2024 年 8 月 7 日 百胜中国（9987.HK/YUMC.US） 坚忍不拔，再创佳绩 百胜中国 2024 年上半年收入 56.3 亿美元/+1.1%，归母净利润为 5.0 亿美元 /+3%，其中二季度收入 26.8 亿美元/+1%，归母净利润 2.1 亿美元/+8%。考虑当 下的消费环境，我们下调 24/25/26 年净利润至 8.6/9.7/10.9 亿美元。对应每 EPS 收益为 16.2/18.2/20.4 港元。维持"买入"评级，下调目标价至 376 港元， 较当前股价有 48%的上涨空间。 报告摘要 坚忍不拔，业绩保持正增长。百胜中国上半年收入 56.3 亿美元/+1.1%，归母净利润为 5.0 亿 美元/+3%，其中二季度收入 26.8 亿美元/+1%，归母净利润 2.1 亿美元/+8%。上半年核心利润 率为 11.4%/-0.1pct。系统销售额+5%，同店销售额-3%。在去年高基数的背景下依旧保持了收 入和净利润的增长。尽管同店销售略有下滑，但公司通过降本增效实现净利润的提升。截止 24 年 6 月门店数量达到 1.54 万家，上半年净新增 779 家门店，较 23 年 6 月增长 1 ...

市场从恐惧到贪婪，看起来只用一天。 3 万亿市值公司只剩苹果 肯德基开低价加盟店 Google 败诉，反垄断大战开场 腾讯、阿里继续联手投大模型 华为发布享界 S9，和北汽合作模式升级 关注《晚点财经》并设为星标，第一时间获取每日商业精华。 8 月 6 日日经 225 指数期货和韩国创业板指（KOSDAQ）涨到熔断，两国指数本身开盘后奔着收复前一 天的跌幅而去 —— 但都失败了 —— 日经 225 指数收涨 10.23%（前一天跌 12.4%)，韩国综合指数涨 3.3%（前一天跌 8.75%）。 不过指数经历一个跌停板后，需要涨 11.1% 才能回到原来点位。 3 万亿市值公司只剩苹果 今天 A 股创业板涨 1.25%、沪深 300 跌了 0.01%。北京时间下午开盘的欧洲股市没有延续亚太市场的乐 观。英国、法国、德国以及欧元区 STOXX 50 指数不同程度下跌。 经过这轮大跌之后，现在只有苹果市值还在 3 万亿美元之上 (美股 8 月 6 日开盘后一度跌破）。包括苹 果在内，全球市值前十公司（不含沙特阿美）在周一少了超过 7017 亿美元市值。不过，这些公司目前 合计市值还是较年初多了 2.86 万亿美元 ...

Investment Rating - The report maintains a "Buy" rating for Yum China, positioning it as a top choice in the restaurant industry with a target price of $38.8, indicating a potential upside of 30.2% from the current price of $29.8 [6][24]. Core Insights - Yum China's strong performance in Q2 2024 exceeded market expectations, demonstrating its robust counter-cyclical capabilities. The company has rapidly adjusted its product structure to meet consumer demand for value, leading to increased customer traffic and order volume [6][19]. - The company has implemented cost-cutting and efficiency measures to offset the negative impact of declining average transaction values on profit margins, resulting in a year-on-year increase in operating profit margin and a 4% growth in operating profit for Q2 2024 [6][19]. - The flexible pricing strategy and innovative store models, such as the Pizza Hut WOW concept, have expanded the customer base and opened up greater opportunities for store expansion in lower-tier markets [6][19]. Financial Performance Summary - For 2024, the company expects a revenue growth of 3% year-on-year, with operating profit margin stabilizing around 10% and net profit increasing in the mid-single digits [6][19]. - The financial projections indicate a revenue of $11,296 million for 2024, with a slight increase in net profit to $867 million, reflecting a 4.8% year-on-year growth [12][21]. - The report highlights a decrease in the proportion of food and packaging costs relative to revenue, which only increased by 0.8 percentage points year-on-year, while employee costs slightly decreased due to efficiency improvements [6][19]. Key Financial Metrics - Revenue for 2022 was $9,569 million, increasing to $10,978 million in 2023, with a projected revenue of $11,296 million for 2024, reflecting a year-on-year growth of 2.9% [12][21]. - The net profit for 2022 was $444 million, with a significant increase to $823 million in 2023, and a projected net profit of $867 million for 2024, indicating a growth of 4.8% [12][21]. - The report provides a forecasted PE ratio for Yum China of 14.9x for 2024, down from 16.9x in 2023, indicating a more attractive valuation [12][21].

