Yum China CEO says consumers are growing more 'rational' as rising costs cut dining budgets

Core Viewpoint - Yum China CEO Joey Wat believes that the Chinese consumer has become more rational over the years, despite concerns over low consumer confidence and sluggish growth in the broader Chinese economy [1][2] Financial Performance - Yum China's shares have decreased by 27% over the past year, resulting in a market value of $17.51 billion, while its parent company, Yum Brands, has seen an 8% increase in stock value, reaching a market value of $38.87 billion [1] - In the fourth quarter, Yum China's revenue increased by 19% to $2.49 billion, driven by new store openings, and same-store sales rose by 4%, surpassing StreetAccount estimates of 3.3% [1] Consumer Behavior - The rising housing costs in top-tier cities like Shanghai and Beijing are impacting consumers' disposable income, leading to a more rational spending approach [2] - In contrast, lower-tier cities such as Chengdu are experiencing stronger sales growth due to cheaper housing and increased disposable income among consumers [2] - Yum China has a robust business model that is effective not only in top-tier cities but also in lower-tier cities, including tier five and tier six [2]