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Haidilao (6862 HK)'s Store Closures - A Fait Accompli?

Forensic Analyst

Jason Yap, CFA

Forensic Accounting

Yum China Holdings  / Forensic Accounting

<ul>
<li>Yum China opened 563 stores in the fourth quarter and 1,806 stores in all 2021, bringing its total store count to 11,788 at the end of last year</li>
<li>While the brisk rate of new store openings helped Yum China achieve revenue growth in Q4 2021, the persistent weakness in SSSG and restaurant margins are causes of concern</li>
<li>Investors should monitor whether store expansion is accompanied by a corresponding decline in key operating metrics. If so, there could be parallels with Haidilao</li>
</ul>


Yum China opened 563 stores in the fourth quarter and 1,806 stores in all 2021, bringing its total store count to 11,788 at the end of last year
While the brisk rate of new store openings helped Yum China achieve revenue growth in Q4 2021, the persistent weakness in SSSG and restaurant margins are causes of concern
Investors should monitor whether store expansion is accompanied by a corresponding decline in key operating metrics. If so, there could be parallels with Haidilao


Yum China (YUMC US) - Store Expansion Edged Revenue Growth