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Yum China Holdings (YUMC)
NYSE:YUMC
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Yum China Holdings
(NYSE:YUMC)
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Rating:74Outperform
Price Target:
$50.00
â–²(14.65% Upside)
Yum China's strong financial performance and positive earnings call are significant strengths, contributing to a solid overall score. However, the bearish technical indicators and fair valuation slightly temper the outlook. The company's strategic expansion and innovative product launches position it well for future growth, despite challenges in the competitive delivery market.
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)
Market Cap
$15.95B
Dividend Yield2.03%
Average Volume (3M)1.92M
Price to Earnings (P/E)17.9
Beta (1Y)0.36
Revenue Growth3.53%
EPS Growth16.64%
CountryUS
Employees140,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.58
Shares Outstanding368,718,170
10 Day Avg. Volume1,640,361
30 Day Avg. Volume1,918,561
Financial Highlights & Ratios
PEG Ratio1.13
Price to Book (P/B)3.26
Price to Sales (P/S)1.65
P/FCF Ratio26.18
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue1.49
Enterprise Value/Gross Profit8.73
Enterprise Value/Ebitda9.88
Forecast
1Y Price Target
$57.06Price Target Upside30.84% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
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:Feb 10, 2026
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
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.78
Positive
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.75
Positive
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.80
Positive
| 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 | 1.41B | 1.27B |
| EBITDA | 1.73B | 1.68B | 1.59B | 1.26B | 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 | 2.23B | 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
Neutral
43.61
Price Trends
44.97
Negative
44.73
Negative
45.83
Negative
Market Momentum
-0.48
Positive
46.54
Neutral
25.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YUMC, the sentiment is Neutral. The current price of 43.61 is below the 20-day moving average (MA) of 43.93, below the 50-day MA of 44.97, and below the 200-day MA of 45.83, indicating a bearish trend. The MACD of -0.48 indicates Positive momentum. The RSI at 46.54 is Neutral, neither overbought nor oversold. The STOCH value of 25.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $15.95B | 17.87 | 15.84% | 2.03% | 3.53% | 16.64% | |
71 Outperform | $21.93B | 20.17 | 49.43% | 3.03% | 8.30% | 7.69% | |
71 Outperform | $14.79B | 25.30 | -15.02% | 1.54% | 3.65% | 5.71% | |
69 Neutral | $217.82B | 26.14 | -304.06% | 2.32% | 1.17% | 2.09% | |
66 Neutral | $42.38B | 30.16 | -18.65% | 1.83% | 11.30% | -7.82% | |
60 Neutral | $1.54B | 20.71 | -17.38% | 3.91% | -1.46% | 8.10% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
YUMC
Yum China Holdings
43.61
-0.56
-1.27%
DRI
Darden Restaurants
192.98
33.80
21.23%
DPZ
Domino's Pizza
434.41
10.69
2.52%
MCD
McDonald's
305.24
7.68
2.58%
PZZA
Papa John's International
47.92
-3.68
-7.13%
YUM
Yum! Brands
153.94
16.90
12.33%
Yum China Holdings Corporate Events
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.
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.