQ, PSR est.

10

12

14

16

18

20

22

Mar-0

3

Sep-0

3

Mar-0

4

Sep-0

4

Mar-0

5

Sep-0

5

Mar-0

6

Sep-0

6

Mar-0

7

Sep-0

7

Mar-0

8

Sep-0

8

Mar-0

9

Sep-0

9

Mar-1

0

Sep-1

0

Mar-1

1

Average +1SD

-1SD T12M P/E

Annex B- Valuation parameters Valuation Methodology

Financial Year ending 31st Dec FY11E FY12E FY13E FY14E FY15E FY16E FY17E FY18E FY19E FY20E FY21E FY22E FY23E FY24E FY25E FY26E FY27E FY28E FY29E

Method 1: DCF model (FCFE)

Stage 1 of FCFE (explicit forecast till FY15e) 163.8 189.4 230.9 254.9 278.9

CFO CAGR (FY10A to FY15e) 4.78%

Stage 2 of FCFE growth (FY15e to FY29e) 291.5 303.9 315.9 327.6 338.9 349.6 359.7 369.1 377.8 385.7 392.6 398.7 403.7 407.8

Fade stage grow th to terminal (%) 1.00%

Grow th fade per year 0.27%

Stage 3 of FCFE growth (beyond FY29e)

Terminal grow th, g (%) 1.00%

Adjusted FCFE 189.4 230.9 254.9 278.9 291.5 303.9 315.9 327.6 338.9 349.6 359.7 369.1 377.8 385.7 392.6 398.7 403.7 407.8

Terminal FCFE 5,716.2

Discount rate (%) 8.2%

(Rf=3.0%, Risk premium=7%, β=0.74)

Discounted FCFE to FY11e 182.1 205.2 209.3 211.6 204.4 196.9 189.2 181.4 173.4 165.3 157.2 149.0 141.0 133.0 125.1 117.4 109.9 1,540.6

Sum of Discounted FCFE to FY29e 4,392.0

Add: Net Cash 0.0

Intrinsic Value (S$ 'mn) 4,392.0

Method 2: P/E (X)

P/E target multiple (X) 17.0

FY11e PATMI 236.7

Target Value (S$'mn) 4,023.2

Blended Value (Simple Average) (S$'mn) 4,207.6

Divided by outstanding no. of shares ('mn) 2,088.9

Target Price per share (S$) 2.01

Current Market Price (S$) 1.51

F12M DPS (S$) 0.062

Price upside (%) 33.4%

Dividend yield (%) 4.1%

Total return (%) 37.5%

Source: PSR est.

Financials Income Statement for FY ending

31 December (SGD 'million)2009A 2010A 2011E 2012E 2013E

Balance Sheet for FY ending

31 December (SGD 'million)2009A 2010A 2011E 2012E 2013E

Revenue 3,051.8 3,206.9 3,332.3 3,369.6 3,494.7 PPE 2,236.5 2,381.4 2,613.7 2,787.0 2,938.6

Bus 1,530.9 1,612.2 1,646.9 1,634.2 1,689.7 Intangibles 534.8 533.2 534.7 536.2 537.7

Bus Station 21.4 22.7 21.9 22.5 25.1 Associates & JVs 122.3 125.9 126.7 127.4 128.2

Rail 119.7 134.4 146.7 158.6 167.8 Others 295.4 340.4 340.4 340.4 340.4

Taxi 927.6 981.9 1,043.0 1,067.8 1,112.3 Total non-current assets 3,189.0 3,380.9 3,615.5 3,791.0 3,944.9

Automotive Engineering 307.4 300.1 312.1 321.5 331.1 Inventories 54.6 58.7 57.6 57.6 59.5

Vehicle Inspection & Testing 77.3 83.7 89.6 92.2 95.0 Accounts Receivables 313.1 369.3 350.3 353.9 365.6

Car rental & leasing 33.3 33.6 33.9 34.3 34.6 ST Investments 10.1 5.8 5.8 5.8 5.8

