Yum China Holdings (YUMC) AI Stock Analysis

• Market Cap: $17.52B
• Dividend Yield: 1.54%
• Average Volume (3M): 3.64M
• Price to Earnings (P/E): 20.0
• Beta (1Y): 0.49
• Revenue Growth: 2.96%
• EPS Growth: 17.75%
• Country: US
• Employees: 140,000
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Restaurants
• EPS (TTM): 2.33
• Shares Outstanding: 374,996,950
• 10 Day Avg. Volume: 3,947,622
• 30 Day Avg. Volume: 3,637,681
• PEG Ratio: 1.13
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 10.41
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $60.06
• Price Target Upside: 38.67% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

Yum China Holdings exhibits solid financial performance with strong revenue growth and profitability, supported by effective cash flow management. While technical indicators show some bearish trends, the company's strategic initiatives and reasonable valuation offer a balanced outlook. Strong earnings call highlights and positive corporate events further bolster the stock's prospects.

Positive Factors

Financial Performance

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

Market Position

Yum China is the largest quick service restaurant player in China, highlighting its dominant market position.

Shareholder Value

A significant return of USD 4.5 billion to shareholders is planned through share repurchases and dividends, indicating strong shareholder value.

Negative Factors

Revenue Growth

A prudent view on revenue growth is warranted in 2025 due to FX and same store sales growth uncertainty and a shift to franchise stores and smaller formats.

Sales Momentum

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

Topline Growth

The pace of store expansion is expected to be discounted by approximately 50%, impacting topline growth from new stores.

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 makes money primarily through the operation of its quick-service and casual dining restaurants, with revenue generated from food and beverage sales. The company benefits from a strong brand portfolio, including KFC and Pizza Hut, which are market leaders in their respective categories in China. Key revenue streams include dine-in, delivery, and digital sales, supported by a robust loyalty program and advanced digital infrastructure. Strategic partnerships with local suppliers and technology companies enhance operational efficiency and customer engagement, contributing to Yum China's financial performance. The company's earnings are also influenced by its ability to innovate menu offerings, optimize its supply chain, and expand its restaurant footprint across diverse regions in China.

Yum China Holdings Financial Statement Overview

Summary

Yum China Holdings demonstrates strong financial health, with consistent revenue growth, impressive profitability margins, and effective cash flow management. The balance sheet remains solid with moderate leverage, supporting a stable financial structure. Continued focus on enhancing profitability and maintaining cash flow strength positions the company favorably in the industry.

Income Statement

Yum China Holdings has shown consistent revenue growth with a 3% increase from 2023 to 2024. The gross profit margin is strong at 100%, indicating efficient cost management. The net profit margin has improved to 8.1% in 2024, reflecting enhanced profitability. EBIT and EBITDA margins are also robust at 10.3%, suggesting healthy operational performance.

Balance Sheet

The company maintains a stable financial position with a debt-to-equity ratio of 0.35, indicating moderate leverage. The return on equity has strengthened to 15.9%, showcasing effective use of equity to generate profits. An equity ratio of 51.5% reflects a well-capitalized balance sheet, although a slight decline in stockholders' equity is observed.

Cash Flow

Cash flow analysis reveals a robust free cash flow increase to $1.419 billion in 2024, driven by strong operating cash flows. The operating cash flow to net income ratio is 1.56, highlighting efficient cash generation relative to net income. The free cash flow to net income ratio of 1.56 indicates strong cash retention capabilities.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.30B	10.98B	9.57B	9.85B	8.26B
	Gross Profit
1.89B	1.88B	1.33B	1.36B	1.27B
	EBIT
1.16B	1.11B	833.00M	842.00M	788.00M
	EBITDA
1.68B	1.59B	1.72B	2.29B	1.86B
	Net Income Common Stockholders
911.00M	827.00M	442.00M	990.00M	784.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.84B	2.60B	3.15B	4.00B	4.26B
	Total Assets
11.12B	12.03B	11.83B	13.22B	10.88B
	Total Debt
1.99B	2.54B	2.40B	2.83B	2.39B
	Net Debt
1.27B	1.41B	1.27B	1.70B	1.23B
	Total Liabilities
4.69B	4.91B	4.67B	5.30B	4.40B
	Stockholders Equity
5.73B	6.41B	6.48B	7.06B	6.21B
Cash Flow		Free Cash Flow
1.42B	763.00M	734.00M	442.00M	695.00M
	Operating Cash Flow
1.42B	1.47B	1.41B	1.13B	1.11B
	Investing Cash Flow
-178.00M	-743.00M	-504.00M	-818.00M	-3.11B
	Financing Cash Flow
-1.64B	-716.00M	-862.00M	-350.00M	2.06B

Yum China Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 43.31
• 50DMA: Negative
• 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 Negative. The current price of 43.31 is below the 20-day moving average (MA) of 45.78, below the 50-day MA of 48.47, and below the 200-day MA of 43.42, indicating a bearish trend. The MACD of -1.11 indicates Negative momentum. The RSI at 40.11 is Neutral, neither overbought nor oversold. The STOCH value of 64.14 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	78 Outperform	$17.52B	20.01	15.02%	1.54%	2.96%	17.75%
CMG	76 Outperform	$68.07B	44.39	45.57%	―	12.57%	21.42%
MCD	76 Outperform	$228.57B	28.06	-216.57%	2.19%	1.67%	-1.61%
YUM	68 Neutral	$40.38B	27.81	-19.43%	1.84%	6.68%	-7.09%
SBUX	62 Neutral	$97.04B	27.61	-47.07%	2.78%	-0.50%	-24.28%
Sector *	60 Neutral	$6.58B	11.55	3.14%	4.05%	2.58%	-21.37%
PZZA	60 Neutral	$1.13B	13.60	-20.16%	5.46%	-3.57%	2.31%

Yum China Holdings Corporate Events

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.

Spark’s Take on YUMC Stock

According to Spark, TipRanks’ AI Analyst, (YUMC) is a Outperform.

Yum China Holdings exhibits strong financial health and positive earnings momentum, driven by consistent revenue growth and strategic expansion. The technical analysis supports an optimistic outlook with upward trends, although the valuation suggests moderate growth expectations. The favorable earnings call reinforces confidence in the company’s strategic direction, despite some challenges in pricing and labor costs.

To see Spark’s full report on (YUMC) stock, click here.

Yum China Holdings Appoints Adrian Ding as CFO

On March 6, 2025, Yum China Holdings appointed Adrian Ding as Chief Financial Officer, following his role as Acting CFO since October 2024. With a background in corporate finance and strategic investments, Ding has been instrumental in driving Yum China’s growth and market engagement. His appointment is expected to further strengthen the company’s financial strategies and support its RGM 2.0 strategy, enhancing its industry positioning and growth momentum.