Yum China Holdings (YUMC)
NYSE:YUMC
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Yum China Holdings
(NYSE:YUMC)
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Rating:75Outperform
Price Target:
$56.00
â–²(11.64% Upside)
Action:ReiteratedDate:02/05/26
The score is driven primarily by solid financial performance (especially strong and improving free cash flow) and a constructive, confident earnings outlook with significant shareholder returns. Technicals are supportive but show near-overbought conditions, while valuation appears only moderate rather than clearly cheap.
Positive Factors
Free Cash Flow Strength
Sustained, materially higher free cash flow provides durable flexibility for expansion, franchising support, dividends and buybacks. Strong cash conversion reduces reliance on external financing, enabling capital returns and reinvestment while cushioning against cyclical weakness over the next several quarters.
Negative Factors
Rising Delivery Mix & Rider Costs
A structural shift to higher delivery share increases variable fulfillment costs and compresses restaurant margins over time. Unless offset by pricing, packaging optimization or tech-driven efficiency, persistent delivery growth can erode unit economics and force trade-offs between traffic and profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Strength
Sustained, materially higher free cash flow provides durable flexibility for expansion, franchising support, dividends and buybacks. Strong cash conversion reduces reliance on external financing, enabling capital returns and reinvestment while cushioning against cyclical weakness over the next several quarters.
Read all positive factors
Yum China Holdings (YUMC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.34B
Dividend Yield1.98%
Average Volume (3M)1.67M
Price to Earnings (P/E)18.4
Beta (1Y)0.50
Revenue Growth3.29%
EPS Growth6.72%
CountryUS
Employees140,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.40
Shares Outstanding351,197,200
10 Day Avg. Volume1,118,088
30 Day Avg. Volume1,672,006
Financial Highlights & Ratios
PEG Ratio2.41
Price to Book (P/B)3.19
Price to Sales (P/S)1.45
P/FCF Ratio20.40
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue1.60
Enterprise Value/Gross Profit9.26
Enterprise Value/Ebitda10.61
Forecast
1Y Price Target
$61.72Price Target Upside23.05% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
EPS Forecast (FY)2.89
Revenue Forecast (FY)$12.58B
Yum China Holdings Business Overview & Revenue Model
Company Description
Yum China Holdings, Inc. owns, operates, and franchises restaurants in China. The company operates through two segments, KFC and Pizza Hut. It operates restaurants under the KFC, Pizza Hut, Little Sheep, Huang Ji Huang, Lavazza, COFFii & JOY, Taco...
How the Company Makes Money
Yum China primarily makes money by selling food and beverages through company-owned restaurants, which generate revenue at the point of sale across dine-in, delivery, and takeout/online ordering channels. A second major revenue stream comes from f...
Yum China Holdings Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call presents a predominantly positive picture: strong sequential momentum in Q4, meaningful margin expansion (OP margin at 10.9% for the year), robust operating profit and EPS growth, aggressive store expansion, successful product and module rollouts (K Coffee, K Pro, Pizza Hut thin-crust), and substantial cash returns to shareholders. Key near-term risks center on a rising delivery mix and related rider/labor costs, tougher Q1 comps and a smaller commodity tailwind, plus a modest full-year same-store sales improvement. Overall, management expects to sustain margin and sales momentum and has committed sizable capital returns and growth targets for 2026, indicating confidence in execution.Positive Updates
Aggressive Net New Store Expansion
Opened more than 1,700 net new stores in 2025, taking the total to over 18,000 stores across more than 2,500 cities; guidance to exceed 20,000 stores in 2026 (>1,900 net new stores) and a target of 30,000 stores by 2030.
Negative Updates
Rising Delivery Mix and Rider Costs
Delivery mix increased materially over the year (management highlighted an increase from ~42% in Q1 to ~53% in Q4) and is expected to grow further in 2026; cost of labor rose 120 basis points to 29.4% in Q4, with rider costs cited as the biggest headwind.
Read all updates
Q4-2025 Updates
Positive
Negative
Aggressive Net New Store Expansion
Opened more than 1,700 net new stores in 2025, taking the total to over 18,000 stores across more than 2,500 cities; guidance to exceed 20,000 stores in 2026 (>1,900 net new stores) and a target of 30,000 stores by 2030.
