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Yum China Holdings Inc YUMC Stock Quote

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Morningstar‘s Stock Analysis YUMC

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Is it the right time to buy or sell?

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Yum China Delivers Margin Expansion Due to Accelerated Cost Cuts; Shares Undervalued

Ivan Su Senior Equity Analyst

Analyst Note

| Ivan Su |

Wide-moat Yum China's third-quarter 2022 results reinforce our view that the firm will come out of the coronavirus pandemic as a more resilient and profitable business. Sporadic lockdowns and uneven spending patterns over the past year pushed Yum China to accelerate cost cuts, resulting in a quarter of record-breaking profitability at KFC. While China's zero-tolerance policy remains the biggest near-term headwind to restaurants, the size of Yum China's off-premise business (over 60% of revenue) positions the firm to outperform its peers. We maintain our $84 (HKD 659) fair value estimate and view Yum China shares as heavily undervalued—trading at a 50% discount to our fair value estimate). Despite shares rallying by more than 10% during Hong Kong trading, we still think investors are underestimating the firm's long-term growth prospects and potential for further margin expansion.

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Key Statistics YUMC

Company Profile YUMC

Business Description

With almost 10,600 units and USD 9.5 billion in systemwide sales in 2020, Yum China is the largest restaurant chain in China. It generates revenue through its own restaurants and franchise fees. Key concepts include KFC (7,166 units) and Pizza Hut (2,355), but the company's portfolio also includes other brands such as Little Sheep, East Dawning, Taco Bell, Huang Ji Huang, COFFii & Joy, and Lavazza (collectively representing about 985 units). Yum China is a trademark licensee of Yum Brands, paying 3% of total systemwide sales to the company it separated from in October 2016.

20 Tian Yao Qiao Road, Yum China Building
Shanghai, 200030, CHN
Industry Restaurants
Employees 450,000

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FAQs for Yum China Holdings Inc Stock

No. YUMC does not currently have a forward dividend yield.
Dividend yield allows investors, particularly those interested in dividend-paying stocks, to compare the relationship between a stock’s price and how it rewards stockholders through dividends. The formula for calculating dividend yield is to divide the annual dividend paid per share by the stock price.

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YUMC’s market cap is 23.26 Bil.
Market capitalization is calculated by taking a company’s share price and multiplying it by the total number of shares. It’s often used to measure a company’s size. In the Morningstar Style Box, large-cap names account for the largest 70% of U.S. stocks, mid-cap names account for the largest 70–90%, and small-cap names are the remaining 10% of companies.

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YUMC’s stock style is Large Core.
Style is an investment factor that has a meaningful impact on investment risk and returns. Style is calculated by combining value and growth scores, which are first individually calculated.

High-growth stocks tend to represent the technology, healthcare, and communications sectors. They rarely distribute dividends to shareholders, opting for reinvestment in their businesses. More value-oriented stocks tend to represent financial services, utilities, and energy stocks. These are established companies that reliably pay dividends.

Learn more about style.

YUMC’s beta can be found in Trading Information at the top of this page.
A stock’s beta measures how closely tied its price movements have been to the performance of the overall market.

Compare YUMC’s historical performance against its industry peers and the overall market.