CGS-CIMB: New Jumbo location to offer good margins despite premium location

CGS-CIMB said it expected the new Jumbo Seafood outlet would still post good margins, despite its premium location on Singapore’s Orchard Road shopping district.

“Despite the store’s location at a prime shopping mall, we understand from management that JUMBO has secured the retail space at a favourable rental cost and it could see profit margins similar to other Singapore JUMBO Seafood outlets apart from the one at the National Service Resort & Country Club,” CGS-CIMB said in a note on Thursday.

The brokerage also noted that the outlet was opening just ahead of the seasonally strong January-to-March quarter, which would historically see around 27-29 percent of the group’s full-year sales. That quarter typically includes the Lunar New Year holiday season.

Iconic chilli crab purveyor Jumbo Group said on Wednesday that it opened a new Jumbo Seafood restaurant outlet in Singapore at the high-end ION Orchard mall in the city-state’s tony shopping district.

That brought its total Jumbo Seafood outlets in Singapore to six, and brought the total number of outlets in Asia to 17, Jumbo said, adding it was the first new Jumbo Seafood outlet in Singapore in 10 years, and it was the first outlet in a Singapore mall.

It rates the stock at Add with a S$0.54 target price.

Shares of Jumbo were at S$0.40, up 2.56 percent, at 12:58 P.M. SGT; the Straits Times Index was down 1.26 percent at 1:27 P.M. SGT.

 

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