Investment Rating - Maintains a **Buy** rating with a target price of **HKD 294.91**, based on a **15x FY25E P/E** [1] - The stock is currently trading at **13x FY25E P/E**, indicating it is not overvalued [1] Core Views - Despite weak sales growth in Q2 2024, net profit saw a significant increase, driven by cost management initiatives [1] - The report remains cautious about revenue growth in 2H24E due to high base effects and a weak macroeconomic environment [1] - Confidence in a turnaround in 4Q24E is supported by initiatives like **Project Fresh Eye**, **Project Red Eye**, and the introduction of more profitable store formats such as **K-Coffee** and **Pizza Hut's WOW model** [1] - The report expects **Q3 and Q4 sales/OP/NP growth** to be around **2%/8%/7%** and **+1%/30%/13%**, respectively [1] Sales and Profitability - Q2 2024 sales grew by **1% YoY** to **USD 2.68 billion**, below expectations, but net profit increased by **8% YoY** to **USD 212 million**, exceeding estimates [5] - **KFC's SSSG** declined by **3%** in Q2 2024, while **Pizza Hut's SSSG** fell by **8%**, though Pizza Hut's profitability outperformed KFC [5] - **Delivery sales** grew by **11%**, while **dine-in sales** declined by **3%** in Q2 2024 [5] - **FY24E net store opening target** remains at **1,500 to 1,700**, with a capital expenditure target of **USD 700-850 million** [5] Cost Management and Efficiency - **Project Red Eye** aims to improve supply chain efficiency by simplifying SKUs and reducing unnecessary items [1] - **Project Fresh Eye** focuses on reducing operational complexity, allowing store managers to focus on other tasks [1] - Increased use of **AI and automation**, with over **80% of Pizza Hut stores** equipped with automated rice cookers and **50% with robotic servers** [1] - **Labor costs** are expected to remain low, around **LSD levels** in FY24E, and **G&A expenses** are targeted at **5% of sales**, down from **5.8% in FY23** [1] Store Expansion and Formats - **K-Coffee** targets **500-600 stores** by FY24E, with **300 stores** already opened by July 2024 [1] - **Pizza Hut's WOW model** aims for **200 stores** by FY24E, with **100+ stores** opened by July 2024 [1][9] - The **WOW model** features simpler operations, targeting solo diners and value-conscious consumers, with promising initial results [10] Financial Performance and Forecasts - **FY24E revenue** is expected to grow by **1.4% YoY** to **USD 11.13 billion**, with **net profit** increasing by **5.1% YoY** to **USD 869 million** [12] - **FY25E revenue** is forecasted to grow by **9.1% YoY** to **USD 12.14 billion**, with **net profit** rising by **8.5% YoY** to **USD 943 million** [12] - **FY26E revenue** is projected to grow by **8.7% YoY** to **USD 13.19 billion**, with **net profit** increasing by **14.4% YoY** to **USD 1.08 billion** [12] Valuation and Peer Comparison - The stock is trading at a **15.4x FY24E P/E**, compared to the industry average of **28.8x** [13] - **ROE** is expected to remain stable at **11.6%** in FY24E and FY25E, increasing slightly to **11.9%** in FY26E [12] - **Dividend yield** is forecasted to increase from **1.8% in FY24E** to **2.8% in FY26E** [12] Key Initiatives and Innovations - **Pizza Hut's entry-level priced pizzas** saw double-digit growth in Q2 2024, driven by expanded price ranges and innovative new products [1] - **Single-person meals** and new store formats like **K-Coffee** and **Pizza Hut's WOW model** are expected to drive incremental sales and profit [1][9]

7 Aug 2024 CMB International Global Markets | Equity Research | Company Update Yum China (9987 HK) The best-in-class costs management in 2Q24 Sales growth was indeed a miss in 2Q24, but the net profit was a significant beat. For 2H24E, we are still very cautious about the demand and so as the level of competition. However, thanks to various efforts like Project Fresh Eye, Project Red Eye, rationalizing number of SKUs, more direct sourcing, and ramp up of more profitable store formats (e.g. K-coffee and Pizz ...

