Cory Diary : Comfort Delgro

Covid-19 hits Comfort Delgro badly. Basically the company has to reduce their dividend significantly. Maybe too much, resulting large cash currently. Before the Pandemic, most of the Revenue is in Public Transport however quite an amount of profits do comes from Taxi operation. Their dividends have reached their peak way before Pandemic. A hint of competition ?

Most revenue comes from Singapore follow by UK/Ireland. Rest of the countries are not seeing significant growth. In year 2020 till now the company has a lot of support from the government that basically cover their losses and we know this support will be reducing as we move past vaccination phase. 

In the new Normal, I think Transport Operation will not be same again. There is also a lot of WFH leeway provides by many companies. Is it obvious they have to scale down their operation ? Unfortunately their oversea market doesn't seems moving. 

Continuing to give good dividends without a good support on earning is like cashing out and unsustainable. No doubt their cash level can sustain the company for a period. However from dividend yield or growth perspective, neither looks exciting for years to come unless they manage to ignite their businesses which so far doesn't looks like it will.

With limited cash, do we want to lock-up cash here when we can have Giant Chinese Tech companies on the low ? Another question is transportation a worthy recovery play vs other contenders ? Maybe there is other type of play but likely not my cup of tea.

Just me thinking out loud. Pls DYODD. 

Cory

2021-0710

Not Vested. At least not yet.

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.