Yum China Holdings (YUMC)
NYSE:YUMC
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Yum China Holdings
(NYSE:YUMC)
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Rating:73Outperform
Price Target:
$54.00
▲(11.23% Upside)
Action:UpgradedDate:05/04/26
The score is driven primarily by solid financial performance (steady growth, recovered margins vs. 2022, improving free cash flow, and manageable leverage) and supportive earnings-call guidance/capital returns. Valuation is also favorable (moderate P/E with a ~2% dividend). These positives are tempered by weaker technical momentum and ongoing near-term margin headwinds from delivery mix and rider costs.
Positive Factors
Scale & Expansion
Aggressive multi-year store rollouts create durable competitive scale across China. A larger network strengthens brand presence, drives procurement and logistics economies, and the planned 40–50% franchise mix reduces capital intensity, supporting sustainable market-share gains and profitability.
Negative Factors
Rising delivery mix & rider costs
A structural shift toward higher delivery penetration increases per-order operating costs and reliance on third-party platforms. Rising rider and labor expenses compress margins and create ongoing cost pressure that must be managed through pricing, logistics changes, or fee capture to preserve long-term profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale & Expansion
Aggressive multi-year store rollouts create durable competitive scale across China. A larger network strengthens brand presence, drives procurement and logistics economies, and the planned 40–50% franchise mix reduces capital intensity, supporting sustainable market-share gains and profitability.
Read all positive factors
Yum China Holdings (YUMC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.90B
Dividend Yield1.98%
Average Volume (3M)1.52M
Price to Earnings (P/E)13.9
Beta (1Y)0.44
Revenue Growth6.72%
EPS Growth8.73%
CountryUS
Employees140,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)2.62
Shares Outstanding351,197,200
10 Day Avg. Volume1,231,236
30 Day Avg. Volume1,519,063
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 Cap1.08
Enterprise Value/Revenue1.51
Enterprise Value/Gross Profit8.79
Enterprise Value/Ebitda9.83
Forecast
1Y Price Target
$61.01Price Target Upside25.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering19
EPS Forecast (FY)2.89
Revenue Forecast (FY)$12.66B
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:Apr 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive operational and financial update: record operating profit, meaningful store expansion, strong KFC and Pizza Hut momentum (including improved Pizza Hut margins), rapid scaling of modular additions (KCOFFEE and KPRO), and aggressive shareholder returns. Key challenges remain around elevated delivery mix and rider costs, higher labor and packaging-driven cost of sales, and near-term softness in March/seasonal timing that left same-store sales effectively flat. Management provided conservative near-term margin guidance but expressed confidence in margin recovery in the second half and reiterated full-year targets. Overall, the positives (record profit, growth initiatives, store rollout, and strengthened profitability at Pizza Hut) outweigh the negatives, which are being actively managed.Positive Updates
Reported Revenue and Operating Profit Growth
Revenue grew 10% in reporting currency; operating profit increased 12% in reporting currency (positively impacted by foreign exchange). Excluding FX impact, system sales grew 4% and operating profit grew 6% with OP margin expanding 20 basis points year-over-year.
Negative Updates
Rider Cost and Delivery Mix Pressure
Delivery mix rose from 42% to 54% year-over-year, increasing rider-related cost pressure. Rider costs now account for close to 30% of cost of labor and cost of labor rose to 26.7% (+100 basis points YoY). The rider cost impact on margins was ~190 basis points, only partially mitigated by operational efficiencies.
Read all updates
Q1-2026 Updates
Positive
Negative
Reported Revenue and Operating Profit Growth
Revenue grew 10% in reporting currency; operating profit increased 12% in reporting currency (positively impacted by foreign exchange). Excluding FX impact, system sales grew 4% and operating profit grew 6% with OP margin expanding 20 basis points year-over-year.
