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<Research> Citi Maintains Buy on Yum China Holdings, Inc. (YUMC.US) with TP USD58.1
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Citi released a research report noting that Yum China Holdings, Inc. (YUMC.US) delivered 1Q26 results that beat expectations. The groups same-store sales were flat, slightly below market expectations for 1% growth. Benefiting from a 5% to 6% appreciation of RMB against the USD, total revenue rose 10% YoY to USD3.3 billion during the period. Operating profit increased 12% YoY, while adjusted net profit grew 6% YoY, both exceeding market expectations. By brand, KFCs same-store sales grew 1% YoY, in line with expectations, but restaurant margin declined 70 bps YoY to 19.1%, below the market forecast of 19.8%. Pizza Huts same-store sales fell 1% YoY, slightly missing expectations, while restaurant margin improved 60 bps YoY to 15%, outperforming the market estimate of 14.4%. Citi believes the variance in margin trends versus market expectations was driven by changes in Pizza Huts sales mix and the inclusion of smaller stores in same-store sales calculations. Management indicated that overall operating performance in March and so far in April has met expectations. Starting from 2027, the company plans to return an amount equivalent to about 100% of free cash flow to shareholders. Citi maintained its Buy rating on Yum China Holdings, Inc. with a TP of USD58.1. (ec/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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