Yum China Holdings (YUMC)
NYSE:YUMC
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Yum China Holdings (YUMC) AI Stock Analysis

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YUMC

Yum China Holdings

(NYSE:YUMC)

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Outperform 74 (OpenAI - 4o)
Rating:74Outperform
Price Target:
$49.00
▲(5.92% Upside)
Yum China Holdings demonstrates strong financial performance and positive earnings call sentiment, which are the most significant factors driving the score. The technical analysis suggests short-term bullish momentum, but longer-term caution. The valuation is fair, with a reasonable P/E ratio and modest dividend yield. Overall, the company is well-positioned in the competitive restaurant industry, with robust growth and strategic initiatives.
Positive Factors
Store Expansion
Yum China's aggressive store expansion strategy enhances its market presence and long-term growth potential, aiming for 20,000 stores by 2026.
Revenue Growth
Consistent revenue growth reflects effective business strategies and strong demand, supporting long-term financial stability and market leadership.
Cash Flow Generation
Strong cash flow generation supports operational and strategic initiatives, providing financial flexibility and resilience against market fluctuations.
Negative Factors
Delivery Cost Challenges
Rising delivery costs could pressure margins, challenging profitability as delivery becomes a larger part of the business model.
Impact of Meituan Investment
The negative impact from Meituan investment highlights potential risks in strategic partnerships, affecting financial performance and investor confidence.
Decreasing Ticket Averages
Falling ticket averages indicate potential challenges in maintaining customer spending levels, which could impact revenue and profitability.

Yum China Holdings (YUMC) vs. SPDR S&P 500 ETF (SPY)

Yum China Holdings Business Overview & Revenue Model

Company DescriptionYum China Holdings, Inc. is a leading restaurant company operating in China, primarily known for its extensive portfolio of popular brands including KFC, Pizza Hut, Taco Bell, and Lavazza. The company focuses on the quick-service and casual dining sectors, providing a diverse range of food and beverage options tailored to local tastes. With a significant presence across various cities in China, Yum China is dedicated to innovation, quality, and customer service in the rapidly evolving food service industry.
How the Company Makes MoneyYum China generates revenue primarily through the operation of its company-owned restaurants and the franchising of its brands. The main revenue streams include sales from food and beverages, franchise fees from franchisees, and royalties from franchised restaurants. The company also benefits from its strategic partnerships with suppliers and delivery services, enhancing its operational efficiency and customer reach. Additionally, Yum China invests in digital platforms and technology to streamline ordering and delivery processes, further driving sales and customer engagement. Seasonal menu offerings and promotional campaigns also contribute to revenue growth by attracting new customers and encouraging repeat visits.

Yum China Holdings Earnings Call Summary

Earnings Call Date:Nov 04, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Feb 10, 2026
Earnings Call Sentiment Neutral
The earnings call reflected a robust performance with record store openings, strong operating profit growth, and successful product innovations. However, the company faced challenges with increased delivery costs and the impact of its Meituan investment. The overall sentiment is balanced with significant achievements and some operational challenges.
Q3-2025 Updates
Positive Updates
Record Store Openings
Accelerated store openings with 536 net new stores in Q3, bringing the total store count to over 17,500, on track to reach 20,000 by the end of 2026.
Strong Operating Profit Growth
Operating profit increased by 8% year-over-year to $400 million, setting a Q3 record for adjusted operating profit.
Pizza Hut and KFC Performance
KFC saw a 2% same-store sales growth and Pizza Hut achieved a 17% same-store transaction growth for three consecutive quarters.
Innovative Product Launches
Introduction of new products such as KFC's Crackling Golden Chicken Wings and Pizza Hut's hand-crafted thin-crust pizza, both showing strong sales growth.
Expansion in Delivery Sales
Delivery sales accounted for 51% of total sales, up from 40% in the same quarter last year.
Negative Updates
Challenges with Delivery Costs
Higher delivery mix led to increased rider costs, impacting cost of labor by 110 basis points year-over-year.
Impact of Meituan Investment
Investment in Meituan had a negative impact of $8 million in Q3, compared to a positive impact of $26 million in the same quarter last year.
Lower Ticket Averages
KFC's ticket average decreased by 1% and Pizza Hut's ticket average fell by 13% year-over-year.
Company Guidance
During the Yum China Third Quarter 2025 Earnings Conference Call, the company reported strong performance metrics, including a 4% year-over-year increase in system sales and a 2% growth in same-store sales for KFC. Restaurant margins expanded to 17.3%, contributing to an 8% rise in operating profit, reaching a record $400 million for the quarter. Yum China accelerated store openings, adding 536 net new stores, bringing the total to over 17,500, with a target of 20,000 stores by the end of 2026. KFC achieved a 5% system sales growth and Pizza Hut surpassed the 4,000 store milestone with a 4% system sales growth. Delivery sales increased to 51% of total sales, up from 40% the previous year. The company is on track to meet its 2025 targets of mid-single-digit system sales growth and moderately improved margins.

