Financial Performance - Total revenue for the quarter ended June 30, 2021, was $2,451 million, a 29% increase from $1,902 million in the same quarter of 2020[4] - Net profit for the quarter was $193 million, compared to $136 million in the same quarter of 2020, representing a 42% increase[4] - The company restaurant revenue reached $2,233 million for the quarter, up 32% from $1,692 million in the same quarter of 2020[4] - The operating profit for the quarter was $233 million, compared to $128 million in the same quarter of 2020, marking an 82% increase[4] - Total comprehensive income for the quarter was $251 million, compared to $143 million in the same quarter of 2020, indicating a 75% increase[5] - The company reported a diluted earnings per share of $0.42 for the quarter, up from $0.34 in the same quarter of 2020, a 24% increase[4] - Net profit for the six months ended June 30, 2021, was $436 million, compared to $202 million for the same period in 2020, representing a 116% increase[6] - Cash generated from operating activities was $773 million, up from $452 million in the previous year, indicating a 71% increase[6] - Total revenue for the six months ending June 30, 2021, was $5,087 million, with KFC at $3,566 million and Pizza Hut at $1,079 million[22] - The company reported a net profit before tax of $257 million for the quarter ended June 30, 2021, compared to $181 million for the same quarter in 2020, representing a growth of approximately 42%[68] Revenue Sources - The company's revenue primarily consists of restaurant income, franchise fees, and transactions with franchisees and joint ventures[14] - Restaurant income is recognized when customers obtain food and make payment, with net amounts shown after deducting relevant sales tax[14] - Franchise fees include upfront fees and ongoing fees, with initial franchise fees recognized as income over the term of the franchise agreement, typically 10 years for KFC and Pizza Hut[16] - Revenue from transactions with franchisees includes sales of food and packaging, as well as advertising and other services provided to franchisees[17] - Total income from other segments was $106 million for the quarter ending June 30, 2021[20] Assets and Liabilities - Total assets as of June 30, 2021, amounted to $11,304 million, compared to $10,875 million at the end of 2020, reflecting a growth of 3.9%[7] - Total liabilities increased to $4,476 million from $4,404 million, marking a 1.6% increase[7] - Shareholders' equity rose to $6,575 million as of June 30, 2021, compared to $6,206 million at the end of 2020, representing a 5.9% increase[7] - The company reported a decrease in inventory from $398 million to $380 million, a decline of 4.5%[7] - The company’s long-term operating lease liabilities increased slightly from $1,915 million to $1,941 million, a rise of 1.4%[7] Market Expansion and Strategy - The company plans to continue expanding its market presence and investing in new product development to drive future growth[4] - The company believes there are significant expansion opportunities within China, focusing on both existing and new cities[76] - The company is exploring market expansion opportunities and new product development to enhance its competitive edge in the fast-food industry[71] - Yum China plans to open 500 new stores in 2024, expanding its market presence significantly[142] Shareholder Returns - The company declared a cash dividend of $0.12 per share for the quarter ended June 30, 2021, totaling $51 million[30] - The board has authorized a share repurchase program totaling $1.4 billion, with $692 million remaining available for future repurchases as of June 30, 2021[34] - The company has suspended share repurchases since the second quarter of 2020, with no shares repurchased in the six months ended June 30, 2021[34] Tax and Regulatory Issues - The company continues to face scrutiny from tax authorities regarding transfer pricing audits from 2006 to 2015, which may impact financial performance[63] - The company is undergoing a tax audit related to transfer pricing, which may have significant adverse effects on its financial condition and operating results[117] - The company anticipates potential significant developments in tax assessments within the next 12 months[63] Operational Performance - KFC and Pizza Hut generated total revenue of $2,505 million for the quarter ending June 30, 2021, with KFC contributing $1,734 million and Pizza Hut $538 million[20] - KFC's system sales growth for the quarter was 25%, with same-store sales growth of 14%[94] - Pizza Hut's total revenue for the quarter was $538 million, a 26% increase from $424 million in 2020[100] - The company reported a restaurant profit margin of 15.8% for Q2 2021, up from 13.7% in Q2 2020[84] Challenges and Risks - The company faces various risks that could significantly affect its future performance, including food safety issues and supply chain disruptions[130] - The company is exposed to commodity price risks affecting food costs, which are managed through