YUM CHINA-百胜中国：跟踪报告：创新增长策略成效显著，股东回馈再加码

Investment Rating - The report maintains a "Buy" rating for Yum China (9987 HK) [3] Core Views - Yum China's Q3 2024 revenue reached $3 07 billion, up 5% YoY (or 4% at constant exchange rates), with net profit attributable to shareholders increasing by 22% YoY (or 21% at constant exchange rates) [1] - The company's same-store sales decline narrowed sequentially, with KFC and Pizza Hut showing improvements in customer traffic and pricing strategies [1][12] - Yum China has accelerated its store expansion, adding 1 217 net new stores in the first three quarters of 2024, with Q3 alone adding 438 stores [2][14] - The company has raised its shareholder return plan for 2024-2026 from$ 3 billion to $4 5 billion, reflecting a 50% increase [2][20] Store Operations and Efficiency - Yum China's restaurant-level margin remained stable at 17 0% in Q3 2024, with KFC and Pizza Hut margins at 18 3% and 12 8%, respectively [2][18] - The company has improved operational efficiency, with salary and employee benefits as a percentage of restaurant revenue decreasing by 0 2 percentage points YoY [2] - Yum China is focusing on cost optimization, with rent and other costs as a percentage of restaurant revenue decreasing by 0 4 percentage points YoY [2] Strategic Transformation - Yum China is increasing the proportion of franchised stores, with KFC and Pizza Hut aiming for 40%-50% and 20%-30% of new stores to be franchised, respectively [3][23] - The company has introduced new store models, including KFC Town Mini stores and Pizza Hut WOW stores, which have lower investment thresholds and better unit economics [3][29] - K Coffee, a high-value coffee brand, has expanded rapidly from 100 stores in March to approximately 500 stores, with plans to reach 600 stores by the end of 2024 [3][32] Financial Projections - The report raises Yum China's net profit forecasts for 2024-2026 to$ 895 million, $957 million, and$ 1 051 billion, respectively, reflecting upward revisions of 4%, 3%, and 2% [3] - The current stock price implies a forward P/E ratio of 21x, 19x, and 18x for 2024-2026, respectively [3]