Core Viewpoint - Dongwu Securities has adjusted the profit forecast for Yum China (09987) for 2026-2027 to $1.043 billion and $1.144 billion, respectively, from previous estimates of $989 million and $1.059 billion, with a new profit forecast for 2028 at $1.263 billion, reflecting year-on-year growth of 12.24%, 9.69%, and 10.41% [1] Group 1: Financial Performance - For the full year of 2025, system sales and total revenue increased by 4% each, while Q4 saw a 7% and 9% increase, respectively, exceeding previous expectations [1] - Adjusted net profit for 2025 increased by 2% year-on-year, with Q4 showing a significant 24% increase, attributed to automation systems, lean operations, and optimized raw material prices [2] - Restaurant profit margins improved, with KFC and Pizza Hut showing respective profit margin increases of 0.5 and 0.8 percentage points in 2025 [2] Group 2: Store Expansion - By the end of 2025, the total number of stores reached 18,100, with net additions of 1,706 and 587 stores for the year and Q4, respectively [3] - KFC and Pizza Hut store counts were 13,000 and 4,200, with annual net increases of 1,349 and 444 stores [3] Group 3: Same-Store Sales - Overall same-store sales increased by 1% for the full year and 3% for Q4, with KFC and Pizza Hut both showing a 1% increase in same-store sales for the year [4] - KFC's same-store sales and transaction volume increased by 3% in Q4, while Pizza Hut's same-store sales increased by 1% [4] Group 4: Future Outlook - The company anticipates exceeding 20,000 stores by 2026, with over 3,000 stores by 2030, and plans for capital expenditures of $600-700 million [5] - The company plans to return $1.5 billion to shareholders in 2025, with a dividend yield of nearly 8% [5]