Brokers' Call

Jumbo Seafood restaurant in East Coast Park.
Jumbo Seafood restaurant in East Coast Park.ST PHOTO: LIM SIN THAI

CAPITALAND

Broker: OCBC Investment Research

Call: Buy

Target Price: $3.68

Fourth-quarter profit after tax and minority interest (Patmi) in 2016 rose 73.8 per cent year on year to $430.5 million, mostly due to improved operating performance, higher fair value gains and reduced impairments over the quarter.

Excluding gains from the change in use, operating Patmi for financial year 2016 rose 27.8 per cent year on year to $834.8 million, mostly due to higher recognition of profits in China and better contributions from CapitaGreen and the shopping mall portfolio.

Overall, this set of results is fairly healthy and in line with expectations. The group proposed a final dividend of 10 cents per share, versus nine cents in 2015.

The company has delivered a balanced set of results in an uncertain environment due to its diversified asset portfolio and recurring income streams.

JUMBO GROUP

Broker: Maybank Kim Eng

Call: Hold

Target Price: 75 cents

Jumbo Group's first-quarter sales in 2017 accounted for 22 per cent of full-year forecast.

But, revenue- wise, this is traditionally Jumbo's weakest quarter.

Reported net profit rose 26 per cent year on year but fell 5.7 per cent year on year after adjusting for approximately $700,000 in initial public offering costs in the first quarter of 2016.

Singapore sales grew 0.5 per cent year on year in 2017 first quarter, recovering from a 4.2 per cent year on year decline in the fourth quarter of 2016.

Shanghai sales grew 53 per cent year on year but there has been a slowdown in the growth rate, and Jumbo needs to open more outlets to rev up this growth.

Jumbo has pursued the franchising business for the past 12 months, which has led to one deal being signed, but revenue has not yet started to flow. Franchise and joint-venture deals in China (for seafood) and Thailand (for non-seafood) are being negotiated. The Vietnam franchise has already been announced.

A version of this article appeared in the print edition of The Straits Times on February 20, 2017, with the headline 'Brokers' Call'. Print Edition | Subscribe