MANILA (UPDATE) - Jollibee Foods Corp (JFC) is buying the shares of its remaining partners in the private equity fund that owns the Michelin-starred restaurant chain Tim Ho Wan, the company disclosed on Monday.

JFC said Its wholly-owned subsidiary Jollibee Worldwide Pte Ltd (JWPL), which already owns an 85 percent participating interest in Titan Dining will pay 71.56 million Singaporean dollars ($53.25 million) to buy the remaining 15 percent interests of the other investors.

JWPL is a passive investor in Titan and does not run the fund nor the THW business, JFC clarified.

• Jollibee says to buy remaining shares in fund owning Tim Ho Wan brand

Titan is the private equity fund that ultimately owns the Tim Ho Wan brand and restaurant chain, which operates 53 outlets in Asia, mostly franchised stores including 7 in the Philippines. The restaurant has six branches in Hong Kong and 47 across the rest of Asia, including 12 each in Singapore and Taiwan. It is also present in South Korea, Japan, Macau, Thailand, Cambodia and Vietnam.

Tim Ho Wan is famous for its sweet and savory baked barbecue pork buns and other dim sum and dumplings.

The restaurant was started in 2009 as a 20-seater in Mong Kok, Hong Kong by chef Mak Kwai-pui, who used to helm the three-Michelin-starred Lung King Heen at the Four Seasons Hotel, and chef Leung Fai-keung. Tim Ho Wan restaurant earned its Michelin star a year later.

"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," said a company spokesman quoted by the South China Morning Post.

China is JFC's second-largest market after the Philippines. And with the Philippine market still hobbled by lockdowns to contain the spread of the coronavirus pandemic, China is playing an important role in generating revenue for the company.

Its China operations tempered losses last year as it was the only market where all of its stores had reopened as of end of 2020. JFC swung to a loss of P11.5 billion ($230 million) last year from a net income of P7.3 billion in 2019, according to information available with the Philippine stock exchange.

In the first half of 2021, JFC posted net income of P1.1 billion reversing a loss of P11.9 billion in the same period a year ago.

In the April to June period, same-store sales growth in China matched that of the Philippines, at 48 percent, and were the highest among JFC's overseas markets, according to its filing with the Philippine bourse.

In the first half of this year, JFC had a network of 17 brands across 33 countries with 5,816 outlets. Of these, 3,192 stores were in the Philippines, while 407 stores - of brands that include Yonghe King, Hong Zhuang Yuan and Dunkin' Donuts - were in China.

"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," said Dionil Jamil, head of equity research at Philippines-based ATR Asset Management.

"JFC acknowledges the importance of its foreign market - with majority of its store expansion in 2021 being geared towards foreign stores."

JFC opened its first Tim Ho Wan restaurant in Shanghai in September last year and has opened two more since. The plan is to "open 100 stores across China over the next four years", the JFC spokesman said.

Tim Ho Wan is part of JFC's plans outside China as well. "(Tim Ho Wan's) priority in Asia, aside from expansion in China, is to expand the store network in (its existing) markets," the JFC spokesman said.

"The current number of stores is small relative to the size of the consumer market it benchmarked, with Singapore and Taiwan, which each have 12 stores and a population of 5.9 million and 23.9 million, respectively. The number of stores to be opened will be re-estimated as part of the brand's long-term planning."

JFC is one of Asia’s largest food service companies with a worldwide network of 5,816 stores with 17 brands operating in 33 countries.

- With a report from the South China Morning Post

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