Core Viewpoint - The report from CMB International maintains a "Buy" rating for Yum China (09987) and raises the target price to HKD 457.48, citing faster-than-expected store expansion and better-than-expected operating profits for Pizza Hut [1] Group 1: Company Performance - Yum China is expected to continue enhancing cost-effectiveness, focusing on core areas, developing market gaps, attracting new customer segments, and capturing new demands in various scenarios [1] - The company's RGM 3.0 strategy is anticipated to further optimize efficiency [1] - Despite a cautious outlook for the mainland restaurant industry in FY2026 and FY2027, Yum China is believed to outperform its peers and provide reasonable returns to shareholders over the next 2-3 years [1] Group 2: Sales and Financial Metrics - The report indicates that KFC and Pizza Hut achieved a same-store sales recovery rate of 88% in the first ten months of 2025, significantly higher than the industry average of 70% [1] - This outperformance is attributed to the company's commitment to offering "high-quality, delicious, and value-for-money" products [1] - Yum China plans to increase dividends and has committed to using 100% of free cash flow for shareholder returns starting from FY2027, which is viewed positively by the analysts [1]

2025 年 11 月 25 日 招银国际环球市场 | 市场策略 | 招财日报 每日投资策略 公司点评 全球市场观察 公司点评 百胜中国（9987 HK/ YUMC US，买入，目标价：457.48港元/ 58.56 美元） — 2025 年投资者日点评 尽管宏观环境严峻，但我们认为百胜中国韧性十足。根据我们的测算，肯德 基与必胜客在25年前10个月的同店销售恢复率（对比2019年）高达88%， 远优于行业平均的 70%。我们认为超额表现主要归功于公司坚持提供「优质 美味且物超所值」的产品。就公司指引（26–28 财年目标）而言，我们认为 主要的超预期来自必胜客（特别在门店扩张与餐厅层面营运利润率），而肯 德基的数据则略低于预期（主要在餐厅层面营运利润率）。此外，百胜中国 提高股息以及承诺自 27 财年起将 100%自由现金流用于回馈股东，我们对此 计划感到满意。 展望未来，百胜中国不仅将持续强化性价比，更会聚焦核心（如明星产品）、 开发市场空白、吸纳新客群并捕捉不同场合的新需求。在此之上，通过执行 敬请参阅尾页之免责声明 请到彭博 (搜索代码: RESP CMBR )或 http://www.cmbi.co ...

Core Insights - The opening of the 4000th Pizza Hut store in Sanya marks a significant milestone, showcasing the brand's innovative approach combining nature, culture, and technology in the Chinese market [1] - Pizza Hut plans to add over 600 new stores annually for the next three years, aiming to exceed 6000 stores by 2028, reflecting a robust expansion strategy [1][10] Technological Advancements - The new Sanya store features an AI-driven kitchen system called "Q-Rui," which enhances operational efficiency through voice commands and automated processes, transforming the kitchen into a "food technology laboratory" [2][3] - The "Q-Rui" system addresses various operational challenges, including real-time monitoring of meal progress and proactive customer service, shifting from reactive to proactive management [3] Expansion Strategy - Pizza Hut has transitioned from a period of careful cultivation to rapid expansion, achieving remarkable growth from 3000 to 4000 stores in just two years, demonstrating a "China acceleration" [4] - The company is leveraging its mature supply chain and digital management capabilities to drive this expansion, with a focus on adapting to changing consumer trends and enhancing product value [4][9] Brand Evolution - Pizza Hut is rebranding itself from a "Western casual dining" establishment to a "pizza expert," utilizing strategic collaborations with popular IPs to engage younger consumers and enhance brand relevance [5][6] - The introduction of high-end brand PIZZERIA and the budget-friendly WOW store model illustrates Pizza Hut's dual strategy of targeting both premium and lower-tier markets [7][8] Future Goals - The company aims to achieve a total of 20,000 stores by next year and over 25,000 by 2028, with a long-term goal of surpassing 30,000 stores by 2030 [9][10] - A significant target is to double operating profits by 2029 compared to 2024, supported by a flexible store model and a focus on digitalization for efficient expansion [10]

