Investment Rating - The investment rating for the company is "Buy" [9] Core Insights - Yum China is the largest restaurant company in China, with over 14,000 stores, significantly influencing the standardization of chain dining in the country over the past 30 years. The company has a highly professional organizational management and a relatively market-oriented ownership structure, with the parent company YUM granting substantial local authority [2][5] - The main brand supporting the company's performance is KFC, which has entered a mature development phase and is expanding its scale boundaries while maintaining a rapid store opening speed. Other brands like Pizza Hut, Taco Bell, and Lavazza are also in the process of iterative exploration [2][5] - The company's three core competitive advantages—digitalization, middle and back office efficiency, and localization—currently dominate the industry, ensuring stable performance for mature brands [7] Industry Analysis - The restaurant industry in China is a vast market with an annual revenue of approximately 5 trillion yuan, characterized by a highly fragmented structure. The top 100 restaurant companies account for only 7.7% of the total revenue. The industry maintained an annual growth rate of about 10% from 2015 to 2019, and as of 2023, monthly cumulative revenue has recovered to the levels of the same period in 2019 [14][23] - The fast food market, where KFC operates, is estimated to be around 1 trillion yuan, while the casual dining market is about 500 billion yuan. KFC holds a leading position in the fast food sector, with a market share of approximately 4.9% [17][21] - The competitive landscape is highly dispersed, with a low chain rate of less than 20% in Chinese dining compared to overseas markets. The CR5 (concentration ratio of the top five brands) in 2019 was about 3.1%, with Yum China holding around 1.4% [14][15] Financial Perspective - The company is expected to generate over 10 billion USD in revenue in 2024, with more than 90% coming from directly operated restaurants. The revenue growth rates for KFC from 2021 to 2024 are projected to be 20.31%, 3.08%, 14.14%, and 3.26% respectively [6] - The company's cost control is considered a benchmark in the industry, with strong supply chain capabilities ensuring stable core costs. It is anticipated that in normal years, the company can achieve a net profit margin of nearly 10% [6] Core Competitiveness - The company's digitalization efforts have established a strong brand presence with 400 million members, and ongoing investments in digital capabilities are expected to yield advantages in future algorithms [7] - The middle and back office operations are characterized by a smart, efficient, and agile supply chain that supports food safety, cost stabilization, and product innovation [7] - The localization strategy and brand strength have been embedded since the early management stages, allowing the company to maintain a competitive edge over its peers [7] Relative Valuation - The company's valuation has fluctuated significantly since its listing, initially receiving a 30X valuation in 2020, which increased to 50X in 2022 due to expectations of performance recovery. By 2023, the valuation returned to normal levels, reflecting a more stable growth outlook [8]

Investment Rating - The report assigns an "Accumulate" rating for the company, indicating a positive outlook based on its robust operational performance and expansion plans in lower-tier cities [5][8]. Core Insights - The company is positioned as a leading player in the Western fast-food sector in China, with a strong brand presence through its subsidiaries, including KFC and Pizza Hut. It aims to expand its store count to 20,000 by 2026, focusing on lower-tier cities to capture market share [7][10]. - The company has demonstrated strong operational cash flow and is committed to enhancing shareholder returns, with a target of $4.5 billion in shareholder returns from 2024 to 2026 [7][35]. - The report highlights the company's strategic focus on expanding its KFC and Pizza Hut brands, leveraging their established market presence and adapting to consumer preferences in lower-tier cities [10][30]. Summary by Sections Company Overview - The company, Yum China, has a rich history, being the first foreign fast-food brand to enter the Chinese market with KFC in 1987 and Pizza Hut in 1990. It operates multiple brands, including Taco Bell and Lavazza, and has a significant number of stores across various cities [19][21]. - The governance structure is market-oriented, with major shareholders being institutional investors, ensuring a clear and professional management approach [24][25]. Industry Analysis - The Western fast-food industry in China is characterized by high chain rates and market concentration, with significant growth potential in lower-tier cities. The market size is projected to reach 330 billion yuan by 2025 [42][44]. - Consumer preferences are shifting towards affordable dining options, with a notable increase in the frequency of visits to fast-food outlets, particularly in lower-tier cities [48][52]. Financial Forecast and Valuation - The company is expected to achieve revenues of $11.99 billion in 2025, with a projected net profit of $959.51 million, reflecting a growth rate of 5.3% [6][8]. - The current price-to-earnings (P/E) ratio is lower than that of comparable companies, indicating potential for valuation upside as the company expands its footprint in the fast-food sector [8][10].