Investment Rating - The report maintains a "Buy" rating for Yum China (9987 HK) with a target price of HKD 359.30 [4][5]. Core Insights - In Q2 2024, Yum China reported a net profit of USD 212 million, exceeding previous expectations, with revenue of USD 2.68 billion, a year-on-year increase of 1% [1][2]. - The core operating profit reached USD 275 million, reflecting a year-on-year growth of 12%, with a core net profit margin of 10.0%, up 0.7 percentage points year-on-year [1][2]. - The company is focusing on enhancing its digital capabilities and optimizing operational efficiency, which is expected to strengthen growth resilience [1][3]. Summary by Sections Financial Performance - Q2 2024 revenue was USD 2.68 billion, with a year-on-year increase of 1% (4% excluding foreign currency effects) [1]. - Core operating profit was USD 275 million, up 12% year-on-year, with a core net profit margin of 10.0% [2]. - The company achieved a net profit of USD 212 million, an 8% increase year-on-year, outperforming prior forecasts [1][2]. Store Expansion and Innovation - In Q2 2024, Yum China opened 401 new stores, with 99 being franchise locations, bringing the total store count to 15,423 [3]. - The company is expanding its KFC and Pizza Hut brands, with a focus on innovative store formats like KCoffee and the WOW store model for Pizza Hut [3]. - The franchise model is enhancing penetration in remote and hub areas, with KCoffee expected to reach 500-600 locations by the end of 2024 [3]. Future Earnings Projections - EPS estimates for 2024, 2025, and 2026 are projected at USD 2.19, USD 2.42, and USD 2.71 respectively [4][6]. - The target price of HKD 359.30 is based on a 21x PE ratio for 2024, reflecting the company's strong market position and resilience [4][6].

Investment Rating - The report maintains a "Buy" rating for the company, with an expected PE ratio of 14.3X for 2024E, 13.0X for 2025E, and 11.8X for 2026E [1] Core Views - The company's 2Q24 revenue reached $2.68 billion, a 1% YoY increase (4% excluding currency impact), with core operating profit at $280 million (+12% excluding currency impact) and net profit attributable to shareholders at $210 million (+8%, +11% excluding currency impact) [1] - Store expansion supported revenue growth, with net new stores contributing 8% to system sales, while same-store sales declined by 4% due to demand pressure [1] - The company's total number of stores reached 15,423 by 2Q24, with a net increase of 401 stores in the quarter [1] - KFC's same-store sales declined by 3% in 2Q24, with a restaurant margin of 16.2% (-1.1pct, -0.6pct excluding comparable items) [1] - Pizza Hut's same-store sales declined by 8% in 2Q24, but restaurant margin improved to 13.2% (+0.8pct, +1.1pct excluding comparable items) [1] - The company returned $994 million to shareholders through dividends and buybacks in 1H24, with plans to distribute $250 million in cash dividends and $1.25 billion in buybacks for the full year 2024 [1] Financial Performance Summary - Revenue is projected to grow from $11.311 billion in 2024E to $13.483 billion in 2026E, with a CAGR of 8.78% [3] - Net profit attributable to shareholders is expected to increase from $874 million in 2024E to $1.059 billion in 2026E, with a CAGR of 9.78% [3] - ROE is forecasted to improve from 15.16% in 2024E to 18.39% in 2026E [3] - The company's P/E ratio is expected to decline from 14.31X in 2024E to 11.82X in 2026E, indicating potential undervaluation [3] Operational Highlights - KFC's K-Coffee store count increased from around 100 in March to approximately 300 by July, leveraging shared kitchen and labor resources for higher efficiency [1] - Pizza Hut's WOW stores, offering lower-priced products, expanded to over 100 locations by July, targeting cost-conscious customers [1] - The company achieved significant cost optimization through automation, labor savings, and improved management efficiency, with overall restaurant margin at 15.5% and management expense ratio at 5.0% in 2Q24 [1]

Earnings & Revenue - Adjusted earnings per share of 55 cents beat the Zacks Consensus Estimate of 47 cents by 17%, with a 17% year-over-year increase [2] - Total revenues of $2.68 billion missed the consensus mark of $2.77 billion by 3.3%, but inched up 1% year-over-year [2] - Excluding foreign currency translation, revenues increased 4% year-over-year [2] - Total system sales (excluding foreign currency translation) increased 4% year-over-year, driven by an 8% net new unit contribution [2] - KFC system sales increased 5% year-over-year, while Pizza Hut system sales increased 1% year-over-year [2] - Same-store sales reached 96% of the previous year's level, with same-store transactions growing 4% year-over-year [2] Operating Performance - Total costs and expenses amounted to $2.413 billion, compared to $2.397 billion in the prior-year quarter [3] - Restaurant margin was 15.5%, down from 16.1% a year ago [3] - Adjusted operating profit totaled $266 million, up from $259 million a year ago [3] - Adjusted net income amounted to $212 million, compared to $199 million in the prior-year quarter [3] Balance Sheet & Shareholder Returns - Cash and cash equivalents were $1.043 billion as of Jun 30, 2024, down from $1.128 billion as of Dec 31, 2023 [4] - Net inventories were $362 million, compared to $424 million as of Dec 31, 2023 [4] - The company repurchased 5.1 million shares for $187 million in the second quarter [4] - As of Jun 30, the company had $666 million available for future share repurchases under the current authorization program [4] - A quarterly cash dividend of 16 cents per common share was declared, payable on Sep 17, 2024 [4] Unit Development & Digital Performance - Yum China opened 401 net new stores in the second quarter, bringing the total restaurant count to 15,423 [5] - KFC stores totaled 10,931, while Pizza Hut stores reached 3,504 [5] - Delivery contributed approximately 38% to KFC and Pizza Hut's company sales [5] - Digital orders accounted for about 90% of total company sales, with 89% for KFC and 93% for Pizza Hut [5] - Loyalty programs of KFC and Pizza Hut grew to more than 495 million members [5] 2024 Outlook - Yum China projects net new store openings to be in the range of 1,500-1,700 [6] - Capital expenditures are projected to be between $700 million and $850 million [6] Industry Updates - The Wendy's Company reported dismal second-quarter fiscal 2024 results, with earnings and revenues missing estimates, despite solid same-restaurant sales and digital sales momentum [7] - Shake Shack Inc posted decent second-quarter fiscal 2024 results, with earnings meeting estimates and revenues beating them, driven by product innovations and strategic menu pricing [8] - The Cheesecake Factory Incorporated reported second-quarter fiscal 2024 results, with earnings beating estimates and revenues missing them, benefiting from strong demand and new restaurant openings [9]

