ComfortDelGro

ComfortDelGro > Buy

OCBC Investment, April 6

April 6 close: S$2.08

Fair value: S$2.25

COMFORTDELGRO'S (CDG) taxi business remains in the midst of a dynamic competitive landscape as Grab announced on March 26, 2018 the acquisition of Uber's South-east Asia operations. Given such a fluid situation, we see several possible outcomes depending on the decision of Competition Commission of Singapore (CCS) and how ComfortDelGro's proposed acquisition of Uber's rental company turns out.

In our view, even if CCS approves the merger, it is likely that there will be restrictions on Grab to ensure it does not take any action that will result in further decline of the taxi industry so as to maintain a fair level of competitiveness of both industries.

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