Driving centre 34.2 38.3 38.3 38.7 39.1 Cash 485.6 566.7 542.3 543.1 580.4

EBITDA 629.8 679.3 703.1 742.3 780.7 Others 0.0 0.0 0.0 0.0 0.0

Depreciation & Amortisation (279.9) (290.9) (301.2) (330.2) (351.9) Total current assets 863.4 1,000.5 956.1 960.4 1,011.2

EBIT 349.9 388.4 402.0 412.0 428.8 Total Assets 4,052.4 4,381.4 4,571.6 4,751.4 4,956.2

Interest & Investment Income 5.6 7.2 6.7 6.4 6.4 Loans 130.4 188.2 188.2 188.2 188.2

Finance Expense (29.1) (35.7) (41.3) (43.7) (46.0) Accounts Payables 608.0 587.4 598.3 597.9 616.2

PBT ex-associates & JVs 326.4 359.9 367.4 374.7 389.2 Others 114.0 102.6 102.6 102.6 102.6

Results of associates & JVs 7.7 6.4 7.6 7.6 7.6 Total current liabilities 852.4 878.2 889.1 888.7 907.0

PBT 334.1 366.3 374.9 382.3 396.8 Loans 466.4 523.1 565.5 605.5 645.5

Taxation (58.4) (78.1) (78.7) (80.3) (83.3) Fuel equalisation account 34.1 40.0 40.0 40.0 40.0

Net Profit 275.7 288.2 296.2 302.0 313.5 Deferred grants 244.8 301.9 301.9 301.9 301.9

Profits to MI 56.2 59.7 59.5 60.4 62.7 Others 242.5 290.6 290.6 290.6 290.6

PATMI 219.5 228.5 236.7 241.6 250.8 Total non-current liabilities 987.8 1,155.6 1,198.0 1,238.0 1,278.0

Shareholder Equity 1,690.0 1,800.5 1,907.7 2,017.7 2,132.8

Growth and Margins (%) 2009A 2010A 2011E 2012E 2013E Minority Interests 522.2 547.1 576.9 607.1 638.4

Revenue grow th -2.2% 5.1% 3.9% 1.1% 3.7% Total Equity 2,212.2 2,347.6 2,484.5 2,624.7 2,771.2

EBIT grow th 14.9% 11.0% 3.5% 2.5% 4.1%

PATMI grow th 9.7% 4.1% 3.6% 2.1% 3.8% Segmental EBIT margin (%) 2009A 2010A 2011E 2012E 2013E

Bus 8.1% 9.3% 9.3% 9.8% 9.8%

EBITDA margin 20.6% 21.2% 21.1% 22.0% 22.3% Bus Station 48.1% 46.7% 40.4% 41.0% 41.0%

EBIT margin 11.5% 12.1% 12.1% 12.2% 12.3% Rail 17.1% 19.0% 19.4% 19.0% 19.0%

Net Profit Margin 9.0% 9.0% 8.9% 9.0% 9.0% Taxi 11.3% 12.1% 12.5% 11.9% 12.1%

Key operating statistics 2009A 2010A 2011E 2012E 2013E Automotive Engineering 16.7% 13.0% 11.0% 12.0% 12.0%

Bus ridership ('mn) 828.0 861.3 898.2 880.2 889.0 Vehicle Inspection & Testing 32.0% 32.6% 32.8% 33.0% 33.0%

Rail ridership ('mn) 135.6 157.1 174.8 185.3 192.8 Car rental & leasing 13.2% 17.6% 16.0% 15.0% 15.0%

Driving centre 28.4% 29.8% 29.0% 29.0% 29.0%

Cashflow (SGD 'million) 2009A 2010A 2011E 2012E 2013E

CFO Key Exchange rates 2009A 2010A 2011E 2012E 2013E

PBT 334.1 366.3 374.9 382.3 396.8 USD:SGD 1.40 1.28 1.23 1.23 1.23

Adjustments 314.4 331.1 328.2 359.9 383.9 AUD:SGD 1.26 1.31 1.21 1.17 1.17

Cash from ops before WC changes 648.5 697.4 703.1 742.3 780.7 GBP:SGD 2.27 2.00 2.00 2.05 2.05

