Investment Rating - The investment rating for Yum China (09987.HK) is "Buy" [6] Core Insights - The company has accelerated store openings while maintaining positive same-store sales growth, demonstrating resilience even amid external challenges [5] - The overall revenue for Q3 2025 was $3.206 billion, a year-on-year increase of 4%, while the net profit attributable to shareholders was $282 million, a decrease of 5% [1][2] - The company aims for a shareholder return target of $1.5 billion for 2025, with a cumulative target of $3 billion for 2025-2026 [4] Summary by Sections Revenue and Profitability - In Q3 2025, the company reported a revenue of $3.206 billion, up 4% year-on-year, and a core operating profit of $399 million, up 8% year-on-year [1] - The net profit attributable to shareholders decreased by 5% year-on-year, primarily due to reduced interest income and investment losses related to Meituan [2] Store Expansion and Sales Performance - As of Q3 2025, the total number of stores reached 17,514, with a net addition of 536 stores in the quarter, marking a record for quarterly net store openings [1] - Same-store sales growth was positive at 1% overall, with KFC and Pizza Hut achieving 2% and 1% growth respectively [2] Digital and Delivery Growth - The company experienced a 32% year-on-year increase in delivery sales, which now account for 51% of restaurant revenue [3] - Digital orders have risen to 95% of total orders, reflecting the impact of the growth in delivery services [3] New Brand Development and Investment Optimization - The company continues to expand new brands, with KFC Coffee reaching 1,800 locations and KPRO opening over 100 locations in high-tier cities [4] - Single-store investment has been optimized, with KFC's investment per store decreasing from approximately $150,000 in 2024 to $130,000-$140,000 in Q3 2025 [4] Financial Projections - Revenue projections for 2025-2027 are $11.752 billion, $12.339 billion, and $13.187 billion respectively, with net profits expected to be $920 million, $1.002 billion, and $1.099 billion [10]

Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative price increase of over 20% compared to the benchmark index within the next six months [11][17]. Core Insights - The company reported a revenue of $2.787 billion in Q2 2025, a year-on-year increase of 4%, with operating profit reaching $304 million, up 14% year-on-year. The net profit attributable to shareholders was $215 million, with an operating profit margin of 10.9%, an increase of 1 percentage point year-on-year [5][11]. Company Overview - The latest closing price is HKD 349.20, with a total market capitalization of HKD 1,289.24 billion. The company has a total share capital of 3.69 billion shares and a debt-to-asset ratio of 42.21% [4][11]. Sales Performance - Same-store sales turned positive for the first time, with a 1% year-on-year increase. The company opened 336 new stores in Q2 2025, contributing 4% to revenue growth. The total number of stores reached 16,978 by the end of H1 2025 [6][10]. - The company’s takeout sales grew by 22% year-on-year, accounting for 45% of total restaurant revenue [7][9]. Profitability - The restaurant profit margin improved to 16.1%, a year-on-year increase of 60 basis points, while the operating profit margin reached a new high of 10.9%, up 100 basis points year-on-year. This improvement is attributed to lower raw material costs and enhanced operational efficiency [7][9]. Future Outlook - The company plans to open 1,600 to 1,800 new stores in 2025, with capital expenditures estimated at $600 to $700 million. The goal is to reach 20,000 stores by 2026, with an increasing proportion of franchise stores [10][11]. - The company is committed to innovation, including menu updates and new business models, to expand market share [10][11]. Financial Projections - Revenue growth is projected at 4.6%, 6.3%, and 5.7% for 2025, 2026, and 2027, respectively. Net profit growth is expected to be 2.2%, 11.1%, and 12.4% over the same period. The earnings per share (EPS) are forecasted to be $2.52, $2.80, and $3.15 for 2025, 2026, and 2027, respectively [11][13].