External reports (aggregated public sources), Value Investors Club

Value Investors Club

External reports (aggregated public sources)

Equity Bottom-Up

<ul><li>Yum China's stock price has decreased from $34 per share in 2017 to $30 per share currently, with an $8.7 billion enterprise value</li><li>Despite challenges like Covid and macro weaknesses in China, Yum China has shown growth in sales, EPS, and units since 2017</li><li>The stock peaked at $70 in 2021 but has struggled recently due to weak business performance, leading the author to believe the company is undervalued at 10x PE ex-cash with potential for significant returns to shareholders in the next three years</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Yum China's stock price has decreased from $34 per share in 2017 to $30 per share currently, with an $8.7 billion enterprise valueDespite challenges like Covid and macro weaknesses in China, Yum China has shown growth in sales, EPS, and units since 2017The stock peaked at $70 in 2021 but has struggled recently due to weak business performance, leading the author to believe the company is undervalued at 10x PE ex-cash with potential for significant returns to shareholders in the next three yearsThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Yum China Holdings Inc (YUMC) - Wednesday, Jul 31, 2024

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.

<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 US$ 78.66, 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 US$ 78.66, 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 (YUMC US) – Key Takeaways from YUMC 2023 Investor Day

<ul><li>2Q23 result was resilient, and both SSSG and margins are strong.</li><li>YUMC is still one of our sector top picks, as we think its margin and store expansion will remain strong and perhaps surprise the market.</li><li>Hence, we maintain BUY and fine-tuned TP to US$ 74.47, 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.

2Q23 result was resilient, and both SSSG and margins are strong.YUMC is still one of our sector top picks, as we think its margin and store expansion will remain strong and perhaps surprise the market.Hence, we maintain BUY and fine-tuned TP to US$ 74.47, 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 (YUMC US) – Likely to Be Resilient and Outperform in 2H23E

Thematic (Sector/Industry)

<ul><li>Numbers for catering sector did rebound strongly YoY, but since SSS/ table turnover recovery rate were not as good as expected, de-rating was massive in 1H23E.</li><li>After a disappointing 2Q23 plus worrying macro outlook, we downgrade the sector to MARKET-PERFORM as we see more downside in earnings.</li><li>However, as valuation turned more attractive, we can start to accumulate industry leaders. </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.

Numbers for catering sector did rebound strongly YoY, but since SSS/ table turnover recovery rate were not as good as expected, de-rating was massive in 1H23E.After a disappointing 2Q23 plus worrying macro outlook, we downgrade the sector to MARKET-PERFORM as we see more downside in earnings.However, as valuation turned more attractive, we can start to accumulate industry leaders. 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 Catering Sector – Staying cautious after a disappointing 2Q23E

<ul><li>1Q23 result was tremendous, and both sales recovery and margins are better than expected.</li><li>After one and a half year, YUMC recorded its first +ve SSSG, as turnaround is finally here, we upgrade it to BUY and raise TP to US$ 76.82, based on 35x FY23E P/E (up from 33x).</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></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.After one and a half year, YUMC recorded its first +ve SSSG, as turnaround is finally here, we upgrade it to BUY and raise TP to US$ 76.82, based on 35x FY23E P/E (up from 33x).YUMC is still one of our sector top picks, as we think its margin and store expansion can continue to surprise the market.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 (YUMC US) – Confidence increases after upbeat 1Q23 result

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 Holdings Inc (YUMC) - Wednesday, Jul 31, 2024

Yum China's stock price has decreased from $34 per share in 2017 to $30 per share currently, with an $8.7 billion enterprise value

Value Investors Club

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

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...

CMB International

Yum China (YUMC US) – Likely to Be Resilient and Outperform in 2H23E

YUMC is still one of our sector top picks, as we think its margin and store expansion will remain strong and perhaps surprise the market.

CMB International

China Catering Sector – Staying cautious after a disappointing 2Q23E

Numbers for catering sector did rebound strongly YoY, but since SSS/ table turnover recovery rate were not as good as expected, de-rating was...

CMB International

Yum China (YUMC US) – Confidence increases after upbeat 1Q23 result

After one and a half year, YUMC recorded its first +ve SSSG, as turnaround is finally here, we upgrade it to BUY and raise TP to US$ 76.82, based...

CMB International

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