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Analysis on Jumbo Group’s shares

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Listed in SGX’s Catalist board on 9 November 2015, Jumbo Group has Temasek Holding subsidiary and Osim boss among its investors. With such strong support from institutional investors, it is no wonder that its share price surged from $0.25 to the current $0.65. Jumbo Group’s shares is definitely on form but what will be its outlook for 2017?

The one thing I like about Jumbo Group is that its business is simple and easy to understand. Basically as a multi-concept dining food and beverage company, Jumbo has a total of 15 F&B outlets in Singapore and 3 F&B outlets in the PRC, under 5 restaurant brands – Jumbo Seafood, JPOT, NG AH SIO Bak Kut Teh, Chui Huay Lim Teochew Cuisine and J Café. It also manages 1 Singapore Seafood Republic outlet.

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As a consumer, I have also patronized many of Jumbo restaurants before and thus, is able to validate some of its famous dishes – chili crab, black pepper crab and hotpot. Through these dining experiences, I have certain level of confidence in the restaurant brand.

As usual, I did some research using SGX’s StockFacts on Jumbo Group. Revenue has been growing steadily from $97.6 million (FY2013) to $112.4 million (FY2014) to $122.8 million (FY2015) to $136 million (FY2016). Net income increased from $7.5 millon (FY2012) to $15.5 million (FY2016). Return on Equity (ROE) for the last few years was also at the double digits figure. These data indicates that Jumbo Group is growing positively.

Balance sheet for Jumbo Group was healthy, with current assets at $66.7 million and total liabilities at $19.7 million. Jumbo’s cash-flow was also great, at about $20 million. Net Asset Value (NAV) was $0.10 while Net Current Asset Value Per Share (NCAVPS) was $0.07.

Jumbo is currently trading at about $0.65 per share. At this level, valuation for the shares seems high. Under the current climate, there is downside risk for investors to enter at this price because even though Jumbo’s business is in the food and beverage business, its target customers are middle to high income earners. Thus, its business will be sensitive to economic conditions.

Nevertheless, I continue to like Jumbo Group because it operates in a niche spectrum within the food and beverage market. I will continue to monitor this counter and provides future updates and analysis on it.

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  1. PB>6, too expensive in my view for a counter lack of fancy stories

  2. Hi Bruce,

    Totally agreed with you! That is why I never enter this counter.


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