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How to Invest in the Transport Sector Through ComfortDelGro

ComfortSingapore Other than cars, there are various other ways to get around Singapore; there is the MRT, buses, and of course taxicabs (though some may argue that you can also use your own legs). Over half of Singapore’s population utilises the public transport system. One quick way to invest in the Singapore transport sector would be to cast your investor’s eye to ComfortDelGro Corporation (SGX: C52).

Not many are aware that Comfortdelgro currently operates in 7 countries across 3 continents. In fact, about 50% of their revenue and profits are derived from outside of Singapore. In Singapore, they are well-known for having the largest taxi fleet in the country and they operate their bus and rail business through their 75% listed subsidiary, SBS Transit Ltd (SGX: S61). VICOM Ltd (SGX: V01), the main inspection and testing company in Singapore, is also their 67% subsidiary, which has proven to be one of the crown jewel of their business.

Casting our eyes at the company’s international operations, we first look to Asia. In China, ComfortDelGro owns a large fleet of taxis and buses in more than a dozen cities. In other parts of Asia, they are present in the taxi industry in Vietnam and the car rental industry in Malaysia. Over in Australia, ComfortDelGro manages public and private bus services in Sydney and Melbourne. The company is also a leader in Perth’s taxi industry, controlling about 91% of the market.  Further in Europe, they control bus and coach services in major cities that include London, Glasgow, and Dublin. It is interesting to note that the company’s taxi business operates on a different model overseas as compared to Singapore. Instead of ComfortDelGro owning the taxi fleet and renting them out, the drivers will own their vehicles. Instead, ComfortDelGro operates the radio circuit system for the drivers in return for a subscription fee. Their taxi radio circuit business covers cities like London, Liverpool and Birmingham.

Foolish Bottom Line

An investor who owns shares in ComfortDelGro would not only be invested in the local Singapore market, but also in the transport sector internationally. Other companies with a predominantly local focus include SMRT Corporation (SGX: S53) and SBS Transit Ltd.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim owns SBS Transit Ltd.