Bloomberg News: Fried Chicken King of Asia Loses $2.9 Billion on U.S. Gamble
If 2019 was a bad year for Tony Tan Caktiong, the Philippine tycoon who built a fast-food empire that trounced McDonald?s in his home market, 2020 is shaping out to be worse for his company?s stock.
After wooing millions of Filipinos for decades with its signature fried chicken, Tan?s Jollibee Foods Corp. set out on an expansion in the U.S., spending $540 million buying Smashburger and Coffee Bean & Tea Leaf Co. Even as the two money-losing chains turn out to be a drag on earnings, the coronavirus outbreak is now threatening to hit its sales.
Fueled by concerns the spread of the disease will weigh on consumer spending, Jollibee shares have dived almost 25% this year, close to matching a 26% slump in 2019, their worst in two decades. Including Monday?s sell-off that sank Philippine stocks into bear territory, almost $2.90 billion was wiped off the company?s market value since the end of 2018. Jollibee fell 8.1% as of 11:50 a.m. in Manila trading on Monday, tracking the Philippine stock index?s 5.8% decline.
Long a bellwether for the Philippine consumer growth story, the headwinds have come as a reality check for Tan -- a son of poor Chinese immigrants -- who chased rapid growth abroad with acquisitions. Although that strategy helped widen the group?s footprint to almost 6,000 stores in 35 countries, investors have remained unimpressed by the pay-off as Smashburger and Coffee Bean continue to burn cash.
But right now, Jollibee is among the least-loved Philippine stocks. On a scale of 5, which represents unanimous buy, the average consensus analyst rating on the stock fell to 2.67 this year, the most bearish since May 2013. Jollibee?s rating hit 4.2 in 2018, a 14-year high.
https://www.bloomberg.com/news/arti...cken-king-takes-2-billion-hit-with-u-s-gamble
If 2019 was a bad year for Tony Tan Caktiong, the Philippine tycoon who built a fast-food empire that trounced McDonald?s in his home market, 2020 is shaping out to be worse for his company?s stock.
After wooing millions of Filipinos for decades with its signature fried chicken, Tan?s Jollibee Foods Corp. set out on an expansion in the U.S., spending $540 million buying Smashburger and Coffee Bean & Tea Leaf Co. Even as the two money-losing chains turn out to be a drag on earnings, the coronavirus outbreak is now threatening to hit its sales.
Fueled by concerns the spread of the disease will weigh on consumer spending, Jollibee shares have dived almost 25% this year, close to matching a 26% slump in 2019, their worst in two decades. Including Monday?s sell-off that sank Philippine stocks into bear territory, almost $2.90 billion was wiped off the company?s market value since the end of 2018. Jollibee fell 8.1% as of 11:50 a.m. in Manila trading on Monday, tracking the Philippine stock index?s 5.8% decline.
Long a bellwether for the Philippine consumer growth story, the headwinds have come as a reality check for Tan -- a son of poor Chinese immigrants -- who chased rapid growth abroad with acquisitions. Although that strategy helped widen the group?s footprint to almost 6,000 stores in 35 countries, investors have remained unimpressed by the pay-off as Smashburger and Coffee Bean continue to burn cash.
But right now, Jollibee is among the least-loved Philippine stocks. On a scale of 5, which represents unanimous buy, the average consensus analyst rating on the stock fell to 2.67 this year, the most bearish since May 2013. Jollibee?s rating hit 4.2 in 2018, a 14-year high.
https://www.bloomberg.com/news/arti...cken-king-takes-2-billion-hit-with-u-s-gamble
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