Core Viewpoint - Dongwu Securities has adjusted the profit forecast for Yum China (09987) for 2026-2027 to $10.43 billion and $11.44 billion, respectively, from previous estimates of $9.89 billion and $10.59 billion, with a new profit forecast for 2028 at $12.63 billion, reflecting year-on-year growth of 12.24%, 9.69%, and 10.41% [1] Group 1: Financial Performance - In 2025, the total system sales and total revenue increased by 4% year-on-year, with Q4 showing 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 improved raw material prices [2] - The operating profit for KFC in 2025 increased by 8% year-on-year, while for Pizza Hut, it rose by 19%, with restaurant profit margins improving for both brands [2] Group 2: Store Expansion - By the end of 2025, the total number of stores reached 18,100, with a net addition of 1,706 stores for the year, including 1,349 KFC stores and 444 Pizza Hut stores [3] Group 3: Same-Store Sales - Overall same-store sales increased by 1% for 2025, with Q4 showing a 3% increase, marking three consecutive quarters of positive year-on-year growth [4] - KFC's same-store sales for Q4 increased by 3%, while Pizza Hut's same-store sales showed a 1% increase, indicating a focus on value products [4] Group 4: Future Outlook - The company plans to exceed 20,000 stores by 2026, with a capital expenditure of $6-7 billion and a shareholder return of $1.5 billion in 2025 [5] - The dividend yield is projected to be nearly 8%, with a significant portion of new stores being franchise locations [5]