SHARES in Tony Tan Caktiong-led Jollibee Foods Corp. (JFC) rose last week following a disclosure of its acquisition of a majority stake in South Korean brand Compose Coffee.
Data from the Philippine Stock Exchange showed that a total of 2.71 million shares worth P623.46 million were traded from July 1 to 5, positioning JFC as the 10th most active stock in the local market during that period.
JFC shares increased by 3.5% week on week, closing at P234 per share, up from P226 per share on June 28.
Year to date, JFC’s share price has decreased by 6.9%.
Philippine National Bank Senior Equity Research Analyst Jonathan J. Latuja said in an e-mail that Jollibee’s share price was up by more than 3% last week, which was a continuation of its ascent since the previous week.
“Excitement about the acquisition of the Korean brand, Compose Coffee, was positively received by the market, which drove Jollibee stock price higher. Compose Coffee could be earnings accretive,” said Mr. Latuja.
“This looks bullish as they are expanding their presence one country at a time. With the new acquisition, valuation will surely increase since it will add value to their current portfolio,” Jeff Radley C. See, head trader at Mercantile Securities Corp., said in a Viber message.
In a disclosure last week, JFC announced that its wholly owned subsidiary, Jollibee Worldwide Pte. Ltd. (JWPL), acquired a 70% stake in Compose Coffee Co., Ltd. and its roasting facility, JMCF Co., Ltd., collectively referred to as Compose Coffee, for $340 million (approximately P20 billion). This acquisition aims to strengthen JFC’s coffee and tea business.
Private equity firm Elevation Equity Partners Korea Ltd. will get a 25% stake while Titan Dining II LP (Titan Fund II) will have the remaining 5%.
Jollibee has a 90% participating interest in Titan Fund II through JWPL. The deal was finalized after the signing of definitive agreements.
With the acquisition of Compose Coffee, Jollibee expects a 2% increase in revenues, bringing the international business’ contribution to 41% of global revenues.
Jollibee’s attributable net income in 2023 amounted to P8.77 billion, up by 16% from P7.56 billion in 2022.
Its revenues increased by 15.2% to P244.11 billion in 2023 from P211.9 billion previously.
Jollibee saw a 26.9% increase in its first-quarter attributable net income to P2.62 billion as system-wide sales grew by 10.4% to P86.83 billion.
Mr. Latuja projected a year-on-year revenue growth of 12%.
Mr. See identified support levels at P230 and PHP224 per share, with a resistance level at P240 per share.
The company expanded its store network by 5.3% to 6,886 stores as of the end of March, comprising 3,337 stores in the Philippines and 3,549 international branches. — Lourdes O. Pilar
