Fried chicken king Jollibee chases McDonald’s with US, China hunt

MANILA/SINGAPORE — Jollibee Foods Corp., the fast food chain that controls more than half of the Philippines’ $4-billion market with its signature fried chicken, is looking for acquisitions to accelerate ambitious expansion plans in the US and China.

The targets could be other fast food chains as well as fast-casual restaurants like Smashburger, the US franchise in which Jollibee owns 40%, President Ernesto Tanmantiong said in an interview.

“We are looking at the world arena,” he said. “The acquisition of new businesses is part of our growth strategy and, over the last few years, we have been entertaining opportunities.”

Pasig City- based Jollibee is on track to meet its goal of doubling profit in the five years through 2019, and Mr. Tanmantiong now wants it to be one of the five biggest restaurant chains by market capitalization globally. Its current market value is $ 5.2 billion.

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The stock rose 1% in Manila trading Friday for its highest close in two weeks. The company’s shares have risen 27% this year, outperforming the Philippine Stock Exchange Index.

Jollibee, which had about P14 billion ($272 million) in cash and equivalents as of June 30, operates more than 3,500 stores globally, according to its second-quarter earnings statement. Its best-selling item is called Chickenjoy.

Three-quarters of those outlets are in the Philippines, where the company is capitalizing on an economy that’s grown by at least 6% for nine straight quarters. The World Bank projects that streak to continue through 2019 as consumer spending increases and the population grows at a faster rate than the global average.

“Jollibee is well-positioned for growth given its diversified portfolio,” said Noel Reyes, who helps manage $1 billion as chief investment officer at Security Bank Corp. “Its Philippine operations will gain from increased consumer purchasing power while its overseas expansion has huge opportunities. It’s not just a chicken-and-burger stock anymore.”

Retailers, restaurant operators among biggest gainers from President Rodrigo R. Duterte’s plan to cut personal income tax. —