Investment Rating - The investment rating for the company is "Buy" [6] Core Insights - The company reported a revenue of $11.303 billion for 2024, a year-on-year increase of 3%, and a net profit of $911 million, up 10% year-on-year. In Q4 2024, the revenue was $2.595 billion, reflecting a 4% year-on-year growth, with a net profit of $115 million, up 18% year-on-year [1][10] - The company continues to expand its store count, reaching a total of 16,395 stores by the end of 2024, with net additions of 1,751 stores for the year [2] - Same-store sales showed improvement, with a decline of only 1% in Q4 2024 compared to the same period last year, marking a continuous quarter-on-quarter improvement since Q2 2024 [3] - The company has seen significant growth in its delivery sales, which increased by 14% year-on-year in Q4 2024, and digital order revenue reached $9.6 billion, accounting for 90% of restaurant revenue [4] - The company plans to continue its store expansion, targeting an additional 1,600 to 1,800 new stores in 2025, with an increasing proportion of franchise stores [5][10] Financial Summary - For 2024, the company achieved a revenue of $11,303 million, with a year-on-year growth rate of 3% [11] - The projected revenues for 2025, 2026, and 2027 are $11,820 million, $12,655 million, and $13,639 million, respectively, with corresponding net profits of $937 million, $1,015 million, and $1,114 million [11] - The current price-to-earnings (P/E) ratios for 2025, 2026, and 2027 are projected to be 19.2x, 17.7x, and 16.2x, respectively [10][11]

Investment Rating - The report maintains a "Buy" rating for Yum China (YUMC.US/9987.HK) with a target price of $61.5, representing a potential upside of 27.1% from the current price of $48.4 [2][24]. Core Insights - Same-store sales performance is identified as a key factor influencing the company's 2025 earnings and stock price. The company anticipates a slight decline in same-store sales for 2024 due to adjustments in customer pricing to maintain steady traffic. However, operational efficiency improvements are expected to offset the negative leverage impact, allowing for slight margin expansion [1][4]. - The management's cautious outlook for 2025 reflects uncertainties in same-store performance, which is expected to significantly impact restaurant profit margins. The company aims for systematic revenue growth in the mid-single digits for 2025, with a target of opening 1,600-1,800 new stores [4][6]. - The competitive landscape is observed to be stabilizing, with some industry players reducing discounts and slightly increasing menu prices. Yum China plans to maintain stable pricing for KFC while lowering prices for Pizza Hut to attract more customers [4][11]. Financial Projections - Revenue projections for Yum China are as follows: - 2023: $10,978 million - 2024: $11,303 million (3.0% growth) - 2025: $11,720 million (3.7% growth) - 2026: $12,509 million (6.7% growth) - 2027: $13,281 million (6.2% growth) [6][9]. - Net profit estimates are projected as: - 2023: $827 million - 2024: $911 million (10.2% growth) - 2025: $924 million (1.4% growth) - 2026: $996 million (7.8% growth) - 2027: $1,099 million (10.4% growth) [6][9]. Market Performance - The current market capitalization of Yum China is approximately $18,253 million, with an average daily trading volume of $102.9 million over the past three months [2][4]. - The stock has traded within a 52-week range of $28.5 to $52.0, indicating significant volatility [2][4].

Investment Rating - The report maintains a "Buy" rating for Yum China (9987.HK / YUMC.US) and raises the target price to HKD 475.3, indicating a potential upside of 24% from the current stock price of HKD 382.8 [1][5]. Core Insights - Yum China's fourth-quarter total revenue increased by 4% year-on-year to USD 2.6 billion, with system sales also growing by 4%. Core operating profit surged by 36%, and net profit rose by 18% to USD 115 million, exceeding market expectations. For the full year, revenue reached USD 11.3 billion, a 3% increase, while net profit was USD 980 million, up 8.8% [1][2][5]. - The company has implemented efficiency improvement projects, such as Project Fresh Eye and Project Red Eye, which have started to yield positive results in operational efficiency and cost management [2][3]. Financial Performance Summary - In Q4, KFC's total revenue grew by 5% to USD 1.95 billion, with system sales also up by 5%. The core operating profit increased by 18%, and net profit was boosted by lower material costs and improved operational efficiency [3]. - Same-store sales saw a decline of 1%, but this was an improvement from a 3% decline in Q3. The total number of stores reached 16,400, a 12% increase year-on-year [2][4]. - The management expenses decreased, contributing to an increase in profit margins. The management expense ratio for Q4 was 6%, down 0.1 percentage points year-on-year [4]. Financial Projections - The report slightly raises the net profit estimates for 2025, 2026, and 2027 to USD 1.03 billion, USD 1.11 billion, and USD 1.15 billion, respectively, with corresponding EPS estimates of HKD 19.6, HKD 21.1, and HKD 21.9 [1][5]. - The projected revenue growth rates for the upcoming years are 6.57% for 2025, 6.15% for 2026, and 6.10% for 2027 [9]. Valuation Analysis - The report employs both comparable company analysis and DCF methods for valuation, concluding a target price of HKD 475.3 based on a 2025 PE of 24x and a DCF valuation suggesting a fair value of HKD 479.8 [13][17].

