Jumbo

Jumbo: (S$0.465) Local broker raises TP by 12%
A local broker raised its TP for Jumbo from $0.49 to $0.55 and maintains its Buy rating on the stock, on stronger sales potential in China and an additional outlet in Singapore.

Following a management update, the house raised the average customer spending estimates in China by 3%, backed by the assumption that Jumbo's customised offerings for the different clientele segments at each of the three outlets in China will be well-received.

Further, channel checks at China's most popular restaurant review website Dianping.com underpinned demand for Jumbo's newest outlet at IFC mall in Shanghai, with a respectable average rating of 4.5/5, despite being opened for just a week.

In Singapore, the brokerage has also revised its store count forecast to two new stores by FY18, up from one initially. It believes Jumbo may open a new outlet in CBD, given the success of Riverside Point and its lack of presence in the area.

Supported by strong cash flow generation and visible expansion plans, the house maintains its upbeat view on the chilli crab seller. Potential catalysts may stem from better-than-expected earnings from its outlets in China.