Investor Insights

This summary was created by AI, based on 3 opinions in the last 12 months.

Yum China Holdings Inc (YUMC-N) is viewed as a first-class operator with a rock-solid balance sheet and no debt. The company has significant net cash and a large base of digital app users, indicating strong growth potential. Experts recognize the company's unique position and believe it has a better growth outlook than most in its space. Yum China Holdings Inc is pursuing aggressive offense with excess capital to accelerate store buildout and growth. The company's exceptional management team and digital capabilities are highly regarded, and it is seen as a lower-risk way to play exceptional growth in China with western governance.

Consensus
Positive
Valuation
Undervalued
Similar
McDonald's, MCD
TOP PICK

Valuation is in the dumps. First-class operator. Rock-solid balance sheet, no debt at all. Net cash north of $2.5B. Great management team and digital capabilities. With cash so available, increased store count during distressed times. Unique, best of breed, depressed valuation of 16x adjusted earnings. 

Over 400M loyalty members on digital app, more than entire US population, which highlights just how well they can grow. Better growth outlook than almost everyone in its space. Yield is 1.6%.

(Analysts’ price target is $55.34)
food processing
TOP PICK

Spun off by Yum! Brands, so pure-play China but with western governance. Lower-risk way to play exceptional growth in China. Pristine balance sheet with more than $3B cash. Strong management. Accelerating store buildout. Amazing digital capabilities. Amazing valuation. Yield is 1%.

(Analysts’ price target is $61.78)
food processing
TOP PICK

Can play offense aggressively. About $3B in net cash on balance sheet. Used excess capital to accelerate store buildout and growth profile. Results from this won't be seen for 5-10 years. Wonderful management and best-in-class digital capabilities. Pursued vertical integration to secure product availability. Yield is 0.90%.

(Analysts’ price target is $72.92)
food processing
PAST TOP PICK
(A Top Pick Feb 16/22, Up 14%)

Exceptionally well run. Amazing digital capabilities. China is an unpenetrated market. Negatively affected by sentiment, and that's when you want to take advantage. Still holds, and would be willing to buy today.

food processing
PAST TOP PICK
(A Top Pick Dec 17/21, Up 19%) KFC, Taco Bell, Pizza Hut, plus other local brands. Wonderfully run. Beaten down by Covid and the threat of delisting. Wonderful balance sheet that can be used to accelerate growth. Valuation has gone up, so it's a hold for him instead of a buy.
food processing
PAST TOP PICK
(A Top Pick Dec 17/21, Down 9%) It's been punished by lockdowns in China. Well-run with dominant brands. They did an equity raise in Hong Kong 2 years ago, so they have a lot of cash. They've been using that to build-out their restaurants, so in 5-10 years time growth looks good. But over the short term is down.
food processing
PAST TOP PICK
(A Top Pick Aug 17/21, Down 31%) Unique business. Hit with Covid lockdowns and regulatory skirmish between US-China. Fear of delisting, though listed also in Hong Kong. Over 4B in cash to continue building out or buy back shares.
food processing
PAST TOP PICK
(A Top Pick Feb 25/21, Down 17%) Caught in regulatory shift. Building new stores. Hampered by massive lockdowns. As Covid recedes, it will benefit. Long-term demographics remain favourable. Rising disposable income, young population, and longer working hours for urbanites should increase restaurant spending. 14-15% long-term earnings growth. China is tricky, so for new clients, he's taking only partial positions.
food processing
TOP PICK
Largest restaurant operator in China. All things China have been in the penalty box. Low regulatory risk. Constrained by pandemic, Q4 results weaker than expected. Long-term compounder from growth in an unpenetrated market. Inexpensive valuation. Strong balance sheet. Yield is 0.92%. (Analysts’ price target is $61.88)
food processing
TOP PICK
A lot of negative sentiment on China, however company is largest restaurant operator in China. Lots of cash on balance sheet (over $4 billion). Great management team. Business can scale very well. 5-10 years will see exceptional growth. 320 million users of order app (exceptional).
food processing
TOP PICK
Spun off from Yum Brands. There's negativity with any Chinese shares, so it has sold off hard in the past month. It's the biggest resto operator in China with a tremendous growth profile, lots of room. They are well positioned. Forward PE is 27x and $4.3 billion on its balance sheet. After an equity issue at the end of 2020, they have capital and have room to grow. He really likes it. China is a very fragmented market. (Analysts’ price target is $72.78)
food processing
TOP PICK
Quick serve in China. Adding restaurants. Will benefit from growing middle class. Expects 13% revenue growth rate over the next several years. Yield is 0.80%. (Analysts’ price target is $67.37)
food processing
COMMENT

She has held Yum Brands for years. When it spun off Yum China, her clients acquired some Yum China shares automatically. Yum China is strictly in China. It pays royalties to Yum Brands for its KFC and Pizza Hut brands. When she invests new money, she invests in Yum Brands, not Yum China. Yum China’s stock dropped significantly today. They have a good presence in China, as a first mover in their space, but the Chinese market is very competitive. The stock price has been volatile because of rumours that the company would be taken over by a Chinese group. With the 12% drop today, this might be a good time to step in to this stock. She had confidence in the consumer in China and this is a company within that space. However, her preference is with the parent, which has exposures to other growing markets such as India and Russia, as well as China. She prefers that diversification and the simplicity of the royalty model.

food processing
RISKY

It is difficult to do business in China, and this is about half of Yum Brands (YUM-N) business. It still makes up a large chunk of their business because they are getting payments from them. Yum Brands is basically the KMC brand in China, the largest chain of restaurants in China. However, there were rumours that there were hormones in the supply of chickens, which hurt the company quite a bit, so they spun this part off with the majority of owners being Chinese. An excellent way to play the growth in China. If you can handle the risk, you will likely make some money in this.

food processing
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Yum China Holdings Inc(YUMC-N) Rating

Ranking : 4 out of 5

Bullish - Buy Signals / Votes : 1

Neutral - Hold Signals / Votes : 0

Bearish - Sell Signals / Votes : 0

Total Signals / Votes : 1

Stockchase rating for Yum China Holdings Inc is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

Yum China Holdings Inc(YUMC-N) Frequently Asked Questions

What is Yum China Holdings Inc stock symbol?

Yum China Holdings Inc is a American stock, trading under the symbol YUMC-N on the New York Stock Exchange (YUMC). It is usually referred to as NYSE:YUMC or YUMC-N

Is Yum China Holdings Inc a buy or a sell?

In the last year, 1 stock analyst published opinions about YUMC-N. 1 analyst recommended to BUY the stock. 0 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Yum China Holdings Inc.

Is Yum China Holdings Inc a good investment or a top pick?

Yum China Holdings Inc was recommended as a Top Pick by on . Read the latest stock experts ratings for Yum China Holdings Inc.

Why is Yum China Holdings Inc stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is Yum China Holdings Inc worth watching?

1 stock analyst on Stockchase covered Yum China Holdings Inc In the last year. It is a trending stock that is worth watching.

What is Yum China Holdings Inc stock price?

On 2024-02-28, Yum China Holdings Inc (YUMC-N) stock closed at a price of $43.08.