Yum China Holdings (YUMC) AI Stock Analysis

• Market Cap: $16.71B
• Dividend Yield: 2.14%
• Average Volume (3M): 2.53M
• Price to Earnings (P/E): 18.8
• Beta (1Y): 0.45
• Revenue Growth: 2.79%
• EPS Growth: 19.36%
• Country: US
• Employees: 140,000
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Restaurants
• EPS (TTM): 0.77
• Shares Outstanding: 373,323,580
• 10 Day Avg. Volume: 2,595,913
• 30 Day Avg. Volume: 2,528,143
• PEG Ratio: -0.94
• Price to Book (P/B): 3.55
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 31.35
• Enterprise Value/Market Cap: 1.45
• Enterprise Value/Revenue: 0.54
• Enterprise Value/Gross Profit: 12.65
• Enterprise Value/Ebitda: 3.61
• 1Y Price Target: $58.23
• Price Target Upside: 29.66% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 78 Outperform
• Price Target: $50.00 ▲(11.33%Upside)

Yum China Holdings receives a strong overall stock score due to its robust financial performance, highlighted by consistent revenue growth and efficient cost management. The positive sentiment from the recent earnings call and strategic corporate events further support its growth potential. However, mixed technical indicators and valuation metrics suggest careful monitoring of market conditions.

Positive Factors

Capital Return Program

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

Dividend Increase

The company has declared a 50% increase in quarterly dividend, reflecting confidence in its financial performance and future growth.

Market Share and Growth Drivers

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

Negative Factors

P/E Ratio

The stock is trading at a P/E ratio not particularly attractive, despite a higher gross profit margin.

Same Store Sales Growth

Expected negative or flat same store sales growth for both KFC and Pizza Hut suggests challenges in maintaining sales momentum.

Store Opening and Closures

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

Yum China Holdings Business Overview & Revenue Model

Company Description

Yum China Holdings, Inc. is a leading restaurant company in China, operating and managing popular brands such as KFC, Pizza Hut, and Taco Bell. The company is a licensee of Yum! Brands in China and is headquartered in Shanghai. Yum China focuses on offering innovative and localized food choices to cater to the diverse tastes of Chinese consumers, while maintaining the quality and brand integrity of its global franchises. With thousands of locations across China, Yum China is a major player in the quick-service restaurant and casual dining sectors.

How the Company Makes Money

Yum China makes money primarily through the operation of its restaurant brands in China, which include KFC, Pizza Hut, and Taco Bell, among others. The company's revenue streams consist of sales from company-operated restaurants, franchise fees from franchises, and sales of food and paper to franchised restaurants. A significant portion of its revenue comes from KFC and Pizza Hut, which are well-established and popular brands in the Chinese market. Yum China also generates income through delivery services, digital sales, and loyalty programs, which have been bolstered by partnerships with local technology companies for mobile payment solutions and online ordering platforms. The company's strategic expansion into smaller cities and the adaptation of its menu to local tastes further contribute to its earnings.

Yum China Holdings Financial Statement Overview

Summary

Yum China Holdings shows strong financial performance with consistent revenue growth of 18.2% from 2022 to 2023 and stable profitability. The company's efficient cost management is reflected in solid EBIT and EBITDA margins, while cash flow generation is robust with impressive free cash flow growth. However, the balance sheet indicates a need for attention to asset management despite moderate leverage and healthy equity ratios.

Income Statement

Yum China Holdings shows solid financial performance with a consistent upward trajectory in revenue, reflected in a revenue growth rate of 18.2% from 2022 to 2023. The company has maintained stable profitability, evidenced by a TTM gross profit margin of 38.2% and a net profit margin of 8.1%. EBIT and EBITDA margins are also strong at 10.8% and 14.0% respectively, indicating efficient operations and cost management.

Balance Sheet

The balance sheet of Yum China Holdings demonstrates solid financial stability with a debt-to-equity ratio of 0.34, suggesting a moderate level of leverage. The equity ratio stands at 52.6%, reflecting a healthy proportion of equity financing. Return on equity is at 15.8%, indicating effective use of equity to generate profits. However, a decrease in total assets from previous years may need attention.