Investment Rating - The report maintains an "Outperform the Market" rating for the social services sector [4][26]. Core Insights - The social services sector is expected to benefit from continuous government policies aimed at expanding domestic demand, leading to a potential valuation recovery during the reporting period [4][26]. - The report highlights the performance of key stocks within the sector, with notable gains from Yum China (9.53%), Kede Education (9.20%), and Jinjiang Hotels (8.99%) [14][17]. - The anticipated increase in the number of college graduates in 2026, projected to reach 12.7 million, is expected to drive demand in the education sector [19]. Summary by Sections Market Review - The consumer services sector experienced a decline of 2.03% during the reporting period but outperformed the broader market by 2.78 percentage points [13][14]. - The report period was from November 10, 2025, to November 23, 2025, with the CSI 300 index declining by 4.81% [13][14]. Industry and Company Dynamics - Sanya launched its sixth round of duty-free consumption vouchers, which will run until December 31, 2025, targeting both travelers and local residents [18]. - JD Retail has established a new prepared food division, indicating a strategic upgrade in its operations [21]. - NetEase Youdao reported a 51.1% year-on-year increase in online marketing service revenue, becoming its largest revenue source for the first time [22]. Stock Holdings Analysis - Key stocks in the Hong Kong market saw changes in holdings, with Tianli International Holdings and Gu Ming receiving increases in shareholding [25]. Investment Recommendations - The report suggests a focus on stocks such as China Duty Free Group, Huazhu Group, and Trip.com Group, among others, for potential investment [4][26]. - Mid-term recommendations include companies like Meituan, Misyue Group, and Ctrip Group, indicating a diversified investment strategy [4][26]. Key Company Earnings Forecasts - The report provides earnings per share (EPS) estimates for several companies, with China Duty Free Group projected to have an EPS of 1.91 CNY in 2025 and 2.28 CNY in 2026 [5].

Group 1 - The Hang Seng Index Company announced quarterly index review results, with adjustments to several constituent stocks, including Yum China being added to the Hang Seng China Enterprises Index with a weight of 1.21% [1] - The Hang Seng China Enterprises Index consists of 50 large-cap, liquid Chinese mainland companies listed in Hong Kong, serving as a benchmark for the performance of these enterprises [1] - The inclusion of Yum China is expected to enhance passive fund allocation and trading activity, with an estimated inflow of approximately $9 million due to its addition to the index [1] Group 2 - Yum China is the largest restaurant company in China, operating over 17,000 restaurants across six brands in more than 2,500 towns [2] - The company announced growth targets during its investor day on November 17, aiming for a total of 20,000 stores by 2026, over 25,000 by 2028, and over 30,000 by 2030 [2] - Yum China's stock price increased by over 12% from HKD 334.6 on October 31 to HKD 376.2 as of November 24 [2]

Core Insights - Pizza Hut China celebrates the opening of its 4000th store and plans to accelerate store openings, targeting over 600 new stores annually for the next three years, aiming to exceed 6000 stores by 2028 [1][2] - The CEO of Yum China emphasizes the importance of a mature RGM strategy, which includes business resilience, growth, and strategic moat, as the core guiding principles for Pizza Hut's development [1] - As of Q3 2025, Pizza Hut has achieved a 17% year-on-year increase in same-store sales for the eleventh consecutive quarter, highlighting the brand's operational stability and market strategy maturity [1] Expansion Strategy - Pizza Hut's expansion is not limited to first-tier cities but also targets lower-tier cities with the WOW store model, which has established 250 stores in over 40 previously uncovered towns [2] - The brand manager states that the company respects local consumer habits while maintaining consistency in core products and experiences, focusing on enhancing the value proposition [2] - Membership has surpassed 200 million, with delivery services being a significant growth driver, contributing to increasing sales proportions and market share [2]

Group 1 - The Hang Seng Index Company announced quarterly index review results, with adjustments to several constituent stocks, including Yum China being added to the Hang Seng China Enterprises Index with a weight of 1.21% [1] - The Hang Seng China Enterprises Index consists of 50 large-cap, liquid Chinese enterprises listed in Hong Kong, serving as a benchmark for the performance of these companies [1] - The inclusion of Yum China is expected to enhance passive fund allocation and trading activity, with an estimated inflow of approximately $9 million due to the changes [1] Group 2 - Yum China is the largest restaurant company in China, operating over 17,000 restaurants across six brands in more than 2,500 towns [2] - The company announced growth targets during its investor day on November 17, aiming to reach 20,000 stores by 2026, over 25,000 by 2028, and over 30,000 by 2030 [2] - Yum China's stock price increased by over 12% from HKD 334.6 on October 31 to HKD 376.2 as of November 24 [2] - The company became dual-listed on the Hong Kong Stock Exchange and the New York Stock Exchange, reflecting its recognition in market capitalization, liquidity, and industry representation [2]