Read all positive updates
Company Guidance
Yum China guided 2026 toward accelerated expansion and steady margin improvement: it expects to exceed 20,000 stores by opening more than 1,900 net new locations with a 40–50% franchise mix, target total CapEx of $600–$700M (supported by lower per‑store CapEx such as Gemini pairs at ¥0.7–0.8M and Pizza Hut Wow standalone at ¥0.65–0.85M), and to deliver on its Investor Day framework — sales index 100–102, mid‑ to high‑single‑digit system sales growth, high‑single‑digit operating profit growth, double‑digit EPS growth and a slight improvement in restaurant margin and OP margin. Management also reiterated $1.5B of shareholder returns for 2026 (continuing $1.5B/year through 2024–2026), raised the quarterly dividend 21% to $0.29 (implying >45% payout of 2025 diluted EPS and ~ $400M annual dividends) and initiated a $460M buyback; starting 2027 it plans to return ~100% of annual free cash flow to shareholders, implying average annual returns of $900M–$1B+ in 2027–28 and >$1B thereafter. Near term, the company expects further delivery‑mix growth, aims to deliver a fourth consecutive quarter of positive same‑store sales growth and a thirteenth consecutive quarter of positive same‑store transaction growth in Q1, and expects Q1 margins to be roughly in line with the prior year.Yum China Holdings Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
72
Positive
Cash Flow
82
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 11.80B | 11.30B | 10.98B | 9.57B | 9.85B |
| Gross Profit | 2.04B | 1.89B | 1.89B | 1.43B | 1.41B |
| EBITDA | 1.82B | 1.68B | 1.59B | 1.26B | 1.25B |
| Net Income | 929.00M | 911.00M | 827.00M | 442.00M | 990.00M |
Balance Sheet | |||||
| Total Assets | 10.78B | 11.12B | 12.03B | 11.83B | 13.22B |
| Cash, Cash Equivalents and Short-Term Investments | 1.38B | 1.84B | 2.60B | 3.15B | 4.00B |
| Total Debt | 2.35B | 2.41B | 2.54B | 2.40B | 2.83B |
| Total Liabilities | 4.68B | 4.69B | 4.91B | 4.67B | 5.30B |
| Stockholders Equity | 5.38B | 5.73B | 6.41B | 6.48B | 7.06B |
Cash Flow | |||||
| Free Cash Flow | 840.00M | 714.00M | 763.00M | 734.00M | 442.00M |
| Operating Cash Flow | 1.47B | 1.42B | 1.47B | 1.41B | 1.13B |
| Investing Cash Flow | -5.00M | -178.00M | -743.00M | -522.00M | -855.00M |
| Financing Cash Flow | -1.69B | -1.64B | -716.00M | -844.00M | -313.00M |
Yum China Holdings Technical Analysis
Negative
50.16
Price Trends
52.47
Negative
50.17
Negative
47.31
Positive
Market Momentum
-0.84
Negative
38.53
Neutral
51.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YUMC, the sentiment is Negative. The current price of 50.16 is above the 20-day moving average (MA) of 49.92, below the 50-day MA of 52.47, and above the 200-day MA of 47.31, indicating a neutral trend. The MACD of -0.84 indicates Negative momentum. The RSI at 38.53 is Neutral, neither overbought nor oversold. The STOCH value of 51.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for YUMC.
Yum China Holdings Risk Analysis
Yum China Holdings disclosed 78 risk factors in its most recent earnings report. Yum China Holdings reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Yum China Holdings Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $17.34B | 18.45 | 16.41% | 1.98% | 3.29% | 6.72% | |
75 Outperform | $217.57B | 25.46 | -336.89% | 2.31% | 1.26% | 2.87% | |
71 Outperform | $22.87B | 20.24 | 50.71% | 3.06% | 8.61% | 9.39% | |
67 Neutral | $12.38B | 23.81 | -15.28% | 1.63% | 3.92% | 4.98% | |
65 Neutral | $44.77B | 26.98 | -20.57% | 1.84% | 11.60% | -4.33% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
48 Neutral | $1.21B | 42.31 | -6.99% | 4.72% | -0.64% | -60.71% |
* Consumer Cyclical Sector Average
YUMC
Yum China Holdings
48.54
8.05
19.88%
DRI
Darden Restaurants
196.66
2.39
1.23%
DPZ
Domino's Pizza
369.00
-89.96
-19.60%
MCD
McDonald's
306.96
2.70
0.89%
PZZA
Papa John's International
36.90
7.13
23.97%
YUM
Yum! Brands
159.52
18.92
13.45%
Yum China Holdings Corporate Events
Financial DisclosuresRegulatory Filings and Compliance
Yum China Releases 2025 Annual Report to Investors
Neutral
Apr 8, 2026
On April 8, 2026, Yum China Holdings, Inc. announced that it had issued its annual report for the financial year ended December 31, 2025, in accordance with the listing rules of The Stock Exchange of Hong Kong Limited. The publication of this repo...
Financial DisclosuresRegulatory Filings and Compliance
Yum China Releases 2025 Annual Results and Disclosure
Neutral
Mar 2, 2026
Yum China Holdings, Inc. announced its annual results for the year ended December 31, 2025, in an announcement dated February 27, 2026, issued to comply with listing rules of the Hong Kong Stock Exchange. The full financial disclosure for the 2025...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.