Brokers' take

Published Thu, Aug 10, 2017 · 09:50 PM

Jumbo Group | Hold Target price: S$0.67 August 10 close: S$0.56 DBS Group Research, August 10

We believe growth is expected to be challenged by higher costs. Q3 17 earnings revealed signs of higher operating costs led by rents and depreciation, while revenue has not tracked our expectations. Q3 17 core earnings were S$3.3 million (-2.6 per cent y-o-y (year-on-year)), below expectations. Revenue was slightly below our estimates at S$34.8 million (+6.4 per cent y-o-y), with growth driven by both Singapore and China stores. The disappointment came from higher than expected costs, which saw operating margins decline to 11.2 per cent (-0.7 percentage point). New stores are expected to contribute through JVs, partnerships, and franchises. But these are largely reflected in our growth projections. Jumbo currently trades at 20x FY18F, in line with regional peers. We see earnings growing at a slower pace than consensus.

Global Logistic Properties | Hold Target price: S$3.38 August 10 close: S$3.22 CIMB Research, August 8

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