Analyst

Steve

Equity Bottom-Up

<ul>
<li>China's catering industry has changed compared to pre-COVID19, where overall average selling price (ASP) is continually under pressure, and customers are increasing seeking value-for-money options due to weaker consumer sentiment. </li>
<li>Yum China's same-store-sales growth could be under pressure if the company cannot raise ASP easily like in previous years.  </li>
<li>Yum China's historical valuation should not be used as a benchmark, given that the growth profile has changed (new store openings reaching a plateau; sustained increased competition; lower ASP pressure). </li>
</ul>


China's catering industry has changed compared to pre-COVID19, where overall average selling price (ASP) is continually under pressure, and customers are increasing seeking value-for-money options due to weaker consumer sentiment. 
Yum China's same-store-sales growth could be under pressure if the company cannot raise ASP easily like in previous years.  
Yum China's historical valuation should not be used as a benchmark, given that the growth profile has changed (new store openings reaching a plateau; sustained increased competition; lower ASP pressure). 


Yum China (9987 HK/YUMC US):  Earnings And Derating Risks Not Priced In

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.

<ul><li>Yum China, a leading restaurant company, has presented both opportunities and challenges in its recent earnings call.</li><li>In 2025, Yum China exhibited significant growth by opening over 1,700 net new stores, totaling more than 18,000 stores across 2,500 cities.</li><li>Both same-store sales and system sales showed positive growth, with the latter improving to 7% in Q4, indicating a resilient market presence.</li></ul>

Yum China, a leading restaurant company, has presented both opportunities and challenges in its recent earnings call.In 2025, Yum China exhibited significant growth by opening over 1,700 net new stores, totaling more than 18,000 stores across 2,500 cities.Both same-store sales and system sales showed positive growth, with the latter improving to 7% in Q4, indicating a resilient market presence.

Yum China: Can a 20,000-Store Ambition Supercharge Its Next Growth Cycle?

<ul><li>Yum China Holdings Inc., a licensee of Yum!</li><li>Brands in China, presented mixed results in the third quarter of 2025.</li><li>On a positive note, Yum China reported a record $400 million in adjusted operating profit, marking an 8% increase year-over-year.</li></ul>

Yum China Holdings Inc., a licensee of Yum!Brands in China, presented mixed results in the third quarter of 2025.On a positive note, Yum China reported a record $400 million in adjusted operating profit, marking an 8% increase year-over-year.

Yum China Drops Game-Changing Formats—How Mini Stores & KCOFFEE Are Rewriting the Playbook!

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mcdonald-s-holdings-co-japan" target="_blank" data-smartkarma-citation="entities:985:1" rel="noopener">Mcdonald's Japan (2702 JP)</a> is Japan's defensive, high-quality QSR name in Japan with a defensible moat. </li>
<li>Minimal impact from volatility in tourist arrivals, as most of the outlets are in the suburban areas; therefore, it is truly a domestic consumption story. </li>
<li>McDonald Japan's operating profit margin is double that of Zensho and Skylark (<strong>which comes from operational discipline and price hike</strong>), while its PER is still lower, which is the opportunity </li>
</ul>



Mcdonald's Japan (2702 JP) is Japan's defensive, high-quality QSR name in Japan with a defensible moat. 
Minimal impact from volatility in tourist arrivals, as most of the outlets are in the suburban areas; therefore, it is truly a domestic consumption story. 
McDonald Japan's operating profit margin is double that of Zensho and Skylark (which comes from operational discipline and price hike), while its PER is still lower, which is the opportunity 


McDonald Japan (2702): Higher Margin but Cheaper than Peers

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Thematic (Sector/Industry)

<ul>
<li>One key element was the linking of consumption to the wealth effect</li>
<li>Continuation of targeted support for certain vulnerable sections of society</li>
<li>Tactical changes as well as structural ones to support consumption longer-term</li>
</ul>


One key element was the linking of consumption to the wealth effect
Continuation of targeted support for certain vulnerable sections of society
Tactical changes as well as structural ones to support consumption longer-term


China Consumption Plan: How Special Is This “Special Plan”?

China

Yum China Holdings, Inc. operates chain restaurants. The Company offers pizza, entrees, pasta, rice dishes, appetizers, soups, vegetables, beverages, and desserts. Yum China Holding conducts its business worldwide.

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Yum China Holdings (YUMC US)

Yum China (9987 HK/YUMC US): Earnings And Derating Risks Not Priced In

According to public news, several sell-side have come out with reports adjusting down estimates for the name in the last few days, citing negative...

Steve

Yum China: Can a 20,000-Store Ambition Supercharge Its Next Growth Cycle?

Yum China, a leading restaurant company, has presented both opportunities and challenges in its recent earnings call. In 2025, Yum China exhibited...

Baptista Research

Yum China Drops Game-Changing Formats—How Mini Stores & KCOFFEE Are Rewriting the Playbook!

Yum China Holdings Inc., a licensee of Yum! Brands in China, presented mixed results in the third quarter of 2025. On a positive note, Yum China...

Baptista Research

McDonald Japan (2702): Higher Margin but Cheaper than Peers

With operating margin improving from 10% to 14.8% for last 5 years, McDonald Japan is supposed to perform better than the peers that produce half...

Henry Soediarko

China Consumption Plan: How Special Is This “Special Plan”?

One key new element is the linking consumption to the wealth effect, while continuing targeted support for vulnerable groups and structural changes

Rikki Malik

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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