External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>The macro headwinds have been tough, but in our view, Yum China has already tackled them very well.</li><li>Based on our estimates, SSS recovery for KFC and Pizza Hut in 10M25 (vs 2019) was as high as 88%, which is way better than industry average of 70%.</li><li>And we believe the main reason for such outperformance lies in its commitment to deliver good food with great value. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The macro headwinds have been tough, but in our view, Yum China has already tackled them very well.Based on our estimates, SSS recovery for KFC and Pizza Hut in 10M25 (vs 2019) was as high as 88%, which is way better than industry average of 70%.And we believe the main reason for such outperformance lies in its commitment to deliver good food with great value. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Yum China (9987 HK/YUMC US) - Key takeaways from YUMC 2025 Investor Day

<ul><li>The macro headwinds have been tough, but in our view, Yum China has already tackled them very well.</li><li>Based on our estimates, SSS recovery for KFC and Pizza Hut in 10M25 (vs 2019) was as high as 88%, which is way better than industry average of 70%.</li><li>And we believe the main reason for such outperformance lies in its commitment to deliver good food with great value. In terms of company guidance (the FY26E-28E target), we believe the major beat is from Pizza Hut (esp. on store expansion and restaurant level OP margin), but the figures for KFC are slightly below expectation (esp. for the restaurant level OP margin).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The macro headwinds have been tough, but in our view, Yum China has already tackled them very well.Based on our estimates, SSS recovery for KFC and Pizza Hut in 10M25 (vs 2019) was as high as 88%, which is way better than industry average of 70%.And we believe the main reason for such outperformance lies in its commitment to deliver good food with great value. In terms of company guidance (the FY26E-28E target), we believe the major beat is from Pizza Hut (esp. on store expansion and restaurant level OP margin), but the figures for KFC are slightly below expectation (esp. for the restaurant level OP margin).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Yum China (9987 HK/YUMC US) - Key Takeaways from YUMC 2025 Investor Day

Thematic (Sector/Industry)

<ul><li>The consumption trend in Apr 2025 improved MoM across most sub-sectors compared to Mar 2025.</li><li>Numbers during the 2025 5-1 holidays either maintained this trend or further improved, mainly thanks to: 1) a low base, 2) improving weather conditions, 3) longer holidays compared to last year, and 4) fairly robust inbound tourism growth.</li><li>By subsector, apparel and tourism-hotel outperformed our expectations, sportswear and home appliances met expectations, while catering lagged behind. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The consumption trend in Apr 2025 improved MoM across most sub-sectors compared to Mar 2025.Numbers during the 2025 5-1 holidays either maintained this trend or further improved, mainly thanks to: 1) a low base, 2) improving weather conditions, 3) longer holidays compared to last year, and 4) fairly robust inbound tourism growth.By subsector, apparel and tourism-hotel outperformed our expectations, sportswear and home appliances met expectations, while catering lagged behind. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Consumer Discretionary - Constructive trend in S-R but cautious in L-R

<ul><li>Upgrade our rating to OUTPERFORM on the consumer discretionary sector.</li><li>The foot traffic of the 2024 10-1 National Day holidays was strong (recovery rate has improved vs Mid-autumn and Dragon Boat Festival) but the spending power remained fairly week.</li><li>Even though the retail sales growth was still under pressure, a sequential improvement was observed compared with Sep 2024, and this should be able to support the further re-rating of the sector valuation. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Upgrade our rating to OUTPERFORM on the consumer discretionary sector.The foot traffic of the 2024 10-1 National Day holidays was strong (recovery rate has improved vs Mid-autumn and Dragon Boat Festival) but the spending power remained fairly week.Even though the retail sales growth was still under pressure, a sequential improvement was observed compared with Sep 2024, and this should be able to support the further re-rating of the sector valuation. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Consumer Discretionary - Sequential Improvement May Support Re-Rating

<ul><li>A mixed CNY, robust topline was likely aided by seasonality while the fall in spending power and price war continued.</li><li>We do agree both passenger flows and overall sales were strong during the CNY holiday, given that the spending power was somewhat diluted by the resumption of outbound tourism.</li><li>But on the other hand, the 2024 CNY holiday was a longer-than-usual one and contained one more Saturday and also the Valentine’s Day, hence the recovery rate after adjustment may just be stable (instead of improvements vs 4Q23).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

A mixed CNY, robust topline was likely aided by seasonality while the fall in spending power and price war continued.We do agree both passenger flows and overall sales were strong during the CNY holiday, given that the spending power was somewhat diluted by the resumption of outbound tourism.But on the other hand, the 2024 CNY holiday was a longer-than-usual one and contained one more Saturday and also the Valentine’s Day, hence the recovery rate after adjustment may just be stable (instead of improvements vs 4Q23).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Consumer Sector – CNY Was Mixed and We Stay Conservative

China

Yum China operates and franchises a diverse portfolio of restaurant brands across the People's Republic of China, including KFC, Pizza Hut, Taco Bell, Lavazza, Little Sheep, and Huang Ji Huang. The company also provides online food delivery services. Yum China Holdings, Inc. was spun off from Yum! Brands in 2016 and is headquartered in Shanghai, China.

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Yum China (9987 HK)

Yum China (9987 HK/YUMC US) - Key takeaways from YUMC 2025 Investor Day

Based on our estimates, SSS recovery for KFC and Pizza Hut in 10M25 (vs 2019) was as high as 88%, which is way better than industry average of 70%.

CMB International

Yum China (9987 HK/YUMC US) - Key Takeaways from YUMC 2025 Investor Day

Based on our estimates, SSS recovery for KFC and Pizza Hut in 10M25 (vs 2019) was as high as 88%, which is way better than industry average of 70%.

CMB International

Consumer Discretionary - Constructive trend in S-R but cautious in L-R

Numbers during the 2025 5-1 holidays either maintained this trend or further improved, mainly thanks to: 1) a low base, 2) improving weather...

CMB International

Consumer Discretionary - Sequential Improvement May Support Re-Rating

Upgrade our rating to OUTPERFORM on the consumer discretionary sector. The foot traffic of the 2024 10-1 National Day holidays was strong

CMB International

China Consumer Sector – CNY Was Mixed and We Stay Conservative

We do agree both passenger flows and overall sales were strong during the CNY holiday, given that the spending power was somewhat diluted by the...

CMB International

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