Jumbo Group announced on Monday that it has entered into a joint venture agreement to open its first Jumbo Seafood restaurant in Beijing, China.
The new restaurant is slated for opening by the third quarter of 2017, and will be the latest addition to its three existing restaurants in Shanghai.
The agreement was concluded between its indirect wholly-owned subsidiary Jumbo F&B Services (Shanghai) and Beijing Hualian (SKP) Departmental Store, a member of the Beijing Hualian Group.
The former will hold a 51 per cent stake in the JV, while Beijing Hualian (SKP) will hold the remaining 49 per cent.
Under the terms of the agreement, the JV company will be incorporated under the laws of China with a registered capital of 10 million yuan.
Jumbo's investment will be funded by internal resources and not expected to have any material impact on the net tangible assets per share and earnings per share for the current financial year ending Sept 30, 2017.
The group said that this development is in line with its plans to expand its brands to other major cities in Asia, and for the group and its JV partner to leverage on each other's expertise. It will also strengthen the group's market position and add value to its existing business, said Jumbo.
Read also: Jumbo profit jumps 46 per cent to $15.5m for full year
The latest restaurant will be located within Beijing SKP, a high-end luxury and fashion shopping mall in the capital, which is operated by Beijing Hualian (SKP) Departmental Store.
Ang Kiam Meng, group CEO and executive director of Jumbo, said: "The restaurant's privileged location enables us to reach out to the more affluent segment of the market, which is cosmopolitan in outlook and more adventurous in their culinary pursuits."
The group intends to capitalise on their experience and knowledge in operating Jumbo Seafood restaurants in Shanghai and adapt these for their operations in Beijing.
Mr Ang added that the group's overseas expansion plans are shaping up well.
This comes shortly after Jumbo's signed a franchise agreement in Vietnam in December 2016, with plans in the pipeline to open three outlets in Ho Chi Minh City and Danang over the next two years.
In its latest quarterly earnings for the period ended Dec 31, 2016, Jumbo Group had a net profit of S$2.6 million, up from S$2.1 million year-on-year.
Its revenue also went up by 5.8 per cent to S$32.7 million, mainly due to increased revenue contribution from its Jumbo Seafood outlets in Shanghai.
In a report released by Maybank Kim Eng Research on Feb 14, 2017, analysts noted better-than-expected Singapore and China sales, especially from new outlets.
The report stated: "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 this growth."
Jumbo ended trading one cent up to close at 71 Singapore cents on Monday.
Read also: Jumbo's crab dishes stir Chinese appetite
This article was first published on March 21, 2017.
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