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Jumbo Group (JUMBO SP) FY19: Earnings Growth Driven By Margin Expansion
Jumbo’s 4QFY19 net profit of S$2.6m (+4.6% yoy) is largely within expectations. While revenue came in flat, declining 0.1% yoy in FY19, net profit grew 5.9% yoy, mainly due to higher gross and operating margins on cost efficiencies. We expect a better FY20 on stronger contributions from the Singapore operations and higher margins. Upgrade to BUY with a higher target price of S$0.44 as we roll over valuation to FY20 (20.3x FY20F PE).
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Kimly (KMLY SP) A Better Year Ahead; Stay NEUTRAL
Maintain NEUTRAL, new DCF-based TP of SGD0.24 from SGD0.23, 0% downside with 6% FY20F (Sep) yield. FY19 revenue rose 3% YoY, but PATMI dropped 8.4% from higher selling and distribution expenses. We expect Kimly to continue growing its footprint and diversifying product offerings. It recently synergised central kitchen operations, and announced the acquisition of 10 coffee shops and industrial canteens for SGD59m. With the ongoing investigations likely to create an overhang effect, we make no change to our call.
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Check out our compilation of Target Prices
