Yum China Holdings (YUMC) AI Stock Analysis

• Market Cap: $16.51B
• Dividend Yield: 1.63%
• Average Volume (3M): 3.74M
• Price to Earnings (P/E): 18.5
• Beta (1Y): 0.46
• Revenue Growth: 2.79%
• EPS Growth: 19.36%
• Country: US
• Employees: 140,000
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Restaurants
• EPS (TTM): 2.38
• Shares Outstanding: 374,996,950
• 10 Day Avg. Volume: 3,121,498
• 30 Day Avg. Volume: 3,738,834
• PEG Ratio: 0.95
• 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: 1.19
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 10.41
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $58.55
• Price Target Upside: 32.95% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

Yum China Holdings demonstrates solid financial performance with strong revenue and profit growth, supported by effective cost management. While technical indicators show some bearish trends, the company's valuation remains reasonable. Positive earnings calls and strategic corporate events further enhance its growth prospects, despite some challenges in store expansions and delivery costs.

Positive Factors

Market Position

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

Sales Growth

Recent trends are very constructive with positive same-store sales growth during the Chinese New Year, no negative impact on traffic post price hikes for KFC, and decent traffic after the launch of a new menu at Pizza Hut.

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

Profit Growth

Higher-than-expected franchised store opening mix and store closures will affect the net profit growth forecast meaningfully.

Store Sales

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

Valuation

The stock is trading at a 17.5x FY25E P/E, which is not particularly attractive.

Yum China Holdings Business Overview & Revenue Model

Company Description

Yum China Holdings, Inc. (YUMC) is a leading restaurant company in China, operating popular brands such as KFC, Pizza Hut, and Taco Bell, along with several local Chinese brands. The company focuses on delivering high-quality, innovative, and localized food offerings through its extensive network of restaurants across the country. Yum China is known for its ability to adapt global brand strategies to the local Chinese market, leveraging its deep understanding of consumer preferences and trends.

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 exhibits robust financial health with consistent revenue growth of 18.2% and solid profit margins. Efficient cost management and strong cash flow generation further support its financial stability, though a slight decrease in total assets warrants attention.

Income Statement

Yum China Holdings shows solid financial performance with a consistent upward trajectory in revenue, reflected in a revenue growth rate of 18.2% from 2022 to 2023. The company has maintained stable profitability, evidenced by a TTM gross profit margin of 38.2% and a net profit margin of 8.1%. EBIT and EBITDA margins are also strong at 10.8% and 14.0% respectively, indicating efficient operations and cost management.

Balance Sheet

The balance sheet of Yum China Holdings demonstrates solid financial stability with a debt-to-equity ratio of 0.34, suggesting a moderate level of leverage. The equity ratio stands at 52.6%, reflecting a healthy proportion of equity financing. Return on equity is at 15.8%, indicating effective use of equity to generate profits. However, a decrease in total assets from previous years may need attention.

Cash Flow

Yum China Holdings exhibits strong cash flow generation with an impressive free cash flow growth rate of 28.3% in the TTM period. The operating cash flow to net income ratio is 1.57, suggesting strong cash generation from operational activities. The free cash flow to net income ratio of 1.00 further indicates efficient cash management.

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
1.81B	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
2.41B	2.54B	2.40B	2.83B	2.39B
	Net Debt
1.69B	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
714.00M	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: 44.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• 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 44.04 is below the 20-day moving average (MA) of 44.85, below the 50-day MA of 48.34, and above the 200-day MA of 43.54, indicating a neutral trend. The MACD of -1.19 indicates Negative momentum. The RSI at 42.80 is Neutral, neither overbought nor oversold. The STOCH value of 30.74 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	76 Outperform	$16.51B	18.47	15.73%	1.63%	2.79%	19.36%
CMG	76 Outperform	$69.47B	45.30	45.57%	―	12.57%	21.42%
MCD	76 Outperform	$223.07B	27.39	-216.57%	2.21%	-0.22%	―
YUM	68 Neutral	$40.38B	27.81	-19.43%	1.82%	10.09%	-11.50%
SBUX	64 Neutral	$97.04B	27.61	-47.07%	2.79%	-0.50%	-24.28%
Sector *	61 Neutral	$6.65B	11.71	3.09%	3.98%	2.65%	-20.82%
PZZA	60 Neutral	$1.17B	14.06	-20.16%	5.16%	-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.