Yum China Holdings Financial Statement Overview

Summary
Yum China Holdings presents a strong financial profile with impressive revenue growth and profitability metrics. The balance sheet is robust with low leverage, and cash flow generation is healthy, supporting operational and strategic initiatives. While there are minor pressures on operational efficiency, the overall financial health of the company is commendable, positioning it well in the competitive restaurant industry.
Income Statement
82
Very Positive
Yum China Holdings shows strong revenue growth with a TTM revenue increase of 18.1% compared to the previous period. The gross profit margin is stable at 12.1%, and the net profit margin is healthy at 7.8%. However, the EBIT margin has decreased slightly to 7.7%, indicating some pressure on operational efficiency. Overall, the company demonstrates robust growth and profitability in the competitive restaurant industry.
Balance Sheet
75
Positive
The company's balance sheet is solid with a debt-to-equity ratio of 0.32, indicating a conservative leverage approach. Return on equity is strong at 15.7%, reflecting efficient use of equity capital. The equity ratio stands at 51.6%, showing a balanced capital structure. While the debt level is manageable, continuous monitoring is advisable to maintain financial stability.
Cash Flow
78
Positive
Yum China Holdings exhibits a positive cash flow trajectory with a 13.6% growth in free cash flow. The operating cash flow to net income ratio is 0.63, indicating good cash generation relative to net income. The free cash flow to net income ratio of 0.58 suggests effective cash management. The company is well-positioned to support its operations and growth initiatives through strong cash flow generation.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue11.57B11.30B10.98B9.57B9.85B8.26B
Gross Profit1.99B1.89B1.89B1.43B1.41B1.27B
EBITDA1.76B1.68B1.59B1.26B1.25B1.16B
Net Income904.00M911.00M827.00M442.00M990.00M784.00M
Balance Sheet
Total Assets11.03B11.12B12.03B11.83B13.22B10.88B
Cash, Cash Equivalents and Short-Term Investments2.12B1.84B2.60B3.15B4.00B4.26B
Total Debt2.27B2.41B2.54B2.40B2.83B2.39B
Total Liabilities4.65B4.69B4.91B4.67B5.30B4.40B
Stockholders Equity5.69B5.73B6.41B6.48B7.06B6.21B
Cash Flow
Free Cash Flow947.74M714.00M763.00M734.00M442.00M695.00M
Operating Cash Flow1.52B1.42B1.47B1.41B1.13B1.11B
Investing Cash Flow-476.03M-178.00M-743.00M-522.00M-855.00M-3.11B
Financing Cash Flow-1.58B-1.64B-716.00M-844.00M-313.00M2.06B

Yum China Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price46.26
Price Trends
50DMA
43.85
Positive
100DMA
44.80
Positive
200DMA
45.49
Positive
Market Momentum
MACD
0.37
Negative
RSI
62.77
Neutral
STOCH
83.00
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YUMC, the sentiment is Positive. The current price of 46.26 is above the 20-day moving average (MA) of 44.38, above the 50-day MA of 43.85, and above the 200-day MA of 45.49, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 62.77 is Neutral, neither overbought nor oversold. The STOCH value of 83.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for YUMC.

Yum China Holdings Risk Analysis

Yum China Holdings disclosed 79 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$16.72B19.1715.44%1.96%3.29%6.72%
71
Outperform
$20.19B18.6150.41%3.30%8.30%7.69%
65
Neutral
$218.59B26.182.28%1.26%2.87%
61
Neutral
$18.38B12.79-2.54%3.03%1.52%-15.83%
60
Neutral
$41.16B28.871.87%11.60%-4.33%
58
Neutral
$13.77B23.821.67%3.92%4.98%
56
Neutral
$1.44B38.783.62%-0.64%-60.71%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
YUMC
Yum China Holdings
46.26
-0.35
-0.75%
DRI
Darden Restaurants
175.67
10.98
6.67%
DPZ
Domino's Pizza
403.76
-29.23
-6.75%
MCD
McDonald's
306.94
16.37
5.63%
PZZA
Papa John's International
40.76
-7.89
-16.22%
YUM
Yum! Brands
149.37
16.69
12.58%

Yum China Holdings Corporate Events

Yum China Reports Strong Q3 2025 Earnings Growth
Nov 5, 2025

Yum China Holdings, Inc. is the largest restaurant company in China, operating over 17,000 restaurants under brands such as KFC and Pizza Hut, with a focus on quick-service and casual dining sectors, and a strong digitalized supply chain.

