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Jumbo to continue facing near-term cost pressures with ongoing expansion: DBS

Michelle Zhu
Michelle Zhu8/14/2018 01:17 PM GMT+08  • 2 min read
Jumbo to continue facing near-term cost pressures with ongoing expansion: DBS
SINGAPORE (Aug 14): DBS Group Research is maintaining “hold” on Jumbo Group with a lower target price of 57 cents based on 23 times FY19F earnings.
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SINGAPORE (Aug 14): DBS Group Research is maintaining “hold” on Jumbo Group with a lower target price of 57 cents based on 23 times FY19F earnings.

This comes after the group’s latest 3Q18 set of results missed DBS’s expectations due to slightly lower-than-projected revenue and higher costs.

To recap, Jumbo’s earnings fell 35% y-o-y to $2.2 million over the latest quarter under review, booking lower gross margins due to higher fresh seafood costs and promotional prices in its new Jumbo Seafood outlets in China. The group also registered higher-than-expected operating expenses due to the expansion of China’s corporate office and marketing expenses.

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