SHARES of Jollibee Foods Corp. (JFC) declined last week following the company’s announcement to sell its stake in the landlord of its poultry processing plant, coupled with the latest MSCI rebalancing.
A total of 6.79 million JFC shares worth P1.57 billion were traded from May 26 to 30, making it the 11th-most actively traded stock last week, according to Philippine Stock Exchange (PSE) data.
JFC shares dropped 8.2% to P223 per share last Friday from the P242.80 close on May 23. This decline outpaced the 0.5% week-on-week fall of the industrial sector and the PSE index’s 1.1% drop.
Year to date, JFC shares have lost 17.1% of their value, underperforming the industrial sector (-4.1%) and the PSE index (-2.9%).
Juan Alfonso G. Teodoro, equity research analyst at Timson Securities, Inc., identified two possible factors behind JFC’s decline.
First is the MSCI Global Small Cap Index rebalancing on May 30, which saw the addition of Aboitiz Equity Ventures and removal of Bloomberry Resorts Corp. and Wilcon Depot, Inc.
Mr. Teodoro said, “Even though [JFC] was actually the top-weighted stock in the MSCI rebalancing, it still ended lower. Normally, being top weighted in MSCI is a good thing since it can lead to buying from funds that track the index. But in this case, it looks like that wasn’t enough to outweigh the concerns.”
Another factor cited was investor sentiment reacting to JFC’s sale of its 30% stake in C-Joy Poultry Realty, Inc.
On May 26, JFC divested its 30% stake in C-Joy Poultry Realty for P33.8 million as part of its shift toward an asset-light business model.
The stake was sold to Agrotex Commodities, Inc. via a share purchase agreement and deed of assignment covering 113,250 shares priced at P299.16 each.
C-Joy Poultry Realty owns the property in Sto. Tomas, Batangas, where the poultry processing plant of C-Joy Poultry Meats Production, Inc. is located.
Mr. Teodoro explained that JFC’s asset-light business model signals a strategy to reduce ownership of physical assets such as buildings and land, focusing more on operations.
“In the short term, it gives them a bit more cash and flexibility, which they can use to invest in other areas, perhaps expand stores or other ventures with faster returns. For the long term, it shows they’re aiming to be leaner and more efficient,” he added.
JFC will retain its 30% stake in C-Joy Poultry Meats, while American food company Cargill, Inc. holds the remaining 70%.
C-Joy Poultry Meats supplies raw and marinated chicken to JFC brands including Jollibee, Chowking, and Mang Inasal.
JFC’s attributable net income for the first quarter fell 8.1% to P2.41 billion from P2.65 billion in the same period in 2024.
Mr. Teodoro forecasted JFC’s second-quarter earnings at P2.2 billion and full-year earnings at P17.8 billion.
For the week, Mr. Teodoro identified JFC’s support levels at P220-P216 and resistance at P240-P245. — J.P.G. Villanueva