WC changes 132.2 (61.0) 30.9 (3.8) 4.6 CNY:SGD 0.21 0.19 0.20 0.21 0.21

Cash generated from ops 780.7 636.4 734.0 738.4 785.3 Per share data (SGD) 2009A 2010A 2011E 2012E 2013E

Taxes paid, net (52.3) (43.8) (78.7) (80.3) (83.3) Basic EPS 0.105 0.110 0.113 0.116 0.120

Interest paid (29.2) (35.3) (41.3) (43.7) (46.0) Diluted EPS 0.105 0.109 0.113 0.116 0.120

Cashflow from ops 699.2 557.3 614.0 614.4 655.9 Dividend 0.050 0.054 0.062 0.063 0.065

CFI Book value 0.810 0.862 0.913 0.966 1.021

CAPEX (452.0) (491.8) (492.6) (465.0) (465.0) Free cashflow to equity 0.207 0.086 0.078 0.091 0.111

Dividends/Interest from Investments 12.0 15.0 13.5 13.3 13.3

Proceeds from disposals 82.5 124.2 0.0 0.0 0.0 Key Ratios 2009A 2010A 2011E 2012E 2013E

Investments in subs & associates (180.1) (47.1) 0.0 0.0 0.0 ROE (%) 13.5% 13.1% 12.8% 12.3% 12.1%

Others 0.0 0.0 0.0 0.0 0.0 ROA (%) 7.4% 6.8% 6.6% 6.5% 6.5%

Cashflow from investments (537.6) (399.7) (479.1) (451.7) (451.7) Financial leverage (X) 1.77 1.85 1.85 1.82 1.80

CFF Payout ratio 50.3% 50.3% 55.0% 55.0% 55.0%

Share issuance 0.9 5.2 0.0 0.0 0.0 Current ratio (x) 1.01 1.14 1.08 1.08 1.11

Loans, net of repayments 17.0 69.5 0.0 0.0 0.0

Dividends to shareholders (104.9) (112.1) (129.5) (131.7) (135.6) Valuation 2009A 2010A 2011E 2012E 2013E

Others 22.3 (32.2) (29.8) (30.2) (31.3) P/E (x) 15.6 14.2 13.3 13.1 12.6

Cashflow from financing (64.7) (69.6) (159.3) (161.9) (167.0) P/FCFE (X) 7.9 18.0 19.3 16.7 13.7

Net change in cash 96.9 88.0 (24.4) 0.8 37.2 Price/Book(x) 2.0 1.8 1.7 1.6 1.5

CCE, begin 408.3 485.6 566.7 542.3 543.1 Enterprise Value, EV (S$ 'mn) 3,421.5 3,237.9 3,154.4 3,154.4 3,154.4

Effects of exchange rates (19.6) (6.9) 0.0 0.0 0.0 EV/EBITDA (X) 5.4 4.8 4.5 4.2 4.0

CCE, end 485.6 566.7 542.3 543.1 580.4 Dividend yield (%) 3.1% 3.5% 4.1% 4.2% 4.3%

Source: Phillip Securities Research Pte Ltd


17

Ratings History

ComfortDelGro Corporation Ltd

Rating Date Closing price (S$)

Fair value (S$)

Remarks

Buy 24 March 2011 1.51 2.01 Update: Change of Analyst Buy 15 February 2011 1.56 1.81 FY10 Results Buy 23 December 2010 1.56 1.81 Update Buy 15 November 2010 1.46 1.75 3Q10 Results Buy 16 August 2010 1.55 1.75 2Q10 Results Hold 12 August 2010 1.58 1.73 Preview Buy 04 June 2010 1.41 1.73 Update Buy 17 May 2010 1.49 1.73 1Q10 Results Hold 11 February 2010 1.57 1.68 FY09 Results Buy 18 November 2009 1.73 1.89 3Q09 Results Hold 18 May 2009 1.72 1.89 1Q09 Results Hold 09 March 2009 1.50 1.92 Initiating Coverage

