Yum China initiated with a Buy at Deutsche Bank

Deutsche Bank initiated coverage of Yum China with a Buy rating and $58 price target. While the firm has a conservative view on China’s restaurant industry, it prefers limited-service restaurants over full-service restaurants due to greater flexibility in controlling new-store openings and prefers Western food due to it taking share from Chinese food. The firm expects Yum China to report a visible profit margin uptrend despite near-term same-store-sales downside risk, the analyst added.