Jollibee share price up after plan to boost Tim Ho Wan capital

By Mariedel Irish U. Catilogo, Researcher

INVESTORS bought shares of Jollibee Food Corp. (JFC) last week after the Philippine fast-food chain said it would boost its capital commitment in the Tim Ho Wan brand.

A total of 2.55 million shares worth P650.46 million were traded on Jan. 2 to 5, making Jollibee the eighth most active stock on the local bourse.  The share price rose by 2.6% week on week to close at P258 each on Friday.

Financial markets were closed on Jan. 1 in celebration of the New Year.

“We believe that the reason behind JFC’s activity this week was due to hopes that its growth will continue this year amid its international expansion,” Mikhail Philippe Q. Plopenio, research and engagement officer at Philstocks Financial, Inc. said in an e-mail.

Jollibee has said it would boost its capital commitment to Titan Dining LP, the private equity fund that owns the Tim Ho Wan brand and stores, to S$414 million ($313.2 million) to fund its expansion.

In a disclosure to the Philippine Stock Exchange, the Philippine fast-food giant also said the participating interest of unit Jollibee Worldwide Pte. Ltd. in Titan would rise to 92% from 90% through the purchase of a 2% interest in another limited partner in the fund for S$7.7 million.

Market players have started buying Jollibee shares amid slowing inflation, Manuel Antonio M. Castro, an equity analyst at Regina Capital Development Corp., said in a separate e-mail. “Jollibee’s international business still has a lot of room for growth and existing stores have been able to register strong year-on-year growth rates.

Philippine inflation eased to 3.9% in December, the slowest in 22 months.

Jollibee has two joint ventures with Titan for Tim Ho Wan in China and Tiong Bahru Bakery and Common Man Coffee Roasters in the Philippines. There are 78 Tim Ho Wan stores in Asia, nine of which are in the Philippines.

Mr. Plopenio said investors should be wary of Jollibee’s operational plans particularly in China, which faces economic challenges this year.

“JFC is currently operating globally with its presence scattered into different parts of the world,” he said. “Market players should be aware of the developments on where JFC’s operations are located. It could be economic indicators or geopolitical factors.”

Jollibee’s net attributable income went up by 13.6% to P2.43 billion in the third quarter from a year earlier. Revenue rose by 8.4% to P61.71 billion.

“For end-2023, we’re expecting the bottom line to finish in the mid-teens,” Mr.  Castro said.

Mr. Castro placed Jollibee’s support level at P250 and resistance at P262.

Mr. Plopenio pegged support and resistance levels at P252.80 and P263.20, respectively.