Yum China Holdings (YUMC) AI Stock Analysis

• Market Cap: $18.49B
• Dividend Yield: 1.98%
• Average Volume (3M): 1.69M
• Price to Earnings (P/E): 20.9
• Beta (1Y): 0.46
• Revenue Growth: 3.29%
• EPS Growth: 6.72%
• Country: US
• Employees: 140,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.40
• Shares Outstanding: 353,096,440
• 10 Day Avg. Volume: 1,735,189
• 30 Day Avg. Volume: 1,692,182
• PEG Ratio: 2.41
• Price to Book (P/B): 3.19
• Price to Sales (P/S): 1.45
• P/FCF Ratio: 20.40
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 1.72
• Enterprise Value/Gross Profit: 9.97
• Enterprise Value/Ebitda: 11.42
• 1Y Price Target: $61.96
• Price Target Upside: 18.31% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 2.89
• Revenue Forecast (FY): $12.56B

• Rating: 75 Outperform
• Price Target: $60.00 ▲(14.57% Upside)
• Action: Reiterated Date: 02/05/26
• Date: Action: Reiterated 02/05/26

The score is driven primarily by solid financial performance (especially strong and improving free cash flow) and a constructive, confident earnings outlook with significant shareholder returns. Technicals are supportive but show near-overbought conditions, while valuation appears only moderate rather than clearly cheap.

Positive Factors

Strong cash generation

Yum China’s materially higher free cash flow and improved cash conversion (free cash flow ≈100% of net income in 2025) provide durable funding for store expansion, capex, dividends and buybacks while reducing refinancing and liquidity risk over the medium term.

Aggressive, scalable store expansion

Rapid net new store growth with an equity-and-franchise hybrid and a 40–50% franchise mix scales the business while lowering incremental capital needs per store. Hitting 20k+ stores supports long-term market share gains and provides a multi-year revenue runway if unit economics hold.

Product & modular innovation driving AUV

Modular concepts and product innovation (K Coffee, K Pro, Pizza Hut thin-crust) raise average unit volumes and customer frequency across formats. These repeatable rollouts improve capital efficiency, deepen brand differentiation, and support sustainable same-store transaction growth over time.

Negative Factors

Rising delivery mix & rider costs

A structurally higher delivery mix shifts sales to a lower-margin channel and raises variable rider/labor costs that are hard to fully pass to customers. Over the medium term this compresses restaurant margins and forces trade-offs between growth, pricing and profitability.

Modest same-store sales growth

Weak full-year same-store sales despite strong transaction trends implies limited pricing or check growth per store. Reliance on net-new units for revenue growth risks diluting overall returns if newer locations underperform legacy stores or face lower average sales.

Wage inflation and labor pressure

Rising wage and broader labor cost inflation increases both store-level and delivery-related expenses. Sustained labor cost pressure can erode operating margins even with productivity programs, making margin improvement targets harder to achieve without structural pricing or efficiency gains.

Yum China Holdings Business Overview & Revenue Model

Company Description

Yum 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 Money

Yum China generates revenue primarily through the operation of its company-owned restaurants and the franchising of its brands. The main revenue streams include sales from food and beverages, franchise fees from franchisees, and royalties from franchised restaurants. The company also benefits from its strategic partnerships with suppliers and delivery services, enhancing its operational efficiency and customer reach. Additionally, Yum China invests in digital platforms and technology to streamline ordering and delivery processes, further driving sales and customer engagement. Seasonal menu offerings and promotional campaigns also contribute to revenue growth by attracting new customers and encouraging repeat visits.

Yum China Holdings Financial Statement Overview

Summary

Solid fundamentals led by strong cash generation (free cash flow up sharply in 2025 and improved cash conversion) and improving margins versus the 2022 trough. Balance sheet risk appears moderate with declining debt, though some 2025 leverage/return ratio visibility is limited due to unavailable reported metrics.

Income Statement

Revenue has grown steadily from 2022–2025, with 2025 up ~2.96% vs. 2024. Profitability also improved meaningfully versus the 2022 trough: gross margin rose to ~18.4% (from ~14.9% in 2022) and operating margin improved to ~11.1% (from ~6.9% in 2022). Net margin is healthy for the sector at ~7.9% in 2025, though it remains below the 2021 peak (~10.0%), suggesting some ongoing cost pressure or normalization after a strong prior year.

