Yum China Holdings (YUMC) AI Stock Analysis

• Market Cap: $16.53B
• Dividend Yield: 1.75%
• Average Volume (3M): 1.79M
• Price to Earnings (P/E): 18.5
• Beta (1Y): 0.39
• Revenue Growth: 3.53%
• EPS Growth: 16.64%
• Country: US
• Employees: 140,000
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Restaurants
• EPS (TTM): 0.58
• Shares Outstanding: 368,718,170
• 10 Day Avg. Volume: 2,098,181
• 30 Day Avg. Volume: 1,792,500
• 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: $56.76
• Price Target Upside: 24.45% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 76 Outperform
• Price Target: $51.00 ▲(11.82% Upside)

Yum China Holdings' overall stock score is driven by strong financial performance and positive earnings call highlights. The company's consistent growth and strategic initiatives outweigh the challenges, positioning it well in the market. The technical analysis and valuation suggest stability and fair pricing, contributing to the overall positive outlook.

Positive Factors

Market Position

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

Sales Growth

Delivery sales accounted for 45% of company sales, reflecting strong demand and a key growth area for the company.

Shareholder Returns

Yum China is on track to return USD4.5bn to shareholders in the form of share repurchases and dividends, indicating strong financial health.

Negative Factors

Earnings Forecast

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

Profit Growth

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

Valuation

The stock is trading at a 17.5x FY25E P/E, which is not particularly attractive despite a higher gross profit margin.

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: 45.61
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 45.61 is below the 20-day moving average (MA) of 46.36, below the 50-day MA of 45.63, and below the 200-day MA of 46.41, indicating a bearish trend. The MACD of -0.41 indicates Positive momentum. The RSI at 44.14 is Neutral, neither overbought nor oversold. The STOCH value of 38.85 is Neutral, 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
YUMC	76 Outperform	$16.53B	18.52	15.84%	1.75%	3.53%	16.64%
MCD	70 Outperform	$215.25B	25.84	-216.57%	2.29%	1.17%	2.09%
SBUX	66 Neutral	$106.13B	40.38	-47.07%	2.62%	0.60%	-35.19%
YUM	66 Neutral	$39.44B	28.06	-19.43%	1.88%	11.30%	-7.82%
Sector *	61 Neutral	$17.22B	11.49	-5.93%	3.08%	1.37%	-15.47%
PZZA	60 Neutral	$1.51B	20.33	-20.16%	3.87%	-1.46%	8.10%
CMG	58 Neutral	$57.43B	37.86	42.59%	―	8.57%	10.72%

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.