RE: Re what they do18 Nov 2020 15:51
There are a few things that will impact the public transport service, specifically bus services over the next 5-20 years, yes im looking that far ahead.
1) - Electrification, at the moment its just getting past the sentiment of being a gimmick/future prospect and is now mobilising into real world benefits with the emphasis on every vehicle moving over to electric power. Many small operators will disappear as they cant afford the CAPEX, only a few large companies will survive, this will make massive reductions in NEXs cost base and give them power to demand higher prices.
2) Urbanisation, As the population continues to grow, NEX can bring the business model into other developing nations as the market continues to expand, this isn't the supermarkets where they are fighting over pennies with nowhere else to expand, this isn't a clothing retailer slashing prices to compete against online retailers. This is a genuine area of expansion we will see in the world for decades to come so the market will continue to increase irrelevant of market share size.
3)Automation of vehicles, though we are still far off, I can genuinely see within the next 10-20 years public transport such as buses become automated (at least in the cities), this will also produce cost savings and efficiencies, though its so far ahead its hard to quantify.
4)No car zones in major cities, this will continue as seen in London for example with congestion zones, Birmingham in 2021 (where NEX cover 96% of public bus services in the west midlands), this too will give it a massive boost in terms of market dominance, other countries are following similar routes where cars just cant be used or wont be practical in the city centres, this is where Buses and trams will dominate, there's no appetite for massive underground developments like the London underground and you could argue its damn near impossible without astronomical cost now. So bus industry will only benefit.
5) short term oil benefit, an obvious one which no one ever seems to mention, the fact the cost of crude is so low and has its obvious benefits of bringing NEXs cost base right down. I also think this is a permanent shift as oil just isnt going to get back to its all time highs again, cars will shift to electric faster then other sectors, so oil will remain low in price until the shift to electric.
Overall, im very bullish on public transport in general and no short term 1-2 year blip will throw the industry off. Most people in here are paying on the fact NEX is below pre covid, theres many many more reasons to be in this industry!
Sign In
Follow the stocks