Yum China Earnings Call: Growth Amid Challenges
Nov 5, 2025

Yum China Holdings recently held its earnings call, revealing a balanced sentiment with notable achievements and some operational challenges. The company celebrated record store openings and strong operating profit growth, alongside successful product innovations. However, these were tempered by increased delivery costs and the impact of its Meituan investment.

Yum China Declares Q3 2025 Dividend
Nov 4, 2025

Yum China Holdings announced a quarterly cash dividend of USD 0.24 per share for the third quarter of 2025, payable on December 23, 2025. This announcement reflects the company’s ongoing commitment to returning value to shareholders and may impact its financial positioning and investor relations positively.

Yum China Reports Strong Q3 2025 Results with Increased Profits and Expansion
Nov 4, 2025

Yum China Holdings reported strong financial results for the third quarter of 2025, with an 8% increase in operating profit to $400 million, driven by same-store sales growth and accelerated new store openings. The company is on track to return approximately $1.5 billion to shareholders in 2025, highlighting its robust financial health and commitment to shareholder value. Digital sales and delivery services have significantly contributed to the company’s revenue, with delivery sales growing by 32% year-over-year and digital ordering accounting for 95% of total sales. The company continues to innovate with new product offerings and expand its market presence through flexible store formats and franchise strategies.

Yum China Considers Quarterly Dividend Amid Strategic Financial Planning
Oct 22, 2025

Yum China Holdings, Inc. announced that its board of directors is considering the declaration and payment of a quarterly dividend. The decision will be made around November 4, 2025, but there is no assurance that the dividend will be declared. This potential dividend reflects the company’s ongoing financial strategies and could impact its market positioning and shareholder value.

Yum China to Announce Q3 2025 Financial Results on November 4
Oct 15, 2025

Yum China Holdings, Inc. has announced that it will release its unaudited financial results for the third quarter of 2025 on November 4, 2025, before the U.S. market opens. The results will be reviewed by the company’s audit committee, and a conference call will be held to discuss the earnings. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and investor relations.

Yum China Announces Board Committee Changes
Sep 22, 2025

Yum China Holdings, Inc. announced a change in the composition of its Board Committees, appointing Mr. Zhe (David) Wei as a member of the Food Safety and Sustainability Committee, effective September 19, 2025. This appointment reflects the company’s ongoing commitment to enhancing its governance structure and focus on sustainability, potentially impacting its operational strategies and stakeholder relations positively.

Yum China Holdings Announces Board Composition and Roles
Sep 22, 2025

Yum China Holdings, Inc. has announced the composition of its board of directors, highlighting the roles and functions of each member. The board includes a mix of executive, non-executive, and independent directors, with various committees focusing on audit, compensation, governance, and food safety and sustainability. This announcement underscores the company’s commitment to robust corporate governance and strategic oversight, which could enhance its operational efficiency and stakeholder confidence.

Financial DisclosuresRegulatory Filings and Compliance
Yum China Releases Interim Report for H1 2025
Neutral
Sep 3, 2025

On September 3, 2025, Yum China Holdings, Inc. released an interim report for the first half of 2025, complying with the listing rules of the Hong Kong Stock Exchange. This report provides stakeholders with insights into the company’s financial performance and operational updates for the period ending June 30, 2025.

The most recent analyst rating on (YUMC) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Yum China Holdings stock, see the YUMC Stock Forecast page.

Business Operations and StrategyStock Buyback
Yum China Expands 2025 Share Repurchase Plan
Positive
Sep 3, 2025

On September 3, 2025, Yum China Holdings announced an additional US$270 million share repurchase plan for 2025, supplementing the previously announced US$510 million repurchases for the second half of the year. This move, part of a broader strategy to return US$1.5 billion to shareholders in 2025 through dividends and share repurchases, underscores the company’s confidence in its growth prospects and commitment to enhancing shareholder value. The expanded repurchase program is expected to provide flexibility and reflects Yum China’s ability to generate strong free cash flow, positioning it to return US$3 billion to shareholders from 2025 to 2026.

