Analyst

Steve

Experience in both buy and sell-side in Asia.

Yum China (9987 HK/YUMC US):  Earnings Risk Materialized As 1Q24 Earnings Were Weak

Equity Bottom-Up

<ul>
<li>China's catering industry has changed compared to pre-COVID19, where overall average selling price (ASP) is continually under pressure, and customers are increasing seeking value-for-money options due to weaker consumer sentiment. </li>
<li>Yum China's same-store-sales growth could be under pressure if the company cannot raise ASP easily like in previous years.  </li>
<li>Yum China's historical valuation should not be used as a benchmark, given that the growth profile has changed (new store openings reaching a plateau; sustained increased competition; lower ASP pressure). </li>
</ul>


China's catering industry has changed compared to pre-COVID19, where overall average selling price (ASP) is continually under pressure, and customers are increasing seeking value-for-money options due to weaker consumer sentiment. 
Yum China's same-store-sales growth could be under pressure if the company cannot raise ASP easily like in previous years.  
Yum China's historical valuation should not be used as a benchmark, given that the growth profile has changed (new store openings reaching a plateau; sustained increased competition; lower ASP pressure). 


Yum China (9987 HK/YUMC US):  Earnings And Derating Risks Not Priced In

Yum China Holdings

Yum China (9987 HK/YUMC US): Earnings And Derating Risks Not Priced In