NYSE:YUMC

Stock Analysis Report

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Executive Summary

Yum China Holdings, Inc. owns, operates, and franchises restaurants in China.

Rewards

Earnings are forecast to grow 29.34% per year

Risk Analysis

No risks detected for YUMC from our risk checks.


Snowflake Analysis

Flawless balance sheet with high growth potential.


Similar Companies

Share Price & News

How has Yum China Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: YUMC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.1%

YUMC

6.1%

US Hospitality

0.5%

US Market


1 Year Return

23.4%

YUMC

-18.0%

US Hospitality

18.7%

US Market

Return vs Industry: YUMC exceeded the US Hospitality industry which returned -17.6% over the past year.

Return vs Market: YUMC exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

YUMCIndustryMarket
7 Day2.1%6.1%0.5%
30 Day3.8%5.5%4.9%
90 Day15.5%24.7%19.8%
1 Year24.5%23.4%-16.3%-18.0%21.2%18.7%
3 Year51.1%47.0%-10.7%-16.7%46.2%36.8%
5 Yearn/a9.9%-1.8%85.3%65.1%

Price Volatility Vs. Market

How volatile is Yum China Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Yum China Holdings undervalued compared to its fair value and its price relative to the market?

40.38x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: YUMC ($54.45) is trading above our estimate of fair value ($49.11)

Significantly Below Fair Value: YUMC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: YUMC is poor value based on its PE Ratio (40.4x) compared to the US Hospitality industry average (31.4x).

PE vs Market: YUMC is poor value based on its PE Ratio (40.4x) compared to the US market (19.2x).


Price to Earnings Growth Ratio

PEG Ratio: YUMC is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: YUMC is overvalued based on its PB Ratio (6.4x) compared to the US Hospitality industry average (2.1x).


Next Steps

Future Growth

How is Yum China Holdings forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

29.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: YUMC's forecast earnings growth (29.3% per year) is above the savings rate (2.2%).

Earnings vs Market: YUMC's earnings (29.3% per year) are forecast to grow faster than the US market (24.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: YUMC's revenue (13% per year) is forecast to grow faster than the US market (9.5% per year).

High Growth Revenue: YUMC's revenue (13% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: YUMC's Return on Equity is forecast to be high in 3 years time (21.2%)


Next Steps

  • Explore growth companies in the Consumer Services industry.

Past Performance

How has Yum China Holdings performed over the past 5 years?

11.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: YUMC has high quality earnings.

Growing Profit Margin: YUMC's current net profit margins (6.3%) are lower than last year (7.9%).


Past Earnings Growth Analysis

Earnings Trend: YUMC's earnings have grown by 11.9% per year over the past 5 years.

Accelerating Growth: YUMC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: YUMC had negative earnings growth (-25.1%) over the past year, making it difficult to compare to the Hospitality industry average (-48.3%).


Return on Equity

High ROE: YUMC's Return on Equity (16.2%) is considered low.


Next Steps

Financial Health

How is Yum China Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: YUMC's short term assets ($2.3B) exceed its short term liabilities ($1.7B).

Long Term Liabilities: YUMC's short term assets ($2.3B) exceed its long term liabilities ($2.0B).


Debt to Equity History and Analysis

Debt Level: YUMC is debt free.

Reducing Debt: YUMC has no debt compared to 5 years ago when its debt to equity ratio was 0.03%.

Debt Coverage: YUMC has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: YUMC has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Yum China Holdings's current dividend yield, its reliability and sustainability?

0.84%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate YUMC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate YUMC's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if YUMC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if YUMC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: YUMC is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of YUMC's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.6yrs

Average management tenure


CEO

Joey Wat (49 yo)

2.42yrs

Tenure

US$12,170,001

Compensation

Ms. Joey Wat has been the Chief Executive Officer of Yum China Holding, Inc since March 1, 2018 and has served as its President and Chief Operating Officer since February 7, 2017 until February 2018 and se ...


CEO Compensation Analysis

Compensation vs Market: Joey's total compensation ($USD12.17M) is about average for companies of similar size in the US market ($USD11.31M).

Compensation vs Earnings: Joey's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Joey Wat
CEO & Director2.42yrsUS$12.17m0.015%
$ 3.1m
Ka Wai Yeung
Chief Financial Officer0.83yrUS$2.00mno data
Aiken Yuen
Chief People Officer2.42yrsUS$2.14mno data
Danny Tan
Chief Supply Chain Officer3.83yrsUS$3.36m0.0065%
$ 1.3m
Xueling Lu
Controller & Principal Accounting Officer2.58yrsno datano data
Leila Zhang
Chief Technology Officerno datano data0.00070%
$ 143.7k
Christie Ju
Vice President of Finance & Investor Relationsno datano datano data
W. K. Chan
Chief Legal Officer1.17yrsno datano data
Alice Wang
Chief Public Affairs Officer3.42yrsno data0.0022%
$ 451.7k
Steven Li
Chief Marketing Officerno datano datano data
Sunny Sun
Chief Growth Officer3.83yrsno datano data
Angela Ai
Chief Development Officer3.83yrsno data0.0014%
$ 285.4k

2.6yrs

Average Tenure

50.5yo

Average Age

Experienced Management: YUMC's management team is considered experienced (2.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Joey Wat
CEO & Director2.42yrsUS$12.17m0.015%
$ 3.1m
Christian L. Campbell
Independent Director3.83yrsUS$305.00k0.016%
$ 3.3m
Peter A. Bassi
Independent Director3.83yrsUS$275.00k0.015%
$ 3.1m
Edouard Ettedgui
Independent Director3.83yrsUS$275.00k0.0075%
$ 1.5m
Tung-Jung Hsieh
Independent Director3.83yrsUS$217.71k0.016%
$ 3.2m
Rong Lu
Independent Director3.83yrsUS$295.00k0.0085%
$ 1.7m
Zuliu Hu
Independent Non-Executive Chairman3.75yrsUS$515.00k0.0086%
$ 1.8m
Zili Shao
Independent Director3.83yrsUS$290.00k0.0074%
$ 1.5m
Yang Wang
Independent Director3.08yrsUS$275.00k0.0066%
$ 1.3m
Yiu Cheong Chan
Independent Director3.83yrsUS$217.71k0.0074%
$ 1.5m
Cyril Han
Independent Director1.25yrsUS$275.00k0.0033%
$ 673.5k

3.8yrs

Average Tenure

57yo

Average Age

Experienced Board: YUMC's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Yum China Holdings, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Yum China Holdings, Inc.
  • Ticker: YUMC
  • Exchange: NYSE
  • Founded: 2016
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: US$20.534b
  • Shares outstanding: 377.11m
  • Website: https://www.yumchina.com

Number of Employees


Location

  • Yum China Holdings, Inc.
  • Yum China Building
  • 20 Tian Yao Qiao Road
  • Shanghai
  • 200030
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
YUMCNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 2016
0YUDB (Deutsche Boerse AG)YesCommon StockDEEUROct 2016
YUMC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 2016
0M30LSE (London Stock Exchange)YesCommon StockGBUSDOct 2016

Biography

Yum China Holdings, Inc. owns, operates, and franchises restaurants in China. The company operates in two segments, KFC and Pizza Hut. It operates restaurants under the KFC, Pizza Hut, Taco Bell, East Dawn ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/14 12:49
End of Day Share Price2020/08/13 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.