TRADING BUY Share price may exceed 10% on the upside over the next 3

months, however longer-term outlook remains uncertain BUY >15% upside from the current price HOLD -10% to 15% from the current price SELL >10% downside from the current price TRADING SELL

Share price may exceed 10% on the downside over the next 3 months, however longer-term outlook remains uncertain

Phillip Research Stock Selection

Systems We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a stock's risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation

18

Important Information

This publication is prepared by Phillip Securities Research Pte Ltd., 250 North Bridge Road, #06-00, Raffles City Tower, Singapore 179101 (Registration Number: 198803136N), which is regulated by the Monetary Authority of Singapore ( “Phillip Securities Research”). By receiving or reading this publication, you agree to be bound by the terms and limitations set out below. This publication has been provided to you for personal use only and shall not be reproduced distributed or published by you in whole or in part, for any purpose. If you have received this document by mistake, please delete or destroy it, and notify the sender immediately. Phillip Securities Research shall not be liable for any direct or consequential loss arising from any use of material contained in this publication. The information contained in this publication has been obtained from public sources which Phillip Securities Research has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively, the “Research”) contained in this publication are based on such information and are expressions of belief of the individual author or the indicated source (as applicable) only. Phillip Securities Research has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete, appropriate or verified or should be relied upon as such. Any such information or Research contained in this publication is subject to change, and Phillip Securities Research shall not have any responsibility to maintain or update the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will Phillip Securities Research or persons associated with or connected to Phillip Securities Research, including but not limited its officers, directors, employees or persons involved in the preparation or issuance of this report, (i) be liable in any manner whatsoever for any consequences (including but not limited to any special, direct, indirect, incidental or consequential losses, loss of profits and damages) of any reliance or usage of this publication or (ii) accept any legal responsibility from any person who receives this publication, even if it has been advised of the possibility of such damages. You must make the final investment decision and accept all responsibility for your investment decision including but not limited to your reliance on the information, data and/or other materials presented in this publication. Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this material are as of the date indicated and are subject to change at any time without prior notice. Past performance of any product referred to in this publication is not indicative of future results. This report does not constitute, and should not be used as a substitute for, tax, legal or investment advice. This publication should not be relied upon exclusively or as authoritative without further being subject to the recipient’s own independent verification and exercise of judgment. The fact that this publication has been made available constitutes neither a recommendation to enter into a particular transaction nor a representation that any product described in this material is suitable or appropriate for the recipient. Recipients should be aware that many of the products which may be described in this publication involve significant risks and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made unless all such risks are understood and an independent determination has been made that such transactions would be appropriate. Any discussion of the risks contained herein with respect to any product should not be considered to be a disclosure of all risks or a complete discussion of such risks. Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of any product. Any decision to purchase any product mentioned in this research should take into account existing public information, including any registered prospectus in respect of such product.

Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, may provide an array of financial services to a large number of corporations in Singapore and worldwide, including but not limited to commercial / investment banking activities (including sponsorship, financial advisory or underwriting activities), brokerage or securities trading activities. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, may have participated in or invested in transactions with the issuer(s) of the securities mentioned in this publication, and may have performed services for or solicited business from such issuers. Additionally, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, may have provided advice or investment services to such companies and investments or related investments as may be mentioned in this publication.

Phillip Securities Research or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report may, from time to time maintain a long or short position in securities referred to herein, or in related futures or options, purchase or sell, make a market in, or engage in any other transaction involving such securities, and earn brokerage or other compensation in respect of the foregoing. Investments will be denominated in various currencies including US dollars and Euro and thus will be subject to any fluctuation in exchange rates between US dollars and Euro or foreign currencies and the currency of your own jurisdiction. Such fluctuations may have an adverse effect on the value, price or income return of the investment. To the extent permitted by law, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, may at any time engage in any of the above activities as set out above or otherwise hold a interest, whether material or not, in respect of companies and investments or related investments which may be mentioned in this publication. Accordingly, information may be available to Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, which is not reflected in this material, and Phillip