Cash Flow

Yum China Holdings exhibits strong cash flow generation with an impressive free cash flow growth rate of 28.3% in the TTM period. The operating cash flow to net income ratio is 1.57, suggesting strong cash generation from operational activities. The free cash flow to net income ratio of 1.00 further indicates efficient cash management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.33B	11.30B	10.98B	9.57B	9.85B	8.26B
	Gross Profit
1.92B	1.89B	1.89B	1.43B	1.36B	1.27B
	EBIT
1.19B	1.16B	1.11B	833.00M	842.00M	961.00M
	EBITDA
1.76B	1.81B	1.57B	1.72B	1.25B	1.16B
	Net Income Common Stockholders
916.00M	911.00M	827.00M	442.00M	990.00M	784.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.99B	1.84B	2.60B	3.15B	4.00B	4.26B
	Total Assets
11.00B	11.12B	12.03B	11.83B	13.22B	10.88B
	Total Debt
1.95B	2.41B	2.54B	2.40B	2.83B	2.39B
	Net Debt
1.13B	1.69B	1.41B	1.27B	1.70B	1.23B
	Total Liabilities
4.56B	4.69B	4.91B	4.67B	5.30B	4.40B
	Stockholders Equity
5.78B	5.73B	6.41B	6.48B	7.06B	6.21B
Cash Flow		Free Cash Flow
778.68M	714.00M	763.00M	734.00M	442.00M	695.00M
	Operating Cash Flow
1.43B	1.42B	1.47B	1.41B	1.13B	1.11B
	Investing Cash Flow
-349.59M	-178.00M	-743.00M	-504.00M	-818.00M	-3.11B
	Financing Cash Flow
-1.14B	-1.64B	-716.00M	-844.00M	-313.00M	2.06B

Yum China Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 44.91
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 44.91 is above the 20-day moving average (MA) of 43.77, above the 50-day MA of 44.69, and below the 200-day MA of 45.01, indicating a neutral trend. The MACD of -0.18 indicates Negative momentum. The RSI at 54.58 is Neutral, neither overbought nor oversold. The STOCH value of 77.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for YUMC.

Yum China Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YUMC	78 Outperform	$16.71B	18.75	15.73%	2.14%	2.79%	19.36%
CMG	72 Outperform	$68.20B	45.51	45.57%	―	12.57%	21.42%
MCD	71 Outperform	$214.82B	26.50	-216.57%	2.36%	-0.22%	-3.83%
SBUX	67 Neutral	$103.90B	33.23	-47.07%	2.67%	-0.50%	-24.28%
YUM	66 Neutral	$40.00B	28.70	-19.43%	1.97%	10.09%	-11.50%
PZZA	65 Neutral	$1.58B	20.42	-20.16%	3.82%	-2.77%	4.01%
Sector *	63 Neutral	$6.98B	11.41	2.80%	4.24%	2.68%	-24.94%

Yum China Holdings Corporate Events

Yum China Holds 2025 Annual Stockholders Meeting

Yum China Holdings, Inc. held its 2025 annual meeting of stockholders on May 23, 2025, in Hong Kong, where 83.50% of the company’s outstanding common stock was represented. During the meeting, stockholders elected 12 directors, approved KPMG as auditors, endorsed executive compensation, and granted the board authority to issue and repurchase shares within specified limits, impacting the company’s governance and financial strategies until June 23, 2026.

The most recent analyst rating on (YUMC) stock is a Buy with a $37.40 price target. To see the full list of analyst forecasts on Yum China Holdings stock, see the YUMC Stock Forecast page.

Yum China Releases 2024 Annual Financial Report

On April 7, 2025, Yum China Holdings, Inc. released its annual report for the year ending December 31, 2024, in accordance with the Hong Kong Stock Exchange’s listing rules. This report provides insights into the company’s financial performance and strategic positioning, impacting stakeholders by offering a comprehensive overview of its operations and market strategy.