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Yum China Holdings (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 76 (OpenAI - 4o)
Rating:76Outperform
Price Target:
$50.00
▲(11.11% Upside)
Yum China's strong financial performance and positive earnings call are the most significant factors driving the stock score. The company's robust revenue growth and profitability, coupled with strategic expansion and innovation, position it well for future growth. Technical analysis and valuation present a neutral outlook, with no significant corporate events impacting the score.
Positive Factors
Revenue Growth
Record revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability and expansion.
Store Expansion
Aggressive store expansion enhances market presence and customer reach, fueling future growth and competitive positioning in the restaurant industry.
Cash Flow Management
Strong cash flow management ensures liquidity and financial flexibility, enabling strategic investments and resilience against economic fluctuations.
Negative Factors
Delivery Platform Competition
Increased competition in delivery services may pressure margins and necessitate strategic adjustments to maintain profitability and market share.
Average Ticket Size Decline
A decline in average ticket size could impact revenue growth, requiring strategies to boost customer spending and optimize sales mix.
Consumer Spending Challenges
Rational consumer spending patterns may hinder sales growth, necessitating innovative marketing and product strategies to drive demand.

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

Yum China Holdings Business Overview & Revenue Model

Company DescriptionYum 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 Bell, and East Dawning brands, which specialize in chicken, pizza, hot pot cooking, simmer pot, Italian coffee, specialty coffee, Mexican-style food, and Chinese food categories. The company also operates V-Gold Mall, a mobile e-commerce platform, which sells electronics, home and kitchen accessories, and other general merchandise, as well as fried rice, steak, pasta and other ready meals, and coffee capsules. In addition, it operates franchise restaurants under the KFC, Pizza Hut, Huang Ji Huang, Taco Bell, Little Sheep, East Dawning, Lavazza, and COFFii & JOY names. As of March 31, 2022, the company operated 12,117 restaurants in approximately 1,700 cities. Yum China Holdings, Inc. was incorporated in 2016 and is headquartered in Shanghai, China.
How the Company Makes MoneyYum 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 Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call highlights Yum China's record performance in revenue and profit, strong expansion of KFC and Pizza Hut, and innovative product launches. However, challenges such as increased competition from delivery platforms and pressure on average ticket size present headwinds. The company remains confident in achieving its full-year targets.
Q2-2025 Updates
Positive Updates
Record Highs in Revenue and Operating Profit
Yum China achieved second-quarter record highs in revenue, operating profit, and operating profit margin. Operating profit grew 14% year-over-year to USD 304 million.
KFC and Pizza Hut Expansion
KFC achieved 5% system sales growth and opened 295 new stores, totaling 12,238 stores. Pizza Hut expanded to 3,864 stores with 95 net new openings and sustained its growth trajectory with 2% same-store sales growth.
Innovative Product Launches
KFC's Crazy Spicy Zinger drove excitement with sales soaring over 30% during the promotion period. Pizza Hut's new thin crust pizza and All-You-Can-Eat campaign attracted new customers.
Strong Delivery Growth
Delivery sales accounted for 45% of total sales, up from 38% last year, driven by promotions on delivery platforms.
Increased Capital Returns
Yum China returned $536 million to shareholders in the first half of the year, with plans to return at least $1.2 billion in 2025.
Negative Updates
Pressure from Delivery Platform Competition
Intense competition from delivery platforms impacted the cost, leading to higher rider costs and affecting margins.
Decline in Average Ticket Size
KFC's average ticket size was slightly down due to strong growth in smaller orders, despite a higher delivery mix. This trend is expected to continue.
Challenges in Consumer Spending
Consumer spending remains rational, posing challenges in predicting same-store sales growth in the dynamic market.
Company Guidance
During Yum China's second quarter 2025 earnings call, the company reported record highs in revenue, operating profit, and operating margin, driven by dual-focused strategies emphasizing same-store sales and system sales growth. Same-store sales growth turned positive at 1%, with same-store transactions increasing for the tenth consecutive quarter. Yum China opened 336 net new stores, achieving a 4% system sales growth, aligning with their mid-single-digit annual target. Restaurant margins improved by 60 basis points and operating profit by 14% to USD 304 million. KFC saw 5% system sales growth, with over 12,000 stores now operating, while Pizza Hut achieved 2% same-store sales growth and a 17% increase in same-store transactions. Delivery sales increased to 45% of the total sales mix, up from 38% the previous year, with sales outside delivery aggregators accounting for around 70% of total sales. Despite platform competition, Yum China maintained a balanced approach, focusing on long-term benefits while managing price perception and protecting margins. The company plans to open 1,600 to 1,800 net new stores in 2025 and expects to return $3 billion to shareholders from 2025 through 2026.

