Investors weigh Jollibee earnings, Yoshinoya deal

February 23, 2021

By Lourdes O. Pilar, Researcher

INVESTORS took notice of Jollibee Food Corp.’s net profit in the final three months of 2020, but remained lukewarm on its joint venture to operate and expand the local unit of Japanese beef bowl restaurant Yoshinoya.

Data from the Philippine Stock Exchange showed a total of 4.69 million Jollibee shares worth P842.87 million were traded from Feb. 15 to 19, making it the 17th most actively traded stock last week.

The share price of the homegrown fastfood giant closed at P179.90 apiece on Friday, up by 0.7% from a week ago. Year to date, the stock lost 7.5%.

“Jollibee was among the active stocks [last] week after it turned around to a positive earnings in the fourth quarter last year despite challenges,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.

“Also, its plan of expansion in the International Markets at more than P12 billion plus a partnership with a well-known Japanese food company, Yoshinoya, as catalyst for growth going forward,” Mr. Pangan added.

Smashburger and The Coffee Bean & Tea Leaf, which have been a drag to its income, are expected to contribute to its growth this year, he said.

Philippine National Bank Senior Equity Research Analyst Jonathan J. Latuja said Jollibee’s activity last week was driven by earnings results disclosed last Monday.

However, he said that the Yoshinoya joint venture announcement did not have a “meaningful impact” on Jollibee’s share price, which ended 0.3% lower on Tuesday.

Jollibee’s fourth-quarter attributable net income declined by more than a third to P2.05 billion year on year, but reversing three consecutive quarters of net losses caused by the pandemic.

For the full year, Jollibee swung to an attributable net loss of P11.50 billion last year from P7.30 billion in net income in 2019.

In a separate disclosure last week, the fastfood giant said that it would enter into a 50/50 joint venture with Yoshinoya International Philippines, Inc. to operate and expand the Japanese restaurant chain in the country.

Jollibee disclosed to the exchange that the two would establish a 50/50 joint venture, which will be the Philippine franchisee of Yoshinoya.

To add to the three operating Yoshinoya stores in the country, the venture plans to put up an additional 50 stores in the long term.

“Its joint venture with Yoshinoya will further boost its bottom line as it will complement the delivery especially needed in this pandemic situation,” Mr. Pangan said.

With more than 2,000 stores worldwide, Yoshinoya is the latest addition to Jollibee’s quick service restaurant chains, which include Greenwich, Chowking, Red Ribbon, and Mang Inasal as well as global franchise brands such as Burger King, PHO 24, Panda Express, Smashburger, The Coffee Bean & Tea Leaf.

As of end-2020, Jollibee’s store count reached 5,824, of which 3,217 are in the Philippines and 2,607 abroad.

“With the move to further ease in restriction plus rollout of vaccines, we can expect Jollibee to weather the challenges going forward, especially after a turnaround performance in the fourth quarter last year despite the challenges brought about by the pandemic,” Mr. Pangan said.

For this week, he placed the stock support at P175.60 while resistance at P202.00.

Mr. Latuja gave Jollibee’s 12-month discounted cash flow-based target price at P188.80 per share.

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