JOLLIBEE Food Corp. (JFC) has seen its shares decline after its pledged capital to the private equity fund that owns the Tim Ho Wan brand.
Data from the Philippine Stock Exchange showed a total of 2.95 million shares worth P675.81 million were traded from Sept. 27 to 30, making it the 13th most actively traded stock last week. Trading was suspended on Sept. 26 due to a typhoon.
Shares in Tony Tan Caktiong’s food service company shaved off 3% week on week, finishing at P229 apiece last Friday from its closing of P236 on Sept. 23. Still, the stock has grown by 6.5% since the start of the year.
Timson Securities, Inc. Equity Trader Jervin S. de Celis said investors went on a last-minute “buying spree” after the company announced its capital infusion with Titan Dining LP, despite JFC trading in the red earlier on Friday.
Titan Dining is the private equity fund that owns the Tim Ho Wan brand and company-owned Tim Ho Wan stores.
“JFC traded in the green the day after the news was announced, so I guess, investors snapped up some shares as they bank on the continuous expansion plans of the company in China,” Mr. De Celis said in an e-mail.
JFC, through its wholly owned subsidiary Jollibee Worldwide Pte. Ltd. (JWPL), announced in a disclosure on Wednesday its additional capital call commitment to Titan Dining, which is increasing its fund size to S$350 million from S$250 million.
With the increase, JWPL’s 90% participating interest in Titan is set to amount to S$315 million.
The additional fund is intended to be used for the expansion plan and working capital requirements as well as facilitate the completion of other projects of Tim Ho Wan.
Regina Capital Development Corp. Equity Analyst Jemimah Ryla R. Alfonso said in an e-mail that while the move prompted investors to buy shares at the last minute, the announcement did not support the positive momentum seen on Wednesday.
Ms. Alfonso also said that JFC’s move would compel investors to see it as a “catalyst to buy the stock.”
“The aggressive store network expansion could mean that the food giant could widen [its] international reach. If the firm stays true to its plans, Tim Ho Wan would have a total of 100 restaurants in Mainland China by 2024,” she said.
At present, JFC’s joint venture with Titan has 11 branches located in China while Tim Ho Wan stores totaled 67 in Asia, of which seven are in the Philippines.
However, Ms. Alfonso expressed confidence in the company as it continues to be resilient despite the turmoil seen in the local financial market.
“Overall, we could assume that there has been demand in this stock,” she said, pointing to bargain hunters in past days.
“For the subsequent week, market players should monitor the key areas of JFC, and non-holders could place bids should the near-term support holds,” she added.
Likewise, Mr. De Celis expects JFC’s network expansion abroad to boost its earnings as other countries eased their pandemic restrictions.
Mr. De Celis forecasts a P202-billion gross revenue while Ms. Alfonso expects a single-digit growth for its net income and gross revenue.
JFC’s attributable net income in the year’s first half amounted to P5.10 billion, up by 352% from the P1.13 billion recorded in the same period last year. Its revenues grew by 34.5% to P97.85 billion from the P72.77 billion previously.
Ms. Alfonso pegged the stock’s support at P222 levels, while its resistance at P235.
Meanwhile, Mr. De Celis placed the support level at around P215 to P216, as he expects pessimistic sentiment in the local stock market.
“For the resistance, JFC is struggling to break the P250 levels,” he added. — Mariedel Irish U. Catilogo