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 1Q24 results of Yum China were satisfactory, however the catering industry remain subdued and hence we have become more cautious about YUMC’s 2Q24E outlook.</li><li>But since the turnaround in 2H24E should still be intact, plus the massive buyback and dividend payment, we continue to maintain BUY.</li><li>1Q24 results roughly inline. For 1Q24, Yum China’s sales increased by 1% YoY to US$ 2.96bn, missing CMBI est. by 6%, due to: 1) slight miss in Pizza Hut’s SSSG (fell by 5% vs CMBI est. of -3%), 2) CNY depreciation, 3) lower-than-expected sales per store (as a result of smaller-sized new stores).</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 1Q24 results of Yum China were satisfactory, however the catering industry remain subdued and hence we have become more cautious about YUMC’s 2Q24E outlook.But since the turnaround in 2H24E should still be intact, plus the massive buyback and dividend payment, we continue to maintain BUY.1Q24 results roughly inline. For 1Q24, Yum China’s sales increased by 1% YoY to US$ 2.96bn, missing CMBI est. by 6%, due to: 1) slight miss in Pizza Hut’s SSSG (fell by 5% vs CMBI est. of -3%), 2) CNY depreciation, 3) lower-than-expected sales per store (as a result of smaller-sized new stores).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) - 2Q24E Is Tough but Turnaround Is Still Possible

<ul><li>We do concur with management’s cautious view for 1Q24E (targeting a flattish core OP).</li><li>However, we think the trend is constructive and HSD sales and OP growth is still achievable in FY24E. </li><li>Pair trade is also recommended.</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.

We do concur with management’s cautious view for 1Q24E (targeting a flattish core OP).However, we think the trend is constructive and HSD sales and OP growth is still achievable in FY24E. Pair trade is also recommended.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) – Impressive Cash Return but a Prudent 1Q24E

<ul><li>3Q23 result was a miss, due to weak demand, slow SSSG and intense competition.</li><li>We think Yum China has turned more active to gain or at least retain its market share, perhaps at the expenses of lower GP margin and higher opex (e.g. staff costs).</li><li>But thanks to low valuation (after our earnings cut), we maintain BUY.</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.

3Q23 result was a miss, due to weak demand, slow SSSG and intense competition.We think Yum China has turned more active to gain or at least retain its market share, perhaps at the expenses of lower GP margin and higher opex (e.g. staff costs).But thanks to low valuation (after our earnings cut), we maintain BUY.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) – 3Q23 Result Missed and We Will Stay Cautious

<ul><li>During the 2023 YUMC Investor Day in Xian (last time was in Shanghai in 2019), its management raised the FY23E target and gave a time frame for its mid-term target of 20,000 stores in China (by FY26E).</li><li>We believe such acceleration in growth during FY24E-26E is based on YUMC’s years of refinement in unit economics and a confident answer to the speeding up in industry consolidation.</li><li>Hence, we maintain BUY and lift TP to HK$ 609.41, based on 27x FY24E P/E (unchanged).</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.

During the 2023 YUMC Investor Day in Xian (last time was in Shanghai in 2019), its management raised the FY23E target and gave a time frame for its mid-term target of 20,000 stores in China (by FY26E).We believe such acceleration in growth during FY24E-26E is based on YUMC’s years of refinement in unit economics and a confident answer to the speeding up in industry consolidation.Hence, we maintain BUY and lift TP to HK$ 609.41, based on 27x FY24E P/E (unchanged).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) – Key Takeaways from YUMC 2023 Investor Day

<ul><li>1Q23 result was tremendous, and both sales recovery and margins are better than expected.</li><li>YUMC is still one of our sector top picks, as we think its margin and store expansion can continue to surprise the market.</li><li>Hence, we maintain BUY and raise TP to HK$ 595.15, based on 35x FY23E P/E (up from 33x).</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.

1Q23 result was tremendous, and both sales recovery and margins are better than expected.YUMC is still one of our sector top picks, as we think its margin and store expansion can continue to surprise the market.Hence, we maintain BUY and raise TP to HK$ 595.15, based on 35x FY23E P/E (up from 33x).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) – Confidence increases after upbeat 1Q23 result

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) - 2Q24E Is Tough but Turnaround Is Still Possible

The 1Q24 results of Yum China were satisfactory, however the catering industry remain subdued and hence we have become more cautious about YUMC’s...

CMB International

Yum China (9987 HK) – Impressive Cash Return but a Prudent 1Q24E

The 4Q23 beat and massive jump in cash returns are impressive. However, as the base is still tough for 1Q24E, we believe investors can still...

CMB International

Yum China (9987 HK) – 3Q23 Result Missed and We Will Stay Cautious

We think Yum China has turned more active to gain or at least retain its market share, perhaps at the expenses of lower GP margin and higher opex...

CMB International

Yum China (9987 HK) – Key Takeaways from YUMC 2023 Investor Day

We believe such acceleration in growth during FY24E-26E is based on YUMC’s years of refinement in unit economics and a confident answer to the...

CMB International

Yum China (9987 HK) – Confidence increases after upbeat 1Q23 result

YUMC is still one of our sector top picks, as we think its margin and store expansion can continue to surprise the market.

CMB International

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