Read all positive updates
Company Guidance
Management guided that Q2 should deliver positive same‑store sales (with the 14th consecutive quarter of positive same‑store transaction growth) and sequentially improving comps for Yum China, KFC and Pizza Hut, while striving to keep operating profit (OP) margin roughly in line with the prior‑year period; rider costs remain the biggest near‑term headwind though they expect rider‑cost pressure to ease in H2 and margins to sequentially improve versus H1. For full‑year 2026 they reiterated targets of a same‑store sales index of 100–102, mid‑ to high‑single‑digit system sales growth, high‑single‑digit operating‑profit growth, double‑digit EPS growth, a slight improvement in restaurant margin and OP margin, and to surpass 20,000 stores by year‑end. They also confirmed capital return plans to return $1.5 billion in 2026 (~$400M dividends and ~$1.1B share repurchases, ~9% of market cap) and a plan from 2027 to return ~100% of annual free cash flow after subsidiaries’ dividends to noncontrolling interests (expected ~$900M–$1B+ in 2027–28 and >$1B thereafter).Yum China Holdings Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
76
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.09B | 11.80B | 11.30B | 10.98B | 9.57B | 9.85B |
| Gross Profit | 2.08B | 2.04B | 1.89B | 1.89B | 1.43B | 1.41B |
| EBITDA | 1.86B | 1.82B | 1.68B | 1.59B | 1.26B | 1.25B |
| Net Income | 946.00M | 929.00M | 911.00M | 827.00M | 442.00M | 990.00M |
Balance Sheet | ||||||
| Total Assets | 10.84B | 10.78B | 11.12B | 12.03B | 11.83B | 13.22B |
| Cash, Cash Equivalents and Short-Term Investments | 1.43B | 1.38B | 1.84B | 2.60B | 3.15B | 4.00B |
| Total Debt | 1.87B | 2.35B | 2.41B | 2.54B | 2.40B | 2.83B |
| Total Liabilities | 4.73B | 4.68B | 4.69B | 4.91B | 4.67B | 5.30B |
| Stockholders Equity | 5.43B | 5.38B | 5.73B | 6.41B | 6.48B | 7.06B |
Cash Flow | ||||||
| Free Cash Flow | 940.81M | 840.00M | 714.00M | 763.00M | 734.00M | 442.00M |
| Operating Cash Flow | 1.58B | 1.47B | 1.42B | 1.47B | 1.41B | 1.13B |
| Investing Cash Flow | -173.32M | -5.00M | -178.00M | -743.00M | -522.00M | -855.00M |
| Financing Cash Flow | -1.78B | -1.69B | -1.64B | -716.00M | -844.00M | -313.00M |
Yum China Holdings Technical Analysis
Negative
48.55
Price Trends
52.39
Negative
50.19
Negative
47.33
Positive
Market Momentum
-0.86
Negative
38.61
Neutral
40.86
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 48.55 is below the 20-day moving average (MA) of 49.66, below the 50-day MA of 52.39, and above the 200-day MA of 47.33, indicating a neutral trend. The MACD of -0.86 indicates Negative momentum. The RSI at 38.61 is Neutral, neither overbought nor oversold. The STOCH value of 40.86 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $16.90B | 13.93 | 16.97% | 1.98% | 6.72% | 8.73% | |
71 Outperform | $22.35B | 20.24 | 50.71% | 3.06% | 8.51% | 6.66% | |
67 Neutral | $43.34B | 24.92 | -23.33% | 1.84% | 9.65% | 23.32% | |
65 Neutral | $201.66B | 27.85 | -336.89% | 2.31% | 6.76% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $11.06B | 22.18 | -15.04% | 1.63% | 5.17% | -0.62% | |
46 Neutral | $1.08B | 17.53 | -6.99% | 4.72% | -0.27% | -64.64% |
* Consumer Cyclical Sector Average
YUMC
Yum China Holdings
48.11
5.06
11.77%
DRI
Darden Restaurants
195.17
2.08
1.08%
DPZ
Domino's Pizza
332.53
-136.35
-29.08%
MCD
McDonald's
283.70
-22.70
-7.41%
PZZA
Papa John's International
32.85
-4.02
-10.91%
YUM
Yum! Brands
157.25
12.06
8.31%
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.