SINGAPORE (Mar 25): DBS is downgrading its recommendation on Jumbo to “hold” from “buy” previously with a lowered target price of 18 cents from 38 cents previously.

In a Wednesday report, lead analyst Alfie Yeo says, “We were sideswiped by the rapid deterioration and severe restriction arising from Covid-19. While share price has taken a severe beating, we believe it could take time for operations to normalise, and we are hence downgrading Jumbo to ‘hold’.”

In Singapore, travel restrictions and social distancing measures are currently in place, while China is experiencing a slowdown. Hence these are expected to deeply impact Jumbo’s FY20 earnings, such that its China business is expected to head back into losses from FY20.

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