The Zhitong Finance App learned that Haitong International released a research report stating that the price-earnings ratio of Yum China (09987) in 2027 will be lowered from 18.5 times to 15 times, and the target price will be lowered from HK$430.3 to HK$379.6, maintaining the “superior to the market” rating. The bank expects that the company's same stores will be under pressure in the third quarter, mainly due to weather disturbances and weak consumption, but the stock price already reflects recent operating pressure.
The bank expects the company's total revenue to be about 3.46 billion US dollars in the third quarter, up 8% year on year, up about 2.3% without exchange rate, and same-store sales fell 1%. Mainly due to the high base of takeout subsidies last year, compounded by weather effects such as summer mismatches and the East China typhoon in August, the company added promotional hedging later; it is expected that the fourth quarter will return to a slight increase as the base falls, and the same store will still fall within the 0 to 2% guidance range throughout the year.
According to the report, Yum China still had a certain margin headwind in the third quarter. Raw materials, promotions, and rider expenses are still under pressure, but rent and other expenses may offset some of the impact. The cost ratio of food and packaging is expected to be about 31.7% in the third quarter, a slight increase of 0.2 percentage points over the previous quarter; the profit margin of restaurants is about 16.1%, which is basically the same as in the second quarter; and the operating profit margin is about 11.4%. On August 7, 2026, the company completed the acquisition of the Pizza Hut brand ownership in mainland China for about 1.2 billion US dollars, terminated the annual licensing fee of about 500 million yuan. The management estimated that the corresponding profit margin would increase by about 2.8 percentage points, and immediately increase profit per share in 2026.
The bank estimates that the company's revenue from 2026 to 2028 will be $12.99 billion, $13.75 billion and US$14.60 billion, respectively, and net profit of US$974 million, $1,057 million and US$1,156 million respectively, up 4.9%, 8.5% and 9.3% year-on-year respectively.