Highlights

Jumbo Group - Takeaways From Taiwan Asean Conference

Date: 14/03/2019

Source  :  UOB KayHian
Stock  :  Jumbo       Price Target  :  0.41      |      Price Call  :  HOLD
        Last Price  :  0.38      |      Upside/Downside  :  +0.03 (7.89%)
 


  • Jumbo Group’s strategies and growth plans remain unchanged with management looking to anchor growth in the domestic market through new outlet openings and new F&B concepts while leveraging on brand equity to expand overseas footprints.
  • Maintain HOLD with a PE-based target price of S$0.41. Entry price: S$0.37.

What’s New

Updates after Taiwan ASEAN Conference.

  • We recently met with JUMBO GROUP LIMITED (SGX:42R)’s management at the ASEAN Conference in Taiwan. This report highlights the key takeaways.

Stock Impact

Supplementing growth of Singapore and China operations with new outlets.

  • Jumbo Group targets to open more outlets in Singapore to drive growth in Singapore operations. In the next six months, Jumbo Group intends to open one Jumbo Seafood restaurant, 1 new Teochew Cuisine outlet and 2 Tsui Wah Cha Chaan Teng outlets in Singapore.
  • In addition, Jumbo Group also cited the potential opening of 1 new outlet in Shanghai and up to 2 new outlets in Beijing. Management is also exploring JVs and/or franchises in other Chinese cities such as Shenzhen and Xiamen.

JV in Korea to deepen footprint in the region.

  • Jumbo Group entered into a JV with TCI Inc. , a subsidiary of Didim Inc. to introduce Jumbo Seafood into South Korea. The first Jumbo Seafood restaurant is targeted to be operational in Seoul by Sep 19.

Open to M&A opportunities.

  • In addition to new outlet openings in Singapore and overseas markets, management remains open to M&A opportunities which can enhance Jumbo Group’s current brand mix or are complementary to its current business.

Earnings Revision / Risk

2019-21 earnings forecasts remain unchanged.

  • We maintain our earnings forecasts as we await announcements of any conclusion of new franchises or outlet openings.
  • Risks include a slowdown in sales in China and poor reception at new outlets.

Valuation / Recommendation

  • Maintain HOLD with a PE-based target price of S$0.41, pegged to peers’ average 2019F PE of 20.0x. Entry price is S$0.37.

Share Price Catalyst

  • Higher-than-anticipated store openings.
  • Franchising deals with regional companies.

Source: UOB Kay Hian Research - 14 Mar 2019

Share this
Labels: Jumbo

Related Stocks

Chart Stock Name Last Change Volume 
Jumbo 0.38 0.00 (0.00%) 125 

  Be the first to like this.
 


 

131  133  162  676 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 Rex Intl 0.088-0.005 
 TEE Intl 0.046+0.004 
 YZJ Shipbldg SGD 1.05-0.03 
 Spackman 0.013+0.001 
 Mapletree Ind Tr 2.40+0.07 
 Keppel DC Reit 1.97+0.04 
 Kep Infra Tr 0.525+0.005 
 LionGold 0.0010.00 
 Medtecs Intl 0.039+0.007 
 Mapletree Com Tr 2.22+0.06 
Partners & Brokers