Commentary: Jollibee shouldn’t rush its global IPO

Jollibee, the fast-food giant from the Philippines, has successfully expanded into a global restaurant empire, but it should not rush to spin off its international operations and go public, according to Juliana Liu's commentary for Bloomberg Opinion. While separating the international business from the domestic operations could provide investors with clearer choices between the reliable cash flow of the Philippine enterprise and the higher growth potential of the international portfolio, Jollibee should take more time before doing so.

The Manila-listed food and beverage group has effectively become two businesses: a mature domestic operation and a rapidly growing international collection of restaurant and coffee brands, including Smashburger, Tim Ho Wan, and Yonghe King. Despite healthy growth in operating income, the international businesses have collectively lost money, with the Smashburger franchise in the US struggling and China experiencing weak retail spending.

Since announcing its New York listing in January, Jollibee has been working on establishing an independent governance, financing, and organizational structure for its international business, with CFO Richard Shin set to lead it full-time upon separation. However, giving the international operation at least one more year to improve would allow investors to better evaluate its standalone financial performance and determine which brands require investment, restructuring, or even exit.