Investment Rating - Maintains a "Buy" rating with a target price of HKD 472.48 / USD 60.95 [1][6] Core Views - Yum China (YUMC) is the largest restaurant operator in China by sales, demonstrating resilience across multiple economic cycles and accelerating its expansion into the 10,000-store era [1] - The company's growth momentum is expected to strengthen with the extension of product offerings, breakthroughs in new store formats like K Coffee and Pizza Hut WOW stores, and improved cost-effectiveness [1] - The 4Q24-1Q25 period is critical for validating same-store sales resilience and marks the beginning of the second 10,000-store target [1] - Long-term growth is supported by strong corporate governance, ample cash flow, and high shareholder returns (16.5% annualized shareholder return in 9M24) [1] Same-Store Sales Resilience - Same-store sales resilience is driven by stable demand and high customer loyalty, with strategies including cost-effective products, upgraded product combinations, and reduced delivery fees [3] - Delivery sales accounted for 40% of total sales in 3Q24, up 5 percentage points year-over-year [3] - Membership sales contributed 65% of system-wide sales, with membership numbers exceeding 510 million, a 113% increase since 2019 [3] Restaurant Profitability - Cost structure optimization is key to maintaining restaurant-level profitability, with measures including improved bargaining power for raw materials, increased store manager efficiency, and optimized rental structures [3] - Sensitivity analysis shows that a 5% increase in daily sales could boost KFC and Pizza Hut store profits by 14% and 20%, respectively, with profit margins of 19.1% and 14.9%, higher than historical averages [3] Expansion Strategy - Yum China's next 10,000-store growth will come from下沉 markets,加密 existing locations, and轻资产 models [3] - KFC and Pizza Hut have significant expansion potential, with long-term store targets of over 20,000 and 5,000 stores, respectively [3] - The company is increasing加盟店比例 to leverage regional resources and accelerate expansion [3] Financial Projections - Revenue is projected to grow from USD 11,289 million in 2024E to USD 13,147 million in 2026E, with net income increasing from USD 901.16 million to USD 1,070 million over the same period [5] - EPS is expected to rise from USD 2.30 in 2024E to USD 3.04 in 2026E, with ROE remaining stable around 13% [5] Valuation and Shareholder Returns - The target price is based on a 23x PE multiple for 2025, reflecting confidence in the company's growth trajectory [4] - Yum China has a strong track record of shareholder returns, with a 16.5% annualized return in 9M24 and plans to return USD 4.5 billion to shareholders from 2024-2026 [1][29] Market Position and Competitive Advantage - Yum China benefits from its先发优势 in下沉 markets and its ability to leverage scale effects to maintain profitability [19] - The company's strong brand,供应链 capabilities, and digital transformation efforts position it well for long-term growth [1][19]
百胜中国：解构消费龙头系列：YUMC何以百胜于中国？