Balance Sheet

Leverage looks moderate with total debt declining to ~$1.9B in 2025 from ~$2.5B in 2023, and equity remains sizeable (~$5.4B in 2025). Total assets have been stable-to-down from 2021–2025, which reduces balance-sheet expansion risk but also signals limited asset growth. A key limitation is that reported debt-to-equity and return on equity are shown as 0.0 for 2025, so trend-based leverage and shareholder return comparisons rely primarily on 2020–2024 (where return on equity ran ~6.8%–15.9% and debt-to-equity ~0.37–0.42).

Cash Flow

Cash generation is a clear strength. Operating cash flow has been consistently strong (~$1.1B–$1.5B annually), and 2025 free cash flow jumped to ~$1.47B (up sharply vs. 2024). Cash conversion improved materially: free cash flow rose to about 100% of net income in 2025 versus ~50% in 2023–2024, indicating better cash realization. The main watch-out is volatility in free cash flow growth across years (including declines in 2021 and 2024), though the overall multi-year level remains solid.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	11.80B	11.30B	10.98B	9.57B	9.85B
Gross Profit	2.04B	1.89B	1.89B	1.43B	1.41B
EBITDA	1.82B	1.68B	1.59B	1.26B	1.25B
Net Income	929.00M	911.00M	827.00M	442.00M	990.00M
Balance Sheet
Total Assets	10.78B	11.12B	12.03B	11.83B	13.22B
Cash, Cash Equivalents and Short-Term Investments	1.38B	1.84B	2.60B	3.15B	4.00B
Total Debt	2.35B	2.41B	2.54B	2.40B	2.83B
Total Liabilities	4.68B	4.69B	4.91B	4.67B	5.30B
Stockholders Equity	5.38B	5.73B	6.41B	6.48B	7.06B
Cash Flow
Free Cash Flow	840.00M	714.00M	763.00M	734.00M	442.00M
Operating Cash Flow	1.47B	1.42B	1.47B	1.41B	1.13B
Investing Cash Flow	-5.00M	-178.00M	-743.00M	-522.00M	-855.00M
Financing Cash Flow	-1.69B	-1.64B	-716.00M	-844.00M	-313.00M

Yum China Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 52.37
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Neutral. The current price of 52.37 is below the 20-day moving average (MA) of 54.99, above the 50-day MA of 51.10, and above the 200-day MA of 46.34, indicating a neutral trend. The MACD of 0.88 indicates Positive momentum. The RSI at 45.82 is Neutral, neither overbought nor oversold. The STOCH value of 28.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for YUMC.

Yum China Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRI	76 Outperform	$24.25B	22.07	54.10%	3.06%	8.61%	9.39%
YUMC	75 Outperform	$18.49B	20.91	16.73%	1.98%	3.29%	6.72%
MCD	75 Outperform	$235.97B	27.79	―	2.31%	1.26%	2.87%
YUM	74 Outperform	$44.36B	28.93	―	1.84%	11.60%	-4.33%
DPZ	67 Neutral	$13.73B	23.24	―	1.63%	3.92%	4.98%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
PZZA	45 Neutral	$1.05B	35.64	―	4.72%	-0.64%	-60.71%

Yum China Holdings Corporate Events

Yum China Announces Upcoming Board Transition for Director

On January 6, 2026, Yum China Holdings, Inc. announced that board member Robert B. Aiken has decided not to stand for re-election at the company’s 2026 Annual Meeting of Stockholders, citing future professional commitments. Aiken will remain on the board and continue serving on the Food Safety and Sustainability Committee until his term expires at the 2026 Annual Meeting; the company emphasized that his decision was not due to any disagreement with management or the board, and publicly expressed appreciation for his service and contributions, signaling an orderly and amicable transition in its board composition.

The most recent analyst rating on (YUMC) stock is a Buy with a $55.00 price target. To see the full list of analyst forecasts on Yum China Holdings stock, see the YUMC Stock Forecast page.