Yum posted strong margin expansion in its second-quarter report.Shares of Yum China (YUMC 11.83%) were moving higher today after the company reported better-than-expected results in its second-quarter earnings report, overcoming consumer weakness in China.As of 11:07 a.m. ET, the stock was up 13.2%. Yum China overcomes a low barThe Chinese operator of KFC and Pizza Hut said that same-store sales were down 4% in the quarter, but overall revenue increased 1% to $2.68 billion, driven by new store openings and ...

Financial Data and Key Metrics Changes - Yum China reported record levels of revenue, operating profit, and EPS for Q2 2024, with revenue of $2.68 billion, operating profit of $266 million, and diluted EPS of $0.55, marking a 19% increase year-over-year [4][22][27] - System sales grew 4% year-over-year, following a 32% growth in the same period last year, while core operating profit increased by 12% to $275 million [4][22] - Total transactions grew by 13%, and same-store transactions increased by 4% year-over-year [22] Business Line Data and Key Metrics Changes - KFC system sales increased by 5% year-over-year, with same-store sales at 97% of prior year levels, and same-store traffic growth of 4% [24] - Pizza Hut system sales rose by 1% year-over-year, with same-store sales at 92% of the prior year level, and traffic growth of 2% [24] - K-Coffee sales exceeded RMB 1 billion in the first half of 2024, up 26% year-over-year, with nearly 120 million cups sold, a 36% increase year-over-year [11][12] Market Data and Key Metrics Changes - The Eastern Power region in China remains the most resilient, with lower-tier cities recovering faster than higher-tier cities [39] - Residential locations are more resilient, while shopping centers are approaching pre-pandemic levels [39] Company Strategy and Development Direction - The company is focusing on operational efficiency through initiatives like Project Fresh Eye and Project Red Eye, which aim to improve cost structure and supply chain efficiency [7][8][10] - New business models such as K-Coffee and Pizza Hut WOW are being emphasized, with plans to expand these concepts significantly by year-end [10][16][28] - The company aims to maintain a balanced approach to pricing strategy, focusing on driving traffic while also offering higher ticket items [68] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging market conditions but emphasizes the importance of adapting and turning challenges into opportunities [40][62] - The company expects to continue investing in value for money and product innovations to drive transaction growth [28][62] - Management remains cautiously optimistic about the second half of the year, noting that while comparisons will be easier, the operating environment remains complex [58][62] Other Important Information - The company opened a record 779 net new stores in the first half of the year, reaching a total of 15,423 stores [29][30] - Yum China plans to return $1.5 billion to shareholders, having already returned nearly $1 billion in the first half [30] Q&A Session Summary Question: Insights on new business format and store concept - Management expressed excitement about the K-Coffee and WOW models, focusing on these two concepts for the remainder of the year, with initial results being encouraging [32][33] Question: Trends in same-store sales and market tier differences - Management noted that lower-tier cities are recovering faster than higher-tier cities, with residential locations showing resilience [39][40] Question: Margin details and cost structure - Management highlighted that proactive cost structure adjustments and operational efficiency initiatives have stabilized margins, with a focus on long-term structural changes [44][46][50] Question: Pricing strategy for KFC and Pizza Hut - Management confirmed a balanced approach to pricing, with a focus on driving traffic while maintaining a steady ticket average for KFC [68] Question: Consideration of disposing small businesses - Management is continuously reviewing the portfolio of smaller businesses and will make decisions based on efficiency and resource allocation [72]