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@Furore：$COMFORTDELGRO CORPORATION LTD(C52.SI)$(CDG) - Awarded bus contracts in Australia CDG made an announcement in a media release that it has been awarded with three bus contracts totalling A$1.7 bn in Sydney, New South Wales. Two of these contracts are renewals. These contracts will run for up to 8 years, but is relatively insignificant with an estimated 2% increment to net profits. However, this highlights CDG's ability to recontract and gain more market share. The clinched renewals and new bus regions will expand its share of bus market in Australia. These bus contracts are for the operation of bus services in the Greater Sydney area, pertaining to Regions 4, 14 and 12.Regions 4 and 14 are contracts in which the Group is currently operating, while Region 12 is currently run by another operator and will be consolidated into Region 14. The new Region 4 contract will run for eight years commencing in Apr 2023, while the new Region 14 contract will commence in May 2023 and run for seven years. A reaffirmation on its bus operations Down Under; rough estimates of ~2% increment to net profit. Based on the media announcement indicating the contract value of A$1.7bn (S$1.53bn), this is estimated to about a contract value of roughly A$225m (or S$200m) per year. While this is not significant, it shows CDG's ability to recontract and gain market share. In fact, it has also earlier won another tender in the Northern Territory to become the sole operator of public transport bus service in Darwin, Palmerton and Rural Areas with a fleet of over 220 buses. This is positive news for this company and its share price has yet to reflect the improving financial performance. CDG continues to benefit from normalisation of COVID-19 restrictions, while its share price has yet to reflect that as well. Its 3Q22 business update will be on 14 Nov. There could be a short term upside potential from now till mid-Nov and this stock could be worth given a consideration. On 2nd Nov, I made a post saying that this stock has a short term upside potential and could hit $1.37-$1.40 as it nears mid Nov, when the stock was still trading around $1.30-$1.32. Even though the short term upside potential is not huge now ($1.36 last traded), I would still recommend to buy this stock for short term trading, as I feel it should be able to hit $1.40 soon. I'm vested, so I could be biased. Hence, please DYODD before making any trading decisions. Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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