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Investment Rating - The investment rating for the company is "Outperform" [1][3][18]. Core Views - The company is expected to benefit from frequent consumer promotion policies, and the recent share buybacks reflect management's confidence in the business [3][18]. - The company has shown resilience in same-store sales and expansion pace, with a positive adjusted net profit growth of 7% year-on-year in Q2 2024 [3][5][18]. - The company aims to achieve a revenue of $117.79 billion, $128.98 billion, and $140.98 billion for 2024, 2025, and 2026 respectively, with adjusted net profits of $8.80 billion, $9.58 billion, and $10.46 billion [3][18][22]. Financial Performance Summary - In H1 2024, the company reported revenues of $5.64 billion, a year-on-year increase of 1%, and an adjusted net profit of $499 million, up 2% [3][5]. - In Q2 2024, the company achieved revenues of $2.68 billion, also a 1% increase year-on-year, with an adjusted net profit of $212 million, reflecting a 7% increase [3][5][18]. - The company added a net of 401 new stores in Q2 2024, achieving 49% of its annual target of 1,500 to 1,700 new stores [3][5][18]. Operational Strategy - The company has implemented a cost control strategy that has positively impacted profit margins, with KFC and Pizza Hut restaurant profit margins at 16.2% and 13.2% respectively in Q2 2024 [3][5][10]. - The introduction of entry-level products and a focus on value-for-money has attracted more customers, with same-store transaction volumes increasing [11][12][18]. - The company is actively expanding into lower-tier cities, with 59% of new KFC stores and 57% of new Pizza Hut stores located in these areas [11][15][18]. Future Outlook - The company is expected to continue its positive operational trend in the second half of 2024, supported by recent consumer promotion policies [3][18]. - The projected earnings per share (EPS) for 2024-2026 are $2.30, $2.51, and $2.74, with corresponding price-to-earnings (PE) ratios of 20.1, 18.5, and 17.0 [3][18][22]. - The target price for the stock is set between HKD 411.5 and HKD 447.3, indicating a potential upside of 14% to 23.9% from the latest closing price [3][18][19].

Yum China Holdings (YUMC) shares rallied 7.2% in the last trading session to close at $38.97. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 8.3% gain over the past four weeks.Shares of Yum China appreciated after China announced significant stimulus measures, its biggest since the pandemic.This restaurant operator in China is expected to post quarterly earnings of $0.67 per share in its upcoming report, whi ...

Investors with an interest in Retail - Restaurants stocks have likely encountered both Yum China Holdings (YUMC) and Dutch Bros (BROS) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores wo ...

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and ...

It has been about a month since the last earnings report for Yum China Holdings (YUMC) . Shares have added about 1.4% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Yum China due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. Yum China Q2 Earnings Top, Revenues Lag, ...

Company Overview - As of June 30, 2024, Yum China operates 15,423 restaurants across over 2,100 cities in China, making it the largest restaurant company in the country by system sales[5]. - KFC is the leading fast-food brand in China, with 10,931 restaurants as of June 30, 2024, while Pizza Hut is the largest casual dining brand with 3,504 restaurants[5]. - The company has exclusive operating rights for KFC, Pizza Hut, and Taco Bell (pending certain milestones) in mainland China, and fully owns the intellectual property for Little Sheep and Huang Ji Huang brands[5]. - The company is exploring expansion opportunities in existing and new cities within China, indicating a strong outlook for future growth[5]. - The company has established a joint venture with Lavazza Group to explore and develop the Lavazza coffee brand concept in China[5]. Financial Performance - System sales growth for the six months ended June 30, 2024, was 5%, down from 24% in the same period of 2023[9]. - Same-store sales decreased by 3% for the six months ended June 30, 2024, compared to an increase of 11% in the same period of 2023[9]. - Operating profit for the six months ended June 30, 2024, was $640 million, a decrease of 5% from $673 million in the same period of 2023[9]. - Net profit increased by 3% to $499 million for the six months ended June 30, 2024, compared to $486 million in the same period of 2023[11]. - Total revenue for the six months ended June 30, 2024, was $5.637 billion, reflecting a 1% increase from $5.571 billion in the same period of 2023[11]. - Core operating profit for the six months ended June 30, 2024, was $671 million, an increase of 5% from $639 million in the same period of 2023[11]. - Adjusted EBITDA for the six months ended June 30, 2024, was $894 million, down from $927 million in 2023[17]. - The company reported a restaurant profit of $884 million, which is a significant increase from the previous year's profit of $967 million[19]. Shareholder Returns - The company aims to return a record $1.5 billion to shareholders through quarterly cash dividends and share repurchases[13]. - The quarterly cash dividend declared on August 5, 2024, is $0.16 per share, totaling approximately $61 million[50]. - The company repurchased approximately 21.7 million shares for $868 million and 2.1 million shares for $124 million in the six months ending June 30, 2024, and 2023 respectively[50]. Capital Expenditures and Investments - Capital expenditures are projected to be between $700 million and $850 million for fiscal year 2024[13]. - The company plans to open approximately 1,500 to 1,700 new stores in fiscal year 2024[13]. - The company generated a net cash inflow of $2.2 billion from a global issuance in September 2020, which supports future operations and capital expenditures[48]. Tax and Regulatory Matters - The company is undergoing a tax audit by Chinese tax authorities regarding transfer pricing, which may have significant implications for its financial condition and operating performance[42]. - The actual tax rate for the six months ended June 30, 2024, was 26.2%, down from 27.0% in 2023[16]. - The company anticipates potential significant developments in the next 12 months regarding the ongoing tax review and discussions with tax authorities[42]. Risk Management - The company faces foreign currency exchange rate risks, primarily due to its operations in China, which could impact reported revenues and cash flows[62]. - The company manages commodity price risks through pricing agreements with suppliers, although its ability to pass on increased costs may be limited by the competitive environment[63]. Employee and Operational Insights - The company employs around 400,000 employees, with approximately 90% being restaurant staff, and about 70% of restaurant employees working part-time[61]. - The company received temporary subsidies from the government for employee benefits and training, which were recognized as reductions in restaurant expenses[21]. Corporate Governance - The company has complied with all corporate governance code provisions during the reporting period, except for certain provisions related to the audit, compensation, and nomination committees[117]. - The company’s governance principles align with the corporate governance code as per the Hong Kong Listing Rules[117]. Future Outlook - The company plans to continue expanding its market presence and investing in new product development to drive future growth[20]. - The company is currently evaluating the potential impact of new accounting standards effective from January 1, 2024, and January 1, 2025, on its financial statements[60].

loveguli Yum China Holdings, Inc. (NYSE:YUMC) offers an attractive buying opportunity after good Q2 2024 results, and a significant cluster of insider buying activity in the days following the earning release. In this article, I will walk you through the different aspects of my investment thesis, and I will try to convey in the most direct way possible the different events that motivated my Strong Buy rating. Additionally, I will go through some of the headwinds in Q2 2024, especially their strategic ...

jetcityimage Summary Following my coverage of Yum China Holdings (NYSE:YUMC) in May'24, in which I recommended a buy rating as the business fundamentals continue to improve and I was optimistic about management’s strategy of opening new stores and growing same-store sales growth [SSSG], this post is to provide an update on my thoughts on the business and stock. I still give a buy rating for YUMC as it continues to demonstrate solid execution despite the weak macro environment, especially against peers. ...

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.Zacks Premium also includes the Zacks Style Scores.What are the Zacks Style Scores?The Zacks Style ...