Yum China Holdings Valuation

Is 0YU undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of 0YU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 0YU (€50.42) is trading below our estimate of fair value (€83.18)

Significantly Below Fair Value: 0YU is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 0YU?

Key metric: As 0YU is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for 0YU. This is calculated by dividing 0YU's market cap by their current earnings.
What is 0YU's PE Ratio?
PE Ratio	17.9x
Earnings	US$783.00m
Market Cap	US$14.32b

0YU key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.3x
Enterprise Value/EBITDA	9.1x
PEG Ratio	1.4x

Price to Earnings Ratio vs Peers

How does 0YU's PE Ratio compare to its peers?

The above table shows the PE ratio for 0YU vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	20.9x
TUI1 TUI	7x	17.3%	€3.8b
DPZ Domino's Pizza	27.4x	5.9%	US$15.7b
SW Sodexo	16x	8.5%	€11.8b
TXRH Texas Roadhouse	33.3x	12.4%	US$13.0b
0YU Yum China Holdings	17.9x	12.3%	€14.3b

Price-To-Earnings vs Peers: 0YU is good value based on its Price-To-Earnings Ratio (17.9x) compared to the peer average (21.2x).

Price to Earnings Ratio vs Industry

How does 0YU's PE Ratio compare vs other companies in the European Hospitality Industry?

10 Companies	Price / Earnings	Estimated Growth	Market Cap

10 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: 0YU is good value based on its Price-To-Earnings Ratio (17.9x) compared to the European Hospitality industry average (18.7x).

Price to Earnings Ratio vs Fair Ratio

What is 0YU's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

0YU PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	17.9x
Fair PE Ratio	24.9x

Price-To-Earnings vs Fair Ratio: 0YU is good value based on its Price-To-Earnings Ratio (17.9x) compared to the estimated Fair Price-To-Earnings Ratio (24.9x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.