March 14, 2019

Jumbo’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.

Updates after Taiwan ASEAN Conference. We recently met with Jumbo Group’s (Jumbo) management at the ASEAN Conference in Taiwan. This report highlights the key takeaways.

Jumbo targets to open more outlets in Singapore to drive growth in Singapore operations. In the next six months, Jumbo 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 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

JV in Korea to deepen footprint in the region. Jumbo 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.

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

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. Maintain HOLD with a PE-based target price of S$0.41. – UOB KayHian

Jumbo Group closed at: S$0.40