Core Insights - The company reported a revenue of $3.206 billion in Q3 2025, representing a year-on-year increase of 4.4%, and an operating profit of $400 million, up 7.8%, primarily due to improved restaurant operational efficiency [1] - The net profit attributable to shareholders was $282 million, down 5.1% year-on-year, mainly due to a pre-tax investment loss of approximately $10 million [1] - The company aims to achieve a net increase of 1,600 to 1,800 stores for the year, with a total of 17,514 stores at the end of Q3 2025 [2] Financial Performance - KFC division generated $2.404 billion in revenue, up 4.0%, with an operating profit of $384 million, reflecting a 5.5% increase [1] - Pizza Hut division achieved $635 million in revenue, a 3.3% increase, and an operating profit of $57 million, up 9.6% [1] - The overall same-store sales growth was 1%, with KFC and Pizza Hut showing increases of 2% and 1%, respectively [2] Operational Efficiency - The company saw a 32% increase in delivery revenue, which now accounts for 51% of total revenue [1] - Employee benefits and salaries accounted for 26.2% of total costs, while food costs were 31.3%, and property rent was 25.2% [2] - The management fee rate improved to 4.7%, indicating ongoing efficiency enhancements [2] Brand and Market Expansion - The company added 536 new stores in Q3 2025, with a total of 1,119 new stores added in the first three quarters [2] - The membership base reached 575 million, with member sales accounting for 57% of total sales [2] - The company has expanded its innovative business formats, including over 1,800 K Coffee stores and 100 K Pro stores [3] Shareholder Returns - The company targets a shareholder return of $1.5 billion for 2025, with dividends and buybacks progressing steadily [3] - The adjusted net profit forecasts for 2025-2027 are $927 million, $993 million, and $1.066 billion, respectively [3] - The expected EPS for the same period is $2.62, $2.95, and $3.30, with corresponding PE ratios of 17.1, 15.2, and 13.6 [3]

Core Viewpoint - Guosen Securities maintains an "outperform" rating for Yum China (09987), adjusting the net profit forecast for 2025-2027 to $9.27/9.93/10.66 billion, with a slight decrease of -2.0% for 2025 and no change for the following years, while EPS is projected at $2.62/2.95/3.30 [1] Financial Performance - In Q3 2025, the company achieved revenue of $3.206 billion, a year-on-year increase of 4.4%, and operating profit of $400 million, up 7.8% year-on-year, driven by improved restaurant operational efficiency; however, net profit attributable to shareholders was $282 million, down 5.1% due to pre-tax investment losses of approximately $10 million [1] - KFC division generated revenue of $2.404 billion, up 4.0% year-on-year, with operating profit of $384 million, a 5.5% increase; operating margin was 16.0%, up 0.2 percentage points [2] - Pizza Hut division reported revenue of $635 million, a 3.3% increase, with operating profit of $57 million, up 9.6%; operating margin was 8.9%, an increase of 0.4 percentage points [2] Same-Store Sales Growth - In Q3 2025, system sales increased by 4%, with KFC and Pizza Hut growing by 5% and 4% respectively; overall same-store sales grew by 1%, maintaining resilient growth [3] - KFC's transaction volume increased by 3% year-on-year, while average transaction value decreased by 1%; Pizza Hut's average transaction value continued to decline, but transaction volume increased by 17% [3] Store Expansion - In Q3 2025, the company added 536 new stores, with a total of 1,119 new stores added in the first three quarters, maintaining a target of 1,600-1,800 new stores for the year; total store count reached 17,514 [4] - The franchise ratio for KFC and Pizza Hut reached 41% and 28% respectively, indicating a continued increase in franchise operations [4] - By the end of Q3 2025, the total number of group members reached 575 million, with member sales accounting for 57% of total sales [4] Operational Efficiency - In Q3 2025, salary and employee benefits accounted for 26.2% of total costs, up 1.1 percentage points; food costs accounted for 31.3%, down 0.4 percentage points; property rent accounted for 25.2%, down 1.0 percentage points; management fee rate was 4.7%, down 0.3 percentage points, indicating continuous improvement in efficiency [5] Innovation and Shareholder Returns - The number of K Coffee stores has exceeded 1,800, surpassing initial guidance, and the new K Pro store-in-store concept has expanded to 100 locations [6] - The target for shareholder returns in 2025 is set at $1.5 billion, with dividends and buybacks progressing steadily [6]

Core Viewpoint - Guosen Securities maintains an "outperform" rating for Yum China (09987), adjusting the net profit forecast for 2025-2027 to $9.27 billion, $9.93 billion, and $10.66 billion, with a slight adjustment of -2.0% for 2025 and no change for the following years, while considering share buybacks and projecting EPS of $2.62, $2.95, and $3.30 [1] Financial Performance - In Q3 2025, the company achieved revenue of $3.206 billion, a year-on-year increase of 4.4%, and operating profit of $400 million, up 7.8% year-on-year, driven by improved restaurant operational efficiency; however, net profit attributable to shareholders was $282 million, down 5.1% due to pre-tax investment losses of approximately $10 million [1] - KFC division revenue reached $2.404 billion, up 4.0% year-on-year, with operating profit of $384 million, a 5.5% increase; operating margin was 16.0%, up 0.2 percentage points [2] - Pizza Hut division generated revenue of $635 million, a 3.3% year-on-year increase, with operating profit of $57 million, up 9.6%; operating margin was 8.9%, an increase of 0.4 percentage points [2] Same-Store Sales Growth - In Q3 2025, system sales increased by 4%, with KFC and Pizza Hut growing by 5% and 4% respectively; overall same-store sales maintained resilient growth at 1% [3] - KFC's transaction volume increased by 3% year-on-year, while average transaction value decreased by 1%; Pizza Hut's strategy focused on high-value products, leading to a decline in average transaction value but a 17% increase in transaction volume [3] Store Expansion - In Q3 2025, the company added 536 new stores, with a total of 1,119 new stores added in the first three quarters, maintaining a full-year target of 1,600 to 1,800 new stores; total store count reached 17,514 [4] - The franchise ratio for KFC and Pizza Hut reached 41% and 28% respectively, indicating a continued increase in franchise operations [4] - By the end of Q3 2025, the total number of group members reached 575 million, with member sales accounting for 57% of total sales [4] Operational Efficiency - In Q3 2025, salary and employee benefits accounted for 26.2% of total costs, up 1.1 percentage points; food costs accounted for 31.3%, down 0.4 percentage points; property rent accounted for 25.2%, down 1.0 percentage points; management fee rate was 4.7%, down 0.3 percentage points, indicating continuous improvement in efficiency [5] Innovation and Shareholder Returns - The number of K Coffee stores has exceeded 1,800, surpassing initial guidance, and the new K pro store-in-store concept has expanded to 100 locations; the shareholder return target for 2025 is set at $1.5 billion, with dividends and buybacks progressing steadily [6]