The most recent analyst rating on (YUMC) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Yum China Holdings stock, see the YUMC Stock Forecast page.

Yum China Grants Equity Awards and Appoints New Director
Aug 12, 2025

Yum China Holdings announced the grant of equity awards under its 2022 Long Term Incentive Plan, distributing restricted share units to 622 employees, primarily restaurant general managers, to incentivize continued service and performance. Additionally, the company appointed Zhe (David) Wei as a director and granted him shares as part of his annual stock retainer, reflecting Yum China’s commitment to rewarding and retaining talent while aligning employee and director interests with company performance.

Yum China Reports Strong First Half 2025 Financial Results
Aug 11, 2025

Yum China Holdings, Inc. reported a 3% year-over-year growth in total system sales for the first half of 2025, driven by net new unit contributions. The company opened 583 net new stores, contributing to a total revenue increase of 2% to $5.8 billion. Operating profit rose by 10% to $703 million, with an improved operating margin of 12.2%. The company also returned $536 million to shareholders through share repurchases and cash dividends, indicating a strong financial performance and commitment to shareholder value.

Yum China Files Q2 2025 Financial Report
Aug 11, 2025

Yum China Holdings, Inc. has filed its quarterly report for the period ending June 30, 2025, with the U.S. Securities and Exchange Commission. This filing is part of the company’s regulatory compliance and provides stakeholders with updated financial and operational data, reflecting its ongoing commitment to transparency and adherence to market regulations.

Yum China Reports Strong Q2 2025 Performance
Aug 6, 2025

Yum China Holdings, Inc. is the largest restaurant company in China, operating over 16,000 restaurants under several brands, including KFC and Pizza Hut, in the quick-service and casual dining sectors. The company leverages strong digital capabilities and a loyalty program to enhance customer service and experience.

Yum China Q2 2025 Earnings Call Highlights Robust Growth
Aug 6, 2025

Yum China Holdings’ recent earnings call highlighted a strong financial performance, marked by record highs in revenue and operating profits. The company showcased successful expansion of its key brands and innovative product launches that have driven growth. Despite facing challenges such as increased rider costs and pressure on ticket averages, Yum China’s strategic initiatives and positive aspects have positioned it strongly in the market.

Yum China Announces Board Composition and Committee Roles
Aug 5, 2025

Yum China Holdings, Inc. has announced the composition of its board of directors and their respective roles within the company. The board includes a mix of executive, non-executive, and independent directors, with various members serving on key committees such as Audit, Compensation, Nominating and Governance, and Food Safety and Sustainability. This announcement reflects the company’s commitment to strong governance and operational oversight, which is crucial for maintaining its market position and ensuring stakeholder confidence.

Yum China Declares Q2 2025 Dividend of USD 0.24 per Share
Aug 5, 2025

Yum China Holdings announced a quarterly cash dividend of USD 0.24 per share for the second quarter of 2025, with the payment date set for September 23, 2025. This announcement reflects the company’s ongoing commitment to returning value to shareholders and may influence investor sentiment positively, reinforcing its stable financial positioning in the market.

Yum China Reports Q2 2025 Financial Results and New Director Appointment
Aug 5, 2025

Yum China Holdings, Inc. announced its unaudited financial results for the second quarter of 2025 and the appointment of a new director. This announcement, filed with the U.S. Securities and Exchange Commission, reflects the company’s ongoing efforts to maintain transparency with its stakeholders and strengthen its leadership team, potentially impacting its market position and operational strategies.

Yum China Reports Strong Q2 2025 Financial Results with Record Operating Margin
Aug 5, 2025

Yum China Holdings announced a strong financial performance for the second quarter of 2025, with a 14% increase in operating profit and a record-high operating margin of 10.9%. The company reported a 4% growth in total system sales and opened 336 new stores, bringing the total to nearly 17,000 locations. Digital sales and delivery services continued to grow, contributing significantly to overall sales. The company also returned $274 million to shareholders and expanded its membership base. CEO Joey Wat highlighted the company’s focus on innovation and operational efficiency, which has driven growth and enhanced customer experiences.

Yum China Expands Board with Appointment of David Wei
Aug 5, 2025

Yum China Holdings, Inc. has appointed Zhe (David) Wei as a new independent director, expanding its board from 12 to 13 members. Mr. Wei brings extensive experience in investment and leadership roles, having previously served as CEO of Alibaba.com and currently holding positions in various companies. His appointment is expected to enhance Yum China’s strategic direction and governance, potentially impacting its market positioning positively.

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.Date of analysis: Nov 05, 2025