pricing agreements with suppliers[134] - The company has limited ability to pass on increased costs due to competitive pressures in its operating environment[134] Investments and Acquisitions - The company completed the acquisition of a 5% stake in Shengnong for approximately $261 million, which is the largest poultry supplier in China[36] - The company is assessing the potential benefits of acquisitions and strategic investments, which may not be realized in a timely manner[130] - The company has a joint venture with Lavazza Group to explore and develop the Lavazza coffee shop brand concept in China[76] E-commerce and Technology - The company has begun its e-commerce business in 2017, allowing customers to purchase various products directly through its platform[8] - The company is investing $100 million in new technology for digital ordering and delivery systems[142] - The company is focusing on enhancing its e-commerce business, which presents its own set of challenges and risks[130]

Company Overview - Yum China is the largest restaurant company in China, with over 10,506 restaurants as of December 31, 2020, covering more than 1,500 cities[5]. - In 2020, Yum China recorded revenue of $8.3 billion, reflecting significant growth in the Chinese market[5]. - KFC is the leading fast-food brand in China, with approximately 7,100 restaurants as of December 31, 2020, which is about twice the number of its closest competitor[5]. - Pizza Hut is the largest casual dining brand in China, with over 2,300 restaurants across more than 500 cities as of the end of 2020[6]. - The company aims to expand its restaurant network to over 20,000 locations, currently tracking over 700 cities without KFC or Pizza Hut presence[8]. Growth Strategy - The company plans to expand its restaurant network in existing and new cities, indicating a strong growth strategy[5]. - The company aims to enhance its digital and delivery capabilities as part of its growth strategy[4]. - The company is focused on diversifying its menu offerings, including fresh coffee and various food categories[5]. - The company is exploring and developing the Lavazza coffee shop brand concept in China, aiming to provide high-quality coffee in a comfortable environment[13]. - The company has formed a Chinese cuisine division that includes three brands: Xiao Fei Yang, Dong Fang Ji Bai, and Huang Jihuang[13]. Digital and Delivery Initiatives - Digital ordering accounted for about 80% of restaurant revenue for KFC and Pizza Hut in 2020, highlighting the importance of digital strategies[12]. - The company plans to continue investing in technology to enhance digital and delivery capabilities, aiming to improve operational efficiency and quality[11]. - The company sees significant growth potential in the O2O market, combining strong restaurant operations with a robust delivery network[12]. - KFC established its own delivery platform in 2010, with about 40% of its delivery sales in 2020 coming from proprietary channels[25]. - The company has implemented facial recognition payment technology in about 1,000 KFC restaurants across China by the end of 2020[23]. Financial Performance - Total revenue for 2020 was $8,263 million, a decrease from $8,776 million in 2019, representing a decline of approximately 5.9%[153]. - Net profit for 2020 was $813 million, compared to $743 million in 2019, indicating an increase of approximately 9.4%[153]. - Operating profit for 2020 was $961 million, up from $901 million in 2019, showing a growth of about 6.7%[153]. - The number of company-operated stores increased to 8,190 in 2020 from 7,355 in 2019, representing a growth of approximately 11.3%[153]. - Adjusted diluted earnings per share for 2020 was $1.53, down from $1.88 in 2019, a decrease of about 18.6%[153]. Supply Chain and Operations - The management emphasizes the importance of logistics and supply chain management in driving operational efficiency[4]. - The company operates a comprehensive supply chain management system employing over 1,300 staff, focusing on food safety, quality control, and procurement management[17]. - The company collaborates with over 800 independent suppliers, primarily located in China, ensuring compliance with food safety and quality standards[17]. - The company has established a centralized procurement model to maintain quality control and achieve better pricing through bulk purchasing[17]. - The company is simplifying menus and improving digital menu displays and self-service kiosks to drive sales growth[26]. Employee and Workplace Initiatives - As of December 31, 2020, the company employed over 400,000 staff, including approximately 136,000 full-time employees and about 270,000 part-time restaurant service members[28]. - The company provided over 8.6 million hours of training in 2020, equipping employees with operational, financial, and management knowledge[29]. - The turnover rate for restaurant managers in 2020 was 9%[29]. - The company has implemented equity incentive plans, including restricted stock units (RSUs) valued at $3,000 for restaurant managers, benefiting approximately 3,500 managers[29]. - The company has launched an employee assistance program to provide professional counseling and seminars for physical and mental health[31]. Market and Competitive Landscape - The total sales in China's food service market reached approximately $606 billion in 2020[27]. - The company faces significant competition for prime restaurant locations in the Chinese retail property market, which may hinder its ability to secure favorable lease terms[69]. - The competitive landscape in the restaurant industry is intense, with challenges in maintaining product quality, menu attractiveness, and adapting to changing consumer preferences[87]. - The company faces increasing competition from grocery stores, convenience stores, and food delivery services, which may adversely affect sales and profitability[87]. - The company’s success is heavily reliant on the brand strength and marketing efforts of YUM[49]. Risks and Challenges - The company faces significant risks related to food safety and foodborne illnesses, which could adversely affect its reputation and business operations[53]. - The company is exposed to fluctuations in raw material prices and potential shortages of food and other supplies[49]. - The company’s operations are subject to risks associated with third-party mobile payment platforms and internet service providers[49]. - The company must navigate challenges related to e-commerce and social media management[49]. - The company anticipates continued operational impacts from the COVID-19 pandemic, including potential future outbreaks and government restrictions[57]. Regulatory and Tax Considerations - The corporate income tax rate for Chinese resident enterprises is generally 25%, applicable to global income, with certain deductions allowed for reasonable expenses[40]. - Yum China does not consider itself a Chinese resident enterprise for corporate income tax purposes, which may prevent adverse tax consequences for the company and its non-Chinese shareholders[42]. - The company is subject to a 25% corporate income tax rate in China and an additional 10% withholding tax on profits remitted abroad, which may impact its financial performance[84]. - The company must comply with various regulations regarding foreign investment mergers and acquisitions, which may complicate future transactions[125]. - The company is required to submit documentation to regulatory bodies, which may lead to further scrutiny and potential delays in transaction approvals[125]. Environmental and Sustainability Efforts - The company is committed to reducing non-degradable plastic packaging weight by 30% by 2025, facing operational challenges and potential cost increases associated with sourcing alternative packaging materials[105]. - The company has implemented measures to comply with national standards aimed at reducing plastic waste, which may increase operational costs[105]. - The company faces increasing public scrutiny regarding environmental sustainability, which may lead to additional operational challenges and execution costs[105]. - The company’s ability to adapt to changing consumer preferences for healthy food is critical to its business and financial performance[89]. - The company is exploring market penetration through the establishment of more small restaurants[26]. Shareholder and Market Performance - The company’s stock may face delisting from the New York Stock Exchange if its auditor fails to meet PCAOB inspection requirements for three consecutive years[103]. - The company’s financial statements and quality may be questioned due to the lack of PCAOB inspections, potentially affecting shareholder confidence[103]. - The company’s stock performance from October 17, 2016, to December 31, 2020, showed a cumulative total return of $223, compared to an initial investment value of $100[150]. - The company paid a total of $95 million in cash dividends to shareholders in 2020, having suspended dividends in Q2 and Q3 due to the impact of COVID-19[146]. - The board has authorized a share repurchase program totaling $1.4 billion, with $692 million remaining available for future repurchases as of December 31, 2020[147].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to _________________ Commission file number 001-37762 Yum China Holdings, Inc. (Exact Name of Registrant as Specified in Its Charter) Delawa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to _________________ Commission file number 001-37762 Yum China Holdings, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware 81 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to _________________ Commission file number 001-37762 Yum China Holdings, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware 8 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |--------------------------------------------------------------------|---------------------------------------------------------------|-------------------------------------------------- ...