<News Analysis>: New LTA EV charging tender offers biggest opportunity yet
- LTA will be launching 12,000 EV charging points for tender in April
- We believe the CDG-ENGIE JV is well positioned to clinch a sizable share of the EV charging market
- Rough estimates show that the venture could eventually add S$60m a year to CDG’s bottom line
- Maintain BUY with TP of S$1.95
What’s New
LTA opens tender for 12,000 EV charging points. The tender will be launched in April and cover c.2,000 HDB carparks and comprise up to 10 packages each valid for 10 years. Tenderers will be assessed on 1) affordability and reliability and 2) innovative solutions to deter hogging of charging points
Our View
Upcoming tender offers ComfortDelGro biggest business opportunity in years. Recall that the ComfortDelGro-ENGIE JV was one of only 2 winners to win a pilot tender in September 2021 to provide c.600 charging points. We believe the CDG-ENGIE JV has the potential to clinch a sizable share of the new tender and become a market leader in Singapore’s EV charging space given 1) experience that CDG-ENGIE has gained from the pilot tender 2) similar criteria in the new tender compared to the pilot tender 3) extensive links that CDG has with the public sector given its position as a public transport operator. Based on our estimates, the venture could eventually add c.S$60m a year to CDG’s bottom line if the JV were to clinch a 50% market share of Singapore’s 40,000 EV charging points target.
| Scts/kWh | Remarks | |
| Pricing | 55.00 | ComfortDelGro currently prices at 55 Scts/kWh |
| Electricity Tariff | 27.22 | Prevailing electricity tariff for Jan – March 2022 |
| Concession Fee | 13.78 | Concession Fee paid to government in pilot tender- West: S$0.154/kWh, Central: S$0.144/kWh, East: S$0.108/kWh. Wt. average of 3 regions is S$0.1378/kWh |
| Maintenance | 1.00 | No details were provided, assumed at S$0.01/kWh. Capex for EV charging points is low with only single digit million capex incurred for 479 charging points |
| Profit | 13.00 | Excluding maintenance, depreciation, etc. |
| Profit margin | 23.6% |
Please refer to our ID page and the report dated 03 Sep 2021 for details of our estimates on earnings potential.