LISTED SM Investments Corp. and Jollibee Foods Corp. remain upbeat about their China units’ growth prospects, with officials yesterday outlining aggressive expansion plans.

“We expect we will continue to expand, so we have decided to accelerate the expansion of our malls,” said Jose T. Sio, SM Investments executive vice-president and chief finance officer (CFO), during the CFO Forum sponsored by ING Bank N.V. (Philippines), the Foreign Correspondents Association of the Philippines and Financial Executives Institute of the Philippines.

A plan to build a mall in China each year has been changed to two malls per year after 2014, he said.

Mr. Sio pointed out SM’s four China malls’ contribution to SM Prime Holdings, Inc.’s bottom line had risen to almost 15% in the first half from 5% three years ago. “And this will continue to grow,” he added.  

SM Prime is SM Investments’ mall unit. 

Mr. Sio said SM will consider a listing in China or in Singapore either through initial public offering or real estate investment trust upon the completion of 10 malls in China, to raise more funds for expansion there.

At the same forum, Ysmael V. Baysa, Jollibee CFO, said: “Our China business is growing by around 30% in revenue per year, and we will be able to maintain this. It presently accounts for 11% of our worldwide sales.”

Jollibee operates three brands — Yonghe King, Hong Zhuang Yuan and San Pin Wang — and a 368-store network in China.

It has earmarked P5.8 billion for expansion this year, a portion of which will be used to fund the construction of more 100 stores in China.

SM Prime has programmed a P21-billion capital expenditure for 2012 — P14 billion for the Philippines and P7 billion for China — to be sourced from a mix of debt and internally generated funds.

SM Prime aims to end the year with a mall portfolio of 46 Philippine malls and five China malls, which will have a combined estimated gross floor area of 6.3 million square meters.

The two officials said the Philippines and China’s spat over the Scarborough Shoal has not dampened their enthusiasm for growing their China businesses.

“Whatever is happening in Scarborough Shoal, we don’t feel it affecting our business in China,” Mr. Sio said.

“I believe that whatever is going on [in Scarborough Shoal] will be resolved in a very positive and constructive way…” said Mr. Baysa.

Jollibee registered a 21.2% increase in its first-semester net income to P1.59 billion, boosted by improved customer volume and cost improvements.

SM Investments saw a 13.07% rise in its first-half net income to P10.90 billion, with total revenues climbing by 14% to P105.20 billion as all core businesses met their respective revenue targets.

SM Investments shares fell by 0.42% to P706 versus P709 the day before while those of SM Prime were traded unchanged yesterday at P13.80 each. 

Jollibee shares dipped by 0.76% to P97.50 yesterday from their previous close at P98.25. — F. J. G. de la Fuente