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>Both sales and net profit in 2Q25 were roughly inline, but the OP growth was decent and has accelerated vs 1Q25.</li><li>Going forward in 2H25E, while we are delighted to know that the margin guidance has already priced in the potential drags from delivery war and subsidies, we also recognize that the fairly prudent SSSG in 2H25E and potentially low capital return (e.g. US$ 1.2bn in FY25E, even though the US$ 3.0bn for FY25E-26E is still valid), may disappoint some of the investors.</li><li>However, at the end of the day, we still see limited downside for YUMC (guidance should be conservative enough and difficult to miss, plus the capital return of 8% in FY25E), so we maintain BUY and raise the TP.</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.

Both sales and net profit in 2Q25 were roughly inline, but the OP growth was decent and has accelerated vs 1Q25.Going forward in 2H25E, while we are delighted to know that the margin guidance has already priced in the potential drags from delivery war and subsidies, we also recognize that the fairly prudent SSSG in 2H25E and potentially low capital return (e.g. US$ 1.2bn in FY25E, even though the US$ 3.0bn for FY25E-26E is still valid), may disappoint some of the investors.However, at the end of the day, we still see limited downside for YUMC (guidance should be conservative enough and difficult to miss, plus the capital return of 8% in FY25E), so we maintain BUY and raise the TP.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) - Target Kept but Cash Return May Be Limited

<ul><li>1Q25 net profit was roughly inline but sales miss was still notable.</li><li>We are certainly impressed by the market share gains as well as the successful reforms carried out by Pizza Hut.</li><li>However, the higher-than-expected franchised store opening mix and store closures will still affect the net profit growth forecast in FY25E meaningfully.</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.

1Q25 net profit was roughly inline but sales miss was still notable.We are certainly impressed by the market share gains as well as the successful reforms carried out by Pizza Hut.However, the higher-than-expected franchised store opening mix and store closures will still affect the net profit growth forecast in FY25E meaningfully.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) - A More Cautious FY25E After 1Q25 Sales Miss

<ul><li>4Q24 results were largely inline with CMBI/ BBG est., but recent trends are very constructive (positive SSSG during CNY, no negative impact on traffic post price hikes for KFC, and decent traffic after launch of new menu, with amazing value in Pizza Hut).</li><li>Plus the decent cash returns, we maintain BUY and raise TP.</li><li>Management has shared the guidance for FY25E, namely: 1) MSD system sales growth, 2) LSD commodity price deflation, 3) LSD to MSD wage inflation (including the higher rider costs and delivery fees), and 4) flattish or slight improvement in Core 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.

4Q24 results were largely inline with CMBI/ BBG est., but recent trends are very constructive (positive SSSG during CNY, no negative impact on traffic post price hikes for KFC, and decent traffic after launch of new menu, with amazing value in Pizza Hut).Plus the decent cash returns, we maintain BUY and raise TP.Management has shared the guidance for FY25E, namely: 1) MSD system sales growth, 2) LSD commodity price deflation, 3) LSD to MSD wage inflation (including the higher rider costs and delivery fees), and 4) flattish or slight improvement in Core 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) - Constructive FY25E Outlook and Guidance

<ul><li>3Q24 result was a strong beat, from sales to margin, to capital return program.</li><li>Going forward in 4Q24E, we remain optimistic and expect SSSG to turn around and margin to further improve, thanks to the excellent execution of various strategies like: 1) widening of customer base, 2) optimizing the delivery growth and 3) rolling out of more stores with new formats like K-coffee and Pizza Hut WOW.</li><li>Maintain BUY and raise TP to HK$ 451.11.</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.

3Q24 result was a strong beat, from sales to margin, to capital return program.Going forward in 4Q24E, we remain optimistic and expect SSSG to turn around and margin to further improve, thanks to the excellent execution of various strategies like: 1) widening of customer base, 2) optimizing the delivery growth and 3) rolling out of more stores with new formats like K-coffee and Pizza Hut WOW.Maintain BUY and raise TP to HK$ 451.11.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) - A Strong Beat once Again and We Are Optimistic

<ul><li>Sales growth was indeed a miss in 2Q24, but the net profit was a significant beat.</li><li>For 2H24E, we are still very cautious about the demand and so as the level of competition.</li><li>However, thanks to various efforts like Project Fresh Eye, Project Red Eye, rationalizing number of SKUs, more direct sourcing, and ramp up of more profitable store formats (e.g. K-coffee and Pizza Hut’s WOW model) etc., we are confident on a turnaround in 4Q24E. </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.

Sales growth was indeed a miss in 2Q24, but the net profit was a significant beat.For 2H24E, we are still very cautious about the demand and so as the level of competition.However, thanks to various efforts like Project Fresh Eye, Project Red Eye, rationalizing number of SKUs, more direct sourcing, and ramp up of more profitable store formats (e.g. K-coffee and Pizza Hut’s WOW model) etc., we are confident on a turnaround in 4Q24E. 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) - The Best-In-Class Costs Management in 2Q24

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) - Target Kept but Cash Return May Be Limited

However, at the end of the day, we still see limited downside for YUMC (guidance should be conservative enough and difficult to miss, plus the...

CMB International

Yum China (9987 HK) - A More Cautious FY25E After 1Q25 Sales Miss

1Q25 net profit was roughly inline but sales miss was still notable. We are certainly impressed by the market share gains as well as the successful...

CMB International

Yum China (9987 HK) - Constructive FY25E Outlook and Guidance

4Q24 results were largely inline with CMBI/ BBG est., but recent trends are very constructive (positive SSSG during CNY, no negative impact on...

CMB International

Yum China (9987 HK) - A Strong Beat once Again and We Are Optimistic

Going forward in 4Q24E, we remain optimistic and expect SSSG to turn around and margin to further improve, thanks to the excellent execution of...

CMB International

Yum China (9987 HK) - The Best-In-Class Costs Management in 2Q24

Sales growth was indeed a miss in 2Q24, but the net profit was a significant beat. For 2H24E, we are still very cautious about the demand and so as...

CMB International

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