Investment Rating - The report maintains an "Outperform" rating for Yum China [6][20]. Core Insights - In Q4 2024, the company reported a revenue of $2.595 billion, a year-on-year increase of 4.1%, and a core operating profit growth of 35% [9][20]. - Same-store sales decline continued to narrow, with a year-on-year decrease of 1% in Q4 2024, improving from a 3% decline in Q3 2024 [11][20]. - The company plans to open 1,600 to 1,800 new stores in 2025, with an increased proportion of franchise stores [19][20]. Financial Performance - For the full year 2024, the company achieved a total revenue of $11.303 billion, representing a 3.0% increase year-on-year [9][20]. - Adjusted net profit for 2024 was $911 million, up 10.2% from the previous year, with an EPS of $2.33, reflecting an 18% year-on-year growth [9][20]. - The company’s operating profit margin improved to 12.3% in Q4 2024, an increase of 1.5 percentage points year-on-year [15][20]. Store Expansion and Strategy - In Q4 2024, the company added 534 new stores, exceeding its annual target of 1,500 to 1,700 new stores [11][20]. - The franchise ratio for new stores increased, with 30% of KFC and 13% of Pizza Hut new stores being franchises [11][20]. - The company is focusing on expanding its new store formats, including KFC Coffee and Pizza Hut WOW stores, which reached 700 and 200 locations respectively by the end of 2024 [19][20]. Market Trends - Digital order revenue reached $9.6 billion in 2024, accounting for 90% of restaurant revenue, with a stable growth in membership numbers [13][20]. - The company’s takeaway revenue grew by 14% year-on-year, maintaining a double-digit growth trend over the past decade [14][20]. Future Outlook - The company has set a target to return $3 billion to shareholders through dividends and share buybacks in 2025-2026 [19][20]. - The projected net profit for 2025 is adjusted to $978 million, with an EPS forecast of $2.76 [20].

Investment Rating - The report maintains a "Buy" rating for Yum China (9987.HK) with a current price of HKD 382.80 [1] Core Insights - The company achieved a revenue of USD 11.3 billion in 2024, a year-on-year increase of 3% (or 5% excluding foreign currency effects), and a net profit of USD 911 million, up 10% year-on-year [5] - In Q4 2024, the company reported revenue of USD 2.6 billion, a 4% increase year-on-year, and a net profit of USD 115 million, an 18% increase year-on-year [5] - The core operating profit margin for 2024 was 10.4%, an increase of 0.7 percentage points year-on-year [5] Revenue Performance - The company’s system sales in Q4 2024 increased by 4% year-on-year, with KFC and Pizza Hut growing by 5% and 3% respectively [6] - Same-store sales decreased by 1% year-on-year, with KFC and Pizza Hut declining by 1% and 2% respectively [6] - The average transaction value for KFC and Pizza Hut decreased by 4% and 10% respectively, primarily due to a shift towards lower-priced items [6] Store Expansion - In Q4 2024, the company added 534 new stores, with KFC and Pizza Hut contributing 365 and 118 new locations respectively, bringing the total to 16,395 restaurants [6] - The company plans to open 1,600 to 1,800 new stores in 2025, with a capital expenditure of approximately USD 700-800 million [6] Operational Efficiency - The restaurant profit margin for 2024 was 15.7%, a decrease of 0.6 percentage points year-on-year [7] - In Q4 2024, the restaurant profit margin improved to 12.3%, an increase of 1.6 percentage points year-on-year [7] Strategic Initiatives - Pizza Hut is undergoing a transformation to become a more mass-market brand, with a focus on menu diversification and price adjustments [8] - The introduction of the "wow" store concept has been pivotal, with over 200 locations aimed at attracting younger consumers [8] - The company is also focusing on its coffee brand, Kenuo Coffee, with plans to expand from 700 to 1,300 locations by the end of 2025 [9] Financial Forecast - The report projects net profits of USD 977 million for 2025, with an EPS of USD 2.59, and maintains a PE ratio forecast of 19x for 2025 [11][12]

