Yum China Holdings (YUMC) AI Stock Analysis

• Market Cap: $16.49B
• Dividend Yield: 1.98%
• Average Volume (3M): 1.97M
• Price to Earnings (P/E): 18.0
• Beta (1Y): 0.37
• Revenue Growth: 3.53%
• EPS Growth: 16.64%
• Country: US
• Employees: 140,000
• Sector: Consumer Cyclical
• Sector Strength: 80
• Industry: Restaurants
• EPS (TTM): 0.58
• Shares Outstanding: 368,718,170
• 10 Day Avg. Volume: 2,149,408
• 30 Day Avg. Volume: 1,967,076
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 1.49
• Enterprise Value/Gross Profit: 8.73
• Enterprise Value/Ebitda: 9.90
• 1Y Price Target: $57.87
• Price Target Upside: 32.58% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 72 Outperform
• Price Target: $48.00 ▲(9.97% Upside)

Yum China's overall stock score is driven by strong financial performance and positive earnings call insights, highlighting record revenue and profit growth. While technical indicators suggest a bearish trend, the company's strategic initiatives and valuation provide a balanced outlook. The expanded share repurchase plan further supports shareholder value enhancement.

Positive Factors

Market Share

Yum China is still gaining market share with loads of growth drivers, evidenced by rapid volume growth and delivery sales growth.

Shareholder Returns

The company is on track to return USD4.5bn to shareholders in the form of share repurchases and dividends.

Store Expansion

Yum China is the largest quick service restaurant player in China, with significant store expansion and a total store count of 16,978.

Negative Factors

Earnings Forecast

Earnings forecasts for 2025-2026 have been trimmed by 7% and 5% due to more moderate cost savings across KFC.

Net Profit Growth

Higher-than-expected franchised store opening mix and store closures will affect the net profit growth forecast meaningfully.

Valuation Concerns

The stock is trading at a 17.5x FY25E P/E, which is not particularly attractive.

Yum China Holdings Business Overview & Revenue Model

Company Description

Yum China Holdings, Inc. is a leading restaurant company in China, operating a portfolio of popular brands including KFC, Pizza Hut, Taco Bell, and others. Founded in 2016 as a spin-off from Yum! Brands, Inc., the company focuses on quick-service and casual dining segments, providing a diverse menu that caters to the tastes of Chinese consumers. With a strong presence across mainland China, Yum China is known for its innovative approach to food offerings, leveraging technology to enhance customer experience and operational efficiency.

How the Company Makes Money

Yum China generates revenue primarily through the operation of company-owned and franchised restaurants. Its key revenue streams include sales from food and beverages, franchise fees, and rental income from franchisees. The company benefits from a robust franchise model that allows for rapid expansion with lower capital expenditures. Additionally, Yum China partners with delivery services and leverages digital platforms to boost sales, particularly in urban areas where convenience is a major consumer preference. The company's focus on menu innovation and localization also helps drive customer engagement and loyalty, further enhancing its earnings potential.

Yum China Holdings Financial Statement Overview

Summary

Yum China Holdings exhibits strong financial performance with consistent revenue growth and profitability. The company demonstrates effective cash flow management, although there is a need to monitor debt levels carefully.

Income Statement

Yum China Holdings has demonstrated consistent revenue growth, with a notable increase in the TTM period. The company maintains healthy gross and net profit margins, although there is a slight decline in EBIT and EBITDA margins compared to previous years. Overall, the income statement reflects strong revenue growth and profitability, with some room for improvement in operational efficiency.

Balance Sheet

The balance sheet shows a stable financial position with a manageable debt-to-equity ratio that has improved in the TTM period. The return on equity remains strong, indicating effective use of shareholder funds. However, the equity ratio suggests a moderate reliance on debt financing, which could pose risks if not managed carefully.

Cash Flow

The cash flow statement highlights robust operating cash flow and a positive trend in free cash flow growth. The company has a strong free cash flow to net income ratio, indicating efficient cash generation relative to earnings. Overall, Yum China Holdings demonstrates solid cash flow management, supporting its operational and financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.43B	11.30B	10.98B	9.57B	9.85B	8.26B
Gross Profit	1.95B	1.89B	1.89B	1.43B	1.36B	1.27B
EBITDA	1.72B	1.68B	1.57B	1.72B	1.25B	1.16B
Net Income	919.00M	911.00M	827.00M	442.00M	990.00M	784.00M
Balance Sheet
Total Assets	10.98B	11.12B	12.03B	11.83B	13.22B	10.88B
Cash, Cash Equivalents and Short-Term Investments	2.15B	1.84B	2.60B	3.15B	4.00B	4.26B
Total Debt	1.81B	2.41B	2.54B	2.40B	2.83B	2.39B
Total Liabilities	4.51B	4.69B	4.91B	4.67B	5.30B	4.40B
Stockholders Equity	5.79B	5.73B	6.41B	6.48B	7.06B	6.21B
Cash Flow
Free Cash Flow	835.81M	714.00M	763.00M	734.00M	442.00M	695.00M
Operating Cash Flow	1.44B	1.42B	1.47B	1.41B	1.13B	1.11B
Investing Cash Flow	-336.87M	-178.00M	-743.00M	-504.00M	-818.00M	-3.11B
Financing Cash Flow	-1.56B	-1.64B	-716.00M	-844.00M	-313.00M	2.06B

Yum China Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 43.65
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 43.65 is below the 20-day moving average (MA) of 44.76, below the 50-day MA of 45.74, and below the 200-day MA of 46.07, indicating a bearish trend. The MACD of -0.34 indicates Positive momentum. The RSI at 45.81 is Neutral, neither overbought nor oversold. The STOCH value of 11.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for YUMC.

Yum China Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRI	79 Outperform	$24.22B	23.47	46.16%	2.74%	6.03%	4.08%
DPZ	73 Outperform	$15.56B	27.13	-14.74%	1.39%	3.65%	5.71%
YUMC	72 Outperform	$16.49B	18.04	15.84%	1.98%	3.53%	16.64%
MCD	70 Outperform	$223.74B	27.05	-216.57%	2.24%	1.17%	2.09%
YUM	64 Neutral	$40.79B	28.72	-19.43%	1.93%	11.30%	-7.82%
Sector *	61 Neutral	$17.59B	13.29	-4.88%	3.05%	1.25%	-14.67%
PZZA	60 Neutral	$1.60B	20.99	-20.16%	3.82%	-1.46%	8.10%

Yum China Holdings Corporate Events

Yum China Releases Interim Report for H1 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.

Yum China Expands 2025 Share Repurchase Plan

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.