Kevin Smith, of Delft Partners and portfolio manager of the TAMIM Asia Small Companies Fund, highlights one of the stocks in the Asia Small Companies portfolio. ComfortDelGro Corporation Ltd is one of the largest land transport companies in the world, the Group was formed on 29 March 2003 through the merger of two land transport companies - Comfort Group and DelGro Corporation.
Following the merger, ComfortDelGro has expanded significantly and now operates in seven countries and has a global fleet of about 42,300 vehicles. ComfortDelGro’s businesses include bus, taxi, rail, car rental and leasing, automotive engineering services, inspection and testing services, driving centres, non-emergency patient transport services, insurance broking services and outdoor advertising. Apart from being the market leader in Singapore, ComfortDelGro has a significant overseas presence. The Group’s operations currently extend from the United Kingdom and Ireland to Australia, Vietnam, Malaysia, as well as across 11 cities in China, including Beijing, Shanghai, Guangzhou, Shenyang and Chengdu.
Accounting, Strategy and Governance Comments
Value, Momentum and Quality Comments
ComfortDelGro sits in the top quintile of our VMQ ratings universe, with excellent quality and good value and momentum scores. The quality score is helped by a strong balance sheet and return on equity of 11.5%. The share price has shown strong price momentum against a weak market backdrop in the current year and earnings forecasts have been resilient in the past twelve months. There are 15 brokers providing regular coverage, 14 analysts have buy, overperform or hold recommendations on the stock with target prices in the range 15 to 30% above the current level.
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