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 moderate reliance on debt financing that requires careful monitoring.
Income Statement
78
Positive
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
75
Positive
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
80
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue11.43B11.30B10.98B9.57B9.85B8.26B
Gross Profit1.95B1.89B1.89B1.43B1.41B1.27B
EBITDA1.73B1.68B1.59B1.26B1.25B1.16B
Net Income919.00M911.00M827.00M442.00M990.00M784.00M
Balance Sheet
Total Assets10.98B11.12B12.03B11.83B13.22B10.88B
Cash, Cash Equivalents and Short-Term Investments2.15B1.84B2.60B3.15B4.00B4.26B
Total Debt2.23B2.41B2.54B2.40B2.83B2.39B
Total Liabilities4.51B4.69B4.91B4.67B5.30B4.40B
Stockholders Equity5.79B5.73B6.41B6.48B7.06B6.21B
Cash Flow
Free Cash Flow834.00M714.00M763.00M734.00M442.00M695.00M
Operating Cash Flow1.44B1.42B1.47B1.41B1.13B1.11B
Investing Cash Flow-336.00M-178.00M-743.00M-522.00M-855.00M-3.11B
Financing Cash Flow-1.56B-1.64B-716.00M-844.00M-313.00M2.06B

Yum China Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price45.00
Price Trends
50DMA
43.98
Positive
100DMA
44.66
Positive
200DMA
45.44
Negative
Market Momentum
MACD
0.19
Negative
RSI
60.48
Neutral
STOCH
93.76
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 45 is above the 20-day moving average (MA) of 43.32, above the 50-day MA of 43.98, and below the 200-day MA of 45.44, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 60.48 is Neutral, neither overbought nor oversold. The STOCH value of 93.76 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
76
Outperform
$16.54B18.5415.84%1.96%3.53%16.64%
71
Outperform
$21.86B20.1550.41%3.09%8.30%7.69%
70
Outperform
$219.42B26.342.28%1.17%2.09%
65
Neutral
$1.75B23.503.48%-1.46%8.10%
63
Neutral
$41.12B29.261.90%11.30%-7.82%
61
Neutral
$18.38B12.79-2.54%3.03%1.52%-15.83%
58
Neutral
$14.29B24.721.58%3.92%4.98%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
YUMC
Yum China Holdings
45.00
2.31
5.41%
DRI
Darden Restaurants
187.41
29.62
18.77%
DPZ
Domino's Pizza
424.82
15.91
3.89%
MCD
McDonald's
310.11
15.41
5.23%
PZZA
Papa John's International
52.88
4.29
8.83%
YUM
Yum! Brands
147.38
16.76
12.83%

Yum China Holdings Corporate Events

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.

Yum China Considers Quarterly Dividend Declaration
Jul 24, 2025

Yum China Holdings, Inc. announced that its board of directors is considering the declaration and payment of a quarterly dividend, with a decision expected around August 5, 2025. This potential dividend declaration reflects the company’s ongoing evaluation of its financial strategies and could impact its financial positioning and shareholder returns.

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: Oct 16, 2025