Group 1 - The Hang Seng Index Company announced quarterly index review results, with adjustments to multiple constituent stocks, including Yum China being added to the Hang Seng China Enterprises Index with a weight of 1.21% [1] - The Hang Seng China Enterprises Index consists of 50 large-cap, liquid Chinese enterprises listed in Hong Kong, serving as a benchmark for the performance of these companies [1] - The inclusion of Yum China is expected to enhance passive fund allocation and trading activity, with an estimated inflow of approximately $9 million due to the changes [1] Group 2 - Yum China is the largest restaurant company in China, operating over 17,000 restaurants across six brands in more than 2,500 towns [2] - The company announced growth targets during its investor day on November 17, aiming for a total of 20,000 stores by 2026, over 25,000 by 2028, and over 30,000 by 2030 [2] - Yum China's stock price increased by over 12% from HKD 335 on October 31 to HKD 376.2 as of November 24 [2] - The company became a dual primary listed entity on both the Hong Kong Stock Exchange and the New York Stock Exchange, reflecting its recognition in terms of market capitalization, liquidity, and industry representation [2]

Core Insights - The rapid expansion of Pizza Hut in China, reaching its 4000th store in just over two years, highlights a significant acceleration in growth compared to the previous 33 years to reach 3000 stores [1] - The company's resilience and strategic adaptability are key factors driving this growth, as evidenced by a 17% year-on-year increase in same-store sales for eleven consecutive quarters [1][2] Group 1: Business Resilience and Strategy - The core of Yum China's strategy is business resilience, which involves quickly adjusting strategies and optimizing supply chains to ensure stable operations [1] - The multi-layered strategic moat includes cross-regional collaboration and dynamic optimization in the supply chain, balancing cost and efficiency [1] - The introduction of various store models, such as standard and WOW stores, allows for precise market coverage across different consumer segments [2] Group 2: Market Penetration and Differentiation - Pizza Hut is focusing on "deep cultivation" in lower-tier markets, successfully implementing the WOW store model in over 40 emerging towns with around 250 locations [2] - The brand emphasizes modular combinations rather than simple standardization, adapting to regional characteristics while maintaining core product standards [2] - A digital ecosystem with over 200 million members supports precise consumer trend insights and enhances repurchase rates [2] Group 3: Technological Empowerment - The integration of technology, such as smart pizza ingredient dispensers and AI management systems, significantly enhances operational efficiency [3] - Automation in pizza preparation and intelligent scheduling optimizes human resource allocation, allowing staff to focus on customer service [3] - The approach of "human-machine collaboration" is redefining service standards in the fast-food industry [3] Group 4: Long-term Vision and Social Responsibility - The launch of the "Little Red Hat Plan" for youth volunteer services reflects Pizza Hut's long-term thinking, integrating social responsibility into its business model [4] - This initiative strengthens the brand's ESG image and builds emotional connections with consumers [4][5] Group 5: Future Growth and Challenges - Pizza Hut aims to exceed 6000 stores by 2028, requiring an average annual net increase of over 600 stores [6] - The ambitious expansion plan poses high demands on supply chain management, talent acquisition, and quality control, especially in lower-tier markets [6][7] - Balancing expansion speed with store profitability will be a core challenge for the brand moving forward [6][7] Group 6: Industry Implications - The transition from scale expansion to deep operational focus serves as a transformative example for the industry [8] - The success of Pizza Hut is not solely based on store count but on building systematic operational capabilities [8] - As the Chinese restaurant industry enters a new development cycle, Pizza Hut's practices offer valuable insights for future growth strategies [8]

Core Insights - Pizza Hut China has opened its 4000th store in Sanya, Hainan, marking 35 years of operation in the Chinese market and demonstrating its commitment to growth in the region [1][3] - The company has launched the "Little Red Hat Program," a youth volunteer service initiative in collaboration with the China Volunteer Service Foundation, aimed at providing a platform for youth engagement in public welfare [1] - Pizza Hut plans to accelerate its store expansion, targeting the addition of over 600 new stores annually for the next three years, with a goal of exceeding 6000 stores by 2028 [1] Company Expansion - As of September 30, 2023, Pizza Hut has surpassed 4000 stores in China [1] - The company aims to open more than 600 new stores each year for the next three years, indicating a strong growth strategy [1] Community Engagement - The "Little Red Hat Program" will initially pilot in cities like Beijing and Shanghai, with plans for nationwide rollout [1] - The program will create volunteer service stations linked to community resources, focusing on environmental actions and community services tailored to youth [1]