COMFORTDELGRO

COMFORTDELGRO | HOLD

TARGET PRICE: $2.16

MARCH 27 CLOSE: $2.02

CGS-CIMB, March 26

Grab announced that it has acquired Uber Technologies' South-east Asia business, with the Uber app to be phased out in South-east Asia.

Pursuant to this, we believe it is highly likely that ComfortDelGro's proposed tie-up with Uber could be renegotiated.

Many scenarios could pan out. We believe the lengthy review of the ComfortDelGro-Uber deal sets a precedence in terms of timeline for the review and sanctioning of the Grab-Uber deal as this merger could create another dominant market leader, this time among ride-hailing apps.

We believe many uncertainties surround the latest developments in Singapore's personal mobility industry.

As such, ComfortDelGro could stay unexciting in the near term. We maintain our "hold" call and discounted cash flow-based target price of $2.16 (weighted average cost of capital: 7.4 per cent), pending further information on the proposed ComfortDelGro-Uber deal.

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