External reports (aggregated public sources), Value Investors Club

Value Investors Club

External reports (aggregated public sources)

Equity Bottom-Up

<ul><li>Yum China's stock price has decreased from $34 per share in 2017 to $30 per share currently, with an $8.7 billion enterprise value</li><li>Despite challenges like Covid and macro weaknesses in China, Yum China has shown growth in sales, EPS, and units since 2017</li><li>The stock peaked at $70 in 2021 but has struggled recently due to weak business performance, leading the author to believe the company is undervalued at 10x PE ex-cash with potential for significant returns to shareholders in the next three years</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.</em></p>

Yum China's stock price has decreased from $34 per share in 2017 to $30 per share currently, with an $8.7 billion enterprise valueDespite challenges like Covid and macro weaknesses in China, Yum China has shown growth in sales, EPS, and units since 2017The stock peaked at $70 in 2021 but has struggled recently due to weak business performance, leading the author to believe the company is undervalued at 10x PE ex-cash with potential for significant returns to shareholders in the next three yearsThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Yum China Holdings Inc (YUMC) - Wednesday, Jul 31, 2024

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>We believe Yum China remains the best long-term China catering play. 2Q24 results highlight the resiliency and agility of its business model and management to navigate tough environment.</li>
<li>While cost optimization drove bottom-line beat, we share management’s view that it is not one-off exercise but will strengthen the company’s operation efficiency moat and market leadership.</li>
<li>Macro concerns are well known and fully priced in in our view. Otherwise investors won’t have the opportunity to own the name for low double-digit P/E.</li>
</ul>


We believe Yum China remains the best long-term China catering play. 2Q24 results highlight the resiliency and agility of its business model and management to navigate tough environment.
While cost optimization drove bottom-line beat, we share management’s view that it is not one-off exercise but will strengthen the company’s operation efficiency moat and market leadership.
Macro concerns are well known and fully priced in in our view. Otherwise investors won’t have the opportunity to own the name for low double-digit P/E.


Yum China (9987 HK): The Best Long-Term China Catering Play

Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings (9987 HK)</a> reported a marginal 1% year-on-year increase in 2Q2024 revenue, driven by new store additions despite a decline in same-store sales.</li>
<li>Despite a challenging business environment, it achieved 8% year-on-year profit growth in Q2 and stabilised margins through sharp cost management and operational efficiency initiatives.</li>
<li>Without a clear visibility in improvement in consumer sentiment and spending, expect the tough operating environment to limit Yum China's revenue and profit growth potential.</li>
</ul>



Yum China Holdings (9987 HK) reported a marginal 1% year-on-year increase in 2Q2024 revenue, driven by new store additions despite a decline in same-store sales.
Despite a challenging business environment, it achieved 8% year-on-year profit growth in Q2 and stabilised margins through sharp cost management and operational efficiency initiatives.
Without a clear visibility in improvement in consumer sentiment and spending, expect the tough operating environment to limit Yum China's revenue and profit growth potential.


Yum China (9987 HK): 2Q 2024 - Market Expansion Can't Mask Macro Woes

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.</li>
<li>GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.</li>
<li>In this note, we will talk about the company’s past performance and future prospects.</li>
</ul>


Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.
GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
In this note, we will talk about the company’s past performance and future prospects.


2024 High Conviction - Giant Biogene - Growth Rate Keeps Moving Higher

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>Chinese restaurant sector could see 15% YoY revenue growth in Q1 2023, as Total Retail Sales of Meals in China rose 16.4% YoY during Jan-Feb 2023.</li>
<li>
<a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings Inc (9987 HK)</a>'s 1Q23 OP may reach a record high of $350m, and annual profitability is expected to double as restaurant footfall recovers.</li>
<li>We suggest buying Yum China for potential multiple expansion due to rapid profitability growth.</li>
</ul>


Chinese restaurant sector could see 15% YoY revenue growth in Q1 2023, as Total Retail Sales of Meals in China rose 16.4% YoY during Jan-Feb 2023.

Yum China Holdings Inc (9987 HK)'s 1Q23 OP may reach a record high of $350m, and annual profitability is expected to double as restaurant footfall recovers.
We suggest buying Yum China for potential multiple expansion due to rapid profitability growth.


Yum China: Looking Delicious with Record Profits Expected in 1Q23 and Potential for Further Growth

China

Yum China Holdings, Inc. operates chain restaurants. The Company offers pizza, entrees, pasta, rice dishes, appetizers, soups, vegetables, beverages, and desserts. Yum China Holding conducts its business worldwide.

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Yum China Holdings (YUMC US)

Yum China Holdings Inc (YUMC) - Wednesday, Jul 31, 2024

Yum China's stock price has decreased from $34 per share in 2017 to $30 per share currently, with an $8.7 billion enterprise value

Value Investors Club

Yum China (9987 HK): The Best Long-Term China Catering Play

Cost optimization driving 2Q beat is not one-off actions but long-term strategy with enduring and strategic benefits. Deflationary concerns are...

Eric Chen

Yum China (9987 HK): 2Q 2024 - Market Expansion Can't Mask Macro Woes

Unless macro economic headwinds ease, the stock - currently trading at the low end of its historical valuation range (14X P/E and 2% dividend...

Devi Subhakesan

2024 High Conviction - Giant Biogene - Growth Rate Keeps Moving Higher

Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.

Sumeet Singh

Yum China: Looking Delicious with Record Profits Expected in 1Q23 and Potential for Further Growth

Yum China's 1Q23 OP may reach a record high of $350m, and annual profitability is expected to double. Consider buying Yum China for potential...

Oshadhi Kumarasiri

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