The share price of fast-food giant Jollibee Foods Corp. (JFC) surged 10.72 percent Thursday after the company scrapped its foreign ownership cap.
JFC’s stock closed P262.40 Thursday, adding P25.40 from the previous day’s P237.00
JFC said it is easing its foreign ownership limit, a move that will enable it to attract more foreign investors.
JFC said in a disclosure to the stock exchange its board approved the removal of the 40-percent foreign ownership limit.
The company sought to amend its incorporation papers, particularly the removal of the corporation’s ability to own, acquire, mortgage, pledge or encumber land.
The Philippine Constitution allows up to 40-percent foreign ownership of private land.
Analysts said the easing of its foreign ownership limit would enable JFC to attract more foreign investors.
JFC said in May 2024 it obtained shareholders’ approval to remove from its primary purpose the ability of the corporation to directly own real properties.
It, however, retained the company’s ability to invest in companies that own real properties including land within the limits allowed by applicable laws.
Unicapital equity research analyst Jeri Alfonso said the removal of foreign ownership limit is a good catalyst for the company.
“Given this current market condition, this will provide a big boost to the company in terms of trading volume,” Alfonso said.
Alfonso said Unicapital is also very bullish on JFC as domestic consumption is expected to improve amid easing inflation rate.
She also expects the company’s international expansion to support its future growth.
She said JFC is on track to achieve its target 50/50 revenue mix between foreign and domestic stores as the fast-food chain continuous to expand it store network both here and abroad.
“JFC has one of the highest P/E [price-to-earnings] ratios, but we think that is justified because it has the highest EPS (earnings per share) growth among the consumer companies,” Alfonso said.
The Jollibee Group’s store network reached to 9,598 as of end September 2024, of which 3,340 are in the Philippines and 6,258 are overseas.
JFC acquired majority control of South Korea’s Compose Coffee for $340 million in 2024 to bolster the company’s coffee and tea business.