Filipino food corporation Jollibee has finally acquired Hong Kong-based restaurant chain Tim Ho Wan and is aiming to expand its operations in China.
Through its wholly-owned subsidiary Jollibee Worldwide Pte. Ltd. (JWPL), Jollibee Food Corporation (JFC) completely bought out the remaining investors of the Michelin-starred food chain in August.
JFC paid a total of P2.65 billion to Titan Dining LP for the 15 percent remaining interest it holds over the company.
According to JFC, the expansion of Tim Ho Wan’s operations in China will be conducted through the help of the Tim Ho Wan Group, with whom they signed a venture agreement.
“The Jollibee Group aims to build, as an important part of its portfolio, a significant business serving Chinese cuisine in different parts of the world. In line with plans to further expand operations in China, JFC entered into a joint venture agreement with the Tim Ho Wan Group to open and operate Tim Ho Wan restaurants in the mainland,” JFC said in a statement.
In 2020, JFC posted a net loss of Php 11.5 billion due to the pandemic. And through the acquisition and expansion of Tim Ho Wan’s operations in China, they aim to reverse this.
According to Head of Equity Research at Philippines-based ATR Asset Management Dionil Jamil, Jollibee’s expansion in the region will help them recover from the pandemic as the local market is still in a state of depression.
“China is JFC’s second-largest revenue contributor in the company’s foreign store portfolio. With this in mind, we can see that the overseas market is a key factor in JFC’s growth story – especially in the near-term as domestic demand for JFC is still depressed due to quarantine restrictions impeding mobility,” Jamil told South China Morning Post.
“JFC acknowledges the importance of its foreign market – with majority of its store expansion in 2021 being geared towards foreign stores.”
After the Philippines, China is JFC’s second-largest market.
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Image credit: Jollibee’s and Tim Ho Wan’s Official Websites