By Denise A. Valdez
Reporter

LOCAL companies with operations in mainland China are closing shop amid the novel coronavirus scare, as the epidemic push the death count and confirmed cases higher by the day.

Jollibee Foods Corp. (JFC) announced yesterday it had indefinitely shut down 14 of its 389 stores in China that are located in the province of Hubei, where Wuhan City is. The city was identified as where the virus broke out.

“Today and in recent days, all 14 stores are temporarily closed and will remain closed as part of the government’s effort to contain the virus,” it said.

The 14 shops represent 3.6% of JFC’s store network in China, and less than 1% of its worldwide network of 5,973 stores as of end-2019.

This makes JFC the second listed firm in the Philippines to announce suspension of operations in China, after Ayala-led Integrated Micro-Electronics, Inc. (IMI) announced its decision last week.

IMI has delayed the resumption of work to next week in its four manufacturing facilities in the provinces of Guangdong, Zhejiang, Sichuan and Jiangsu. These plants employ more than 5,900 people combined.

“The company is implementing guidelines to address and manage employees who manifest symptoms associated with the coronavirus. Business trips to and from high risk regions have been deferred,” it said.

Aside from JFC and IMI, several listed Filipino firms have footprint in China. SM Prime Holdings, Inc. has seven malls — in Xiamen, Jinjiang, Chengdu, Suzhou, Chongqing, Zibo and Tianjing. Robinsons Land Corp. has a residential project in Chengdu. International Container Terminal Services, Inc. operates a port in Shandong province. San Miguel Corp. has breweries in Guangdong and Baoding.

With the novel coronavirus epidemic, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said property companies and airlines are expected to feel the immediate impact.

“Some of them have malls operating in China, some of them are listed companies, so it’s not yet significant but it has a high single-digit contribution to the topline of those companies,” he said in a phone call last week.

As for JFC, it said its operations in China account for 6.5% of its total store network and 7.4% of its global systemwide sales. But it believes the Chinese government will be able to handle the issue, so it will continue with its plan to open more stores in the country this year.

“While it is too early to determine the total impact of the novel coronavirus on its business in China, JFC remains very committed to keep building and growing profitable business in China,” it said.

“It envisions to build at least 1,000 stores in (China) in the next few years and that China will provide a significant contribution to the profit of (JFC),” it added.

Philstocks Financial, Inc. Research Associate Claire T. Alviar thinks the closing of stores right now will not significantly affect JFC’s bottomline. But in any case, the coronavirus problem may result to lower consumer demand, and “may somehow weigh on the net income in the first quarter.”

Shares in JFC at the stock exchange lost P1 or 0.51% to P195 each on Tuesday.

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