Investment Rating - The report maintains a "Buy" rating for Yum China (9987.HK) with a current price of HKD 382.80 [1] Core Insights - The company achieved a revenue of USD 11.3 billion in 2024, a year-on-year increase of 3% (or 5% excluding foreign currency effects), and a net profit of USD 911 million, up 10% year-on-year [5] - In Q4 2024, the company reported revenue of USD 2.6 billion, a 4% increase year-on-year, and a net profit of USD 115 million, an 18% increase year-on-year [5] - The core operating profit margin for 2024 was 10.4%, an increase of 0.7 percentage points year-on-year [5] Revenue Performance - The company’s system sales in Q4 2024 increased by 4% year-on-year, with KFC and Pizza Hut growing by 5% and 3% respectively [6] - Same-store sales decreased by 1% year-on-year, with KFC and Pizza Hut declining by 1% and 2% respectively [6] - The average transaction value for KFC and Pizza Hut decreased by 4% and 10% respectively, primarily due to a shift towards lower-priced items [6] Store Expansion - In Q4 2024, the company added 534 new stores, with KFC and Pizza Hut contributing 365 and 118 new locations respectively, bringing the total to 16,395 restaurants [6] - The company plans to open 1,600 to 1,800 new stores in 2025, with a capital expenditure of approximately USD 700-800 million [6] Operational Efficiency - The restaurant profit margin for 2024 was 15.7%, a decrease of 0.6 percentage points year-on-year [7] - In Q4 2024, the restaurant profit margin improved to 12.3%, an increase of 1.6 percentage points year-on-year [7] Strategic Initiatives - Pizza Hut is undergoing a transformation to become a more mass-market brand, with a focus on menu diversification and price adjustments [8] - The introduction of the "wow" store concept has been pivotal, with over 200 locations aimed at attracting younger consumers [8] - The company is also focusing on its coffee brand, Kenuo Coffee, with plans to expand from 700 to 1,300 locations by the end of 2025 [9] Financial Forecast - The report projects net profits of USD 977 million for 2025, with an EPS of USD 2.59, and maintains a PE ratio forecast of 19x for 2025 [11][12]
百胜中国：2024年年报点评：24Q4利润增长显著，必胜客迎拐点