Investment Rating - The report assigns a "Buy" rating for both Hong Kong and US stocks of Yum China [5] Core Views - The company reported a Q4 adjusted net profit increase of 11%, continuing its expansion and efficiency improvement efforts [3][10] - The company aims to increase its store count in 2025, targeting a net addition of 1,600 to 1,800 stores [10] - The company maintains a strong shareholder return policy, with plans for share buybacks and dividends totaling approximately $3 billion from 2025 to 2026 [10] Financial Summary - **Revenue Forecast**: Expected to grow from $10.98 billion in 2023 to $13.55 billion in 2027, with growth rates of 14.7% in 2023 and 7.1% in 2027 [4][12] - **Net Profit**: Projected to increase from $827 million in 2023 to $1.16 billion in 2027, with a growth rate of 87.1% in 2023 [4][12] - **Earnings Per Share (EPS)**: Expected to rise from $2.00 in 2023 to $3.55 in 2027 [4][12] - **Valuation Metrics**: The report estimates a price-to-earnings (P/E) ratio of 21.33 in 2023, decreasing to 13.84 by 2027 [4][12] - **Return on Equity (ROE)**: Forecasted to improve from 12.9% in 2023 to 18.8% in 2027 [4][12]

Investment Rating - The report maintains a "Buy" rating for Yum China (9987.HK) [4] Core Insights - The company achieved total revenue of $2.6 billion in Q4 2024, with a year-over-year increase of 4%. Operating profit reached $151 million, up 36% year-over-year, with an operating margin of 5.8% [1] - The growth in system sales was driven by a 5% contribution from net new stores, with a total of 534 new stores opened in Q4, bringing the total to 16,395 stores [2] - The company plans to increase the proportion of franchise stores, targeting 40-50% for KFC and 20-30% for Pizza Hut in future new openings, aiming for 1,600-1,800 net new stores and $700-800 million in capital expenditures by 2025 [3] Summary by Sections Financial Performance - Q4 system sales increased by 4% year-over-year, with same-store sales down 1%, an improvement from Q3's decline of 3%. Delivery sales grew by 14% year-over-year, accounting for 42% of restaurant revenue [2] - Q4 restaurant profit margin was 12.3%, up 1.6 percentage points year-over-year, with KFC at 13.3% and Pizza Hut at 9.3% [3] Shareholder Returns - The company has a target of returning $4.5 billion to shareholders between 2024 and 2026, with $248 million returned in Q4 and $1.5 billion for the full year 2024. A 50% increase in cash dividends to $0.24 per share has been announced [4] Earnings Forecast - Projected net profits for FY2025-2027 are $943 million, $1.011 billion, and $1.061 billion, respectively, with corresponding EPS of $2.50, $2.68, and $2.82. The P/E ratios are expected to be 20, 18, and 17 times [5]

事件 2025 年 2 月 6 日，公司公告四季报，总收入 25.95 亿美元/+4%， 核心经营利润 1.5 亿美元/剔除汇率影响+35%，经调整归母净利 1.15 亿美元/+11%（剔除汇率影响+10%），符合预期。 点评 盈利能力提升明显、新模型进展良好。4Q24 公司整体餐厅利润率 12.3%/+1.6pct，剔除 600 万美元影响餐厅可比项目后+1.8pct， 管理费用率 6.0%/-0.1pct。肯悦咖啡截至 12 月底突破 700 家，肩 并肩模式对主店销售有正向带动。必胜客 WOW 24 年末门店数增至 200 家，看好该模型在下沉市场、高线城市高竞争商圈拓展能力。 Q4 公司整体净开店 534 家，24 全年净开店 1751 家、超额完成年 初指引（1500-1700 家）。 肯德基：同店降幅环比收窄 1pct、订单均价环比稳定。Q4 肯德基 不变汇率系统销额+5%（前值+6%），同店销售额-1%（前值-2%）， 其中单量+3%（前值+1%），订单均价 38 元/-4%（前值 38 元/-3%）、 环比稳定；餐厅利润率 13.3%/+1.3pct、剔除影响可比性项目后 +1.6pct,其中 ...