YUMC - Yum China: Low Margin Of Safety Wait For A Better Entry Point
2024-04-09 04:21:17 ET
Summary
- Yum China is the largest restaurant operator in China, mainly running the KFC and Pizza Hut brands.
- The company delivered exceptional performance in Q4 2023 and for the full year, with record levels of new stores, revenue, and operating profit.
- Yum China plans to expand its network and reach 20,000 stores by 2026, with a focus on new cities and improving operational efficiency.
- At current levels, Yum China is a 'Hold' but will monitor for any weakness to start building a position.
Yum China ( YUMC ) is the China spin-off of Yum! Brands ( YUM ), and operates the KFC, Pizza Hut, Taco Bell brands, as well as Lavazza (coffee), Huang Ji Huang and Little Sheep (internally generated) brands in Mainland China.
As per the company’s introduction in their 2023 form 10-K , Yum China is the largest restaurant company in China in terms of 2023 system sales with over $11 billion of revenues in 2023 and 14,600+ restaurants, of which they operated c. 86% themselves. Yum China covers c. 2,000 cities in China and has announced further plans for expansion....
Yum China: Low Margin Of Safety, Wait For A Better Entry Point