OUTLIER Foreign investors’ appetite for Jollibee remains strong

FOREIGNERS loaded up on Jollibee Foods Corp. shares, making it one of the most actively traded stocks in the local bourse last week.

Data from the Philippine Stock Exchange showed the homegrown food giant trading P1.521 billion worth of 4.78 million shares from Jan. 7-11.

Shares closed at P316.60 apiece on Friday, up P2.60 or 0.8% from the previous day. On a week-onweek basis, its share price was up by 2.5% from its closing price of P309 on Jan. 4.

“It can be attributed to the influx of net foreign buying into the stock which amounted to P212.167 million [as of Thursday] after establishing a new all-time high at P324.20 [per share],” said Unicapital Securities, Inc. (Unicap) certified securities representative Cristopher Adrian T. San Pedro.

For his part, Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan noted that net foreign buying transactions for Jollibee “has been heavy since the start of 2019.”

“Investors also [priced] in the recent acquisition of Smashburger and steady and above expectation earnings...,” Mr. Tan added.

Stock market data showed net buying on Jollibee amounted to P223.33 million from Jan. 7 to Jan. 11.

In a disclosure dated Dec. 14, Jollibee said that it has taken full ownership of American burger chain Smashburger after its wholly-owned subsidiary, Bee Good!, Inc. purchased Smashburger Master LLC’s 15% stake in SJBF LLC.

On the other hand, the company’s net income attributable to the equity holders of the parent company rose 25.9% to P2.035 billion in the third quarter, its disclosure to the local bourse showed. For the first nine months, Jollibee saw its net income grow by 19.2% to P6.086 billion.

“We expect [Jollibee] to net P8 billion in 2018 and P8.9 billion in 2019 to be spurred by the upcoming mid-term elections in May 2019 supported by declining global oil prices and tamed inflation rate,” Unicapital’s Mr. San Pedro said.

For his part, Philstocks’ Mr. Tan expects the company’s full-year net income to reach P8.08 billion and P9.04 billion in 2018 and 2019, respectively.

Mr. Tan noted Jollibee’s expansion in different parts of the world as its “main driver for earnings.”

In a Jan. 9 disclosure, DoubleDragon Properties Corp. said its industrial leasing unit, CentralHub Industrial Centers, Inc., has formed a strategic partnership with Cargill Joy Poultry Meats Production, Inc. (C-Joy) — a joint venture of US-based Cargill and Jollibee — for the expansion of its industrial leasing facilities.

Asked about the effect of this development on the stock’s performance last week, Mr. San Pedro said: “The investors sold on the news because it already made a run from P292.00 to P324.20 pesos [last] week.”

Philstocks’ Mr. Tan was also of the same opinion: “We think also that this is not as significant news in relation to the recent share price movement of [Jollibee].”

“[T]here may be some upside, but I look more on the acquisition of Smashburger and continuous expansion most especially outside the Philippines and maintaining high margins despite higher inflation in 2018.”

Unicapital’s Mr. San Pedro sees the stock trading between P300 support and P324.20 resistance in the short term.

For Philstocks’ Mr. Tan: “Support may range from P290.80-P300.10 and resistance of P320.00P324.00.”