With the dominance of ridesharing platforms- Grab and GoJek today, is COMFORTDELGRO CORPORATION LTD (SGX:C52)'s business model doomed to fail?

Hi,

Taxi business is about 30% of comfot delgro business. If that amount contribute majority of the revenue then I will be concern but in real case it is not. By shorting, means that your gain is only 100% and your loss can be unlimited. Hence, based on probability the risk is too high to take.

The entrace of Grab and GoJek has certainly made the business environment way more competitive. However, I am skeptical to say that Comfort Delgro (CD) is doomed to fail.

The first point that I would make is that although it is in the transportation industry, its revenue streams include revenue from buses, bus maintenance, driving centres etc. It also has revenue streams flowing in internationally also.

Secondly, a lot of restructuring with regards to the transportation industry has also happened over the past few years, and potentially in the future too. These developments will have quite an impact on how CD fares too.

In fact, RHB Research has upgraded ComfortDelGro to “buy” recently (15th Feb). This is due to expected strong profit contribution from new acquisitions and continued organic growth in the public transport business. There is also expected to be a lack of significant rise in competition so far from Grab and GoJek .