19

Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the preparation or issuance of this report, may, to the extent permitted by law, have acted upon or used the information prior to or immediately following its publication. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited its officers, directors, employees or persons involved in the preparation or issuance of this report, may have issued other material that is inconsistent with, or reach different conclusions from, the contents of this material. The information, tools and material presented herein are not directed, intended for distribution to or use by, any person or entity in any jurisdiction or country where such distribution, publication, availability or use would be contrary to the applicable law or regulation or which would subject Phillip Securities Research to any registration or licensing or other requirement, or penalty for contravention of such requirements within such jurisdiction. Section 27 of the Financial Advisers Act (Cap. 110) of Singapore and the MAS Notice on Recommendations on Investment Products (FAA-N01) do not apply in respect of this publication. This material is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The products mentioned in this material may not be suitable for all investors and a person receiving or reading this material should seek advice from a professional and financial adviser regarding the legal, business, financial, tax and other aspects including the suitability of such products, taking into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to invest in any of such products. Please contact Phillip Securities Research at [65 65311240] in respect of any matters arising from, or in connection with, this document. This report is only for the purpose of distribution in Singapore.

Contact Information

Singapore Research Chan Wai Chee CEO, Research Special Opportunities +65 6531-1232 [email protected]

Lee Kok Joo, CFA Head of Research REITS, S-chips, Strategy +65 6531-1685 [email protected]

Joshua Tan Strategy & Macro Singapore, US, China +65 6531-1249 [email protected]

Magdalene Choong, CFA Investment Analyst SG & US Financials, Gaming +65 6531-1791 [email protected]

Alfred Low Investment Analyst Offshore & Marine, Telcos, Shipping +65 6531-1793 [email protected]

Phua Ming-weii Technical and Market Analyst +65 6531-1735 [email protected]

Go Choon Koay Bryan Investment Analyst Property +65 6531-1792 [email protected]

Derrick Heng Investment Analyst Aviation, Land Transport +65 6531-1221 [email protected]

Regional Member Companies

SINGAPORE

Phillip Securities Pte Ltd Raffles City Tower 250, North Bridge Road #06-00 Singapore 179101 Tel : (65) 6533 6001 Fax : (65) 6535 6631 Website : www.poems.com.sg

HONG KONG

Phillip Securities (HK) Ltd 11/F United Centre 95 Queensway, Hong Kong Tel : (852) 2277 6600 Fax : (852) 2868 5307 Website : www.poems.com.hk

THAILAND

Phillip Securities (Thailand) Public Co Ltd 15/F, Vorawat Building 849 Silom Road Bangkok Thailand 10500 Tel : (662) 635 1700 Fax : (662) 268 0921 Website : www.poems.in.th

MALAYSIA Phillip Capital Management Sdn Bhd B-2-6 Megan Avenue II

12 Jalan Yap Kwan Seng 50450 Kuala Lumpur Tel : (603) 2166 8099 Fax : (603) 2166 5099 Website : www.poems.com.my

CHINA Phillip Financial Advisory (Shanghai) Co. Ltd No 550 Yan An East Road, Ocean Tower Unit 2318, Postal code 200001 Tel: (86-21) 51699200 Fax: (86-21) 63512940 Website: www.phillip.com.cn

JAPAN

PhillipCapital Japan K.K. Nagata-cho Bldg., 8F, 2-4-3 Nagata-cho, Chiyoda-ku, Tokyo Tel : (81) 03 3666 2101 Fax : (81) 03 3664 0141 Website : www.phillip.co.jp

UNITED KINGDOM

FRANCE

King & Shaxson Capital Ltd 6

th Floor, Candlewick House

120 Cannon Street London EC4N 6AS Tel : (44) 207 426 5950 Fax : (44) 207 626 1757 Website : www.kingandshaxson.com

King & Shaxson Capital Ltd 35 rue de la Bienfaisance 75008 Paris

T: (33) 1 456 33100

comfortdelgro corporation ltd – latent potential with...

Documents