Forensic Analyst

Jason Yap, CFA

Forensic Accounting

Yum China Holdings  / Forensic Accounting

<ul>
<li>Yum China opened 563 stores in the fourth quarter and 1,806 stores in all 2021, bringing its total store count to 11,788 at the end of last year</li>
<li>While the brisk rate of new store openings helped Yum China achieve revenue growth in Q4 2021, the persistent weakness in SSSG and restaurant margins are causes of concern</li>
<li>Investors should monitor whether store expansion is accompanied by a corresponding decline in key operating metrics. If so, there could be parallels with Haidilao</li>
</ul>


Yum China opened 563 stores in the fourth quarter and 1,806 stores in all 2021, bringing its total store count to 11,788 at the end of last year
While the brisk rate of new store openings helped Yum China achieve revenue growth in Q4 2021, the persistent weakness in SSSG and restaurant margins are causes of concern
Investors should monitor whether store expansion is accompanied by a corresponding decline in key operating metrics. If so, there could be parallels with Haidilao


Yum China (YUMC US) - Store Expansion Edged Revenue Growth

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>An analysis of the shareholder register of<a href="https://www.smartkarma.com/entities/bhp-group-plc" target="_blank" data-smartkarma-citation="entities:28086:1" rel="noopener">BHP Group PLC (BHPBF US)</a> suggests that BHP has misunderestimated the passive ownership of PLC by a lot.</li>
<li>
<a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a> looks set to add to its coffers on talk it is negotiating the sale of KFC and Pizza Hut franchises. </li>
<li>How the mighty have fallen. <a href="https://www.smartkarma.com/entities/cathay-pacific-airways-ltd" target="_blank" data-smartkarma-citation="entities:243:1" rel="noopener">Cathay Pacific Airways (293 HK)</a> has gone from the de-facto flag carrier to the obligatory kicking bag.</li>
</ul>


An analysis of the shareholder register ofBHP Group PLC (BHPBF US) suggests that BHP has misunderestimated the passive ownership of PLC by a lot.

Jardine Matheson Holdings (JM SP) looks set to add to its coffers on talk it is negotiating the sale of KFC and Pizza Hut franchises. 
How the mighty have fallen. Cathay Pacific Airways (293 HK) has gone from the de-facto flag carrier to the obligatory kicking bag.


Last Week in Event SPACE: BHP, Jardine Matheson, Cathay Pacific, HK&S Hotels, Large CCASS Moves

<ul>
<li>Reportedly <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a> is negotiating the sale of Jardine Restaurant Group, a wholly-owned subsidiary that operates KFC and Pizza Hut franchises.</li>
<li>Additionally, JMH is exploring the sale of its 28% stake in <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a>.</li>
<li>JMH is in the market every day buying its own shares, but on a less aggressive basis compared to the pace seen shortly after reloading its buyback program last month.</li>
</ul>


Reportedly Jardine Matheson Holdings (JM SP) is negotiating the sale of Jardine Restaurant Group, a wholly-owned subsidiary that operates KFC and Pizza Hut franchises.
Additionally, JMH is exploring the sale of its 28% stake in Greatview Aseptic Packaging (468 HK).
JMH is in the market every day buying its own shares, but on a less aggressive basis compared to the pace seen shortly after reloading its buyback program last month.


Jardine Matheson (JM SP): Fast Food Junked

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

<ul>
<li>Yum Brands operates in a highly competitive restaurant industry which is currently facing the impact of the Omicron variant.</li>
<li>Prior to the spread of the new variant, the company reported strong third-quarter earnings with record-breaking unit development, ongoing strong digital sales, and the adaptability of its brands.</li>
<li>Despite a challenging operating environment and pandemic headwinds, the company opened 760 net new units with broad-based success throughout their portfolio.</li>
</ul>


Yum Brands operates in a highly competitive restaurant industry which is currently facing the impact of the Omicron variant.
Prior to the spread of the new variant, the company reported strong third-quarter earnings with record-breaking unit development, ongoing strong digital sales, and the adaptability of its brands.
Despite a challenging operating environment and pandemic headwinds, the company opened 760 net new units with broad-based success throughout their portfolio.


<ul>
<li>Yum Brands zoomed past the target price from our last report as the management witnessed an excellent second quarter.</li>
<li>It is worth highlighting that Yum Brands' same-store sales are 4% above the 2019 levels despite the negative impact of nearly 700 of their stores being temporarily closed because of the COVID-19 by the end of Q2 2021.</li>
<li>Given its current growth, we are optimistic about Yum Brands and maintain our ‘Hold’ rating with a revised target price.</li>
</ul>


Yum Brands zoomed past the target price from our last report as the management witnessed an excellent second quarter.
It is worth highlighting that Yum Brands' same-store sales are 4% above the 2019 levels despite the negative impact of nearly 700 of their stores being temporarily closed because of the COVID-19 by the end of Q2 2021.
Given its current growth, we are optimistic about Yum Brands and maintain our ‘Hold’ rating with a revised target price.


United States

Yum! Brands, Inc, owns and franchises quick-service restaurants worldwide.  The Company develops, operates, franchises and licenses a worldwide system of restaurants which prepare, package and sell a menu of food items.

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Yum! Brands Inc (YUM US)

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Yum Brands operates in a highly competitive restaurant industry which is currently facing the impact of the Omicron variant. Prior to the spread...

Baptista Research

Yum! Brands Inc. - Investment Thesis

Yum Brands zoomed past the target price from our last report as the management witnessed an excellent second quarter. It is worth highlighting...

Baptista Research

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