olivLaw · US equity research
Yum China Holdings, Inc. YUMC
Retail-Eating Places · SIC 5812 · Vertical: Retail-Eating Places (SIC 5812)
Yum China is the largest restaurant company in China, built around the KFC and Pizza Hut brands, and it reported revenues of 11.8 billion USD in 2025 from 18,101 restaurants. By June 2026 the network had grown to 19,297 restaurants, and the company announced it is acquiring the Pizza Hut brand for mainland China.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 04 Nov 2026, Yum China Holdings, Inc. (YUMC) stock was 49.68 USD (+3.82% on the day), with market capitalisation 17.0 bn USD, P/E 18.3 on diluted EPS of 2.72 USD over the last 12 months, dividend yield 2.13%, beta 0.55, 52-week range 39.98–57.95 USD. Latest reported quarter (Q2 2026): revenue of 3.1 bn USD (+12.6% YoY), net income of 244.0 m USD (+13.5% YoY), diluted EPS 0.70 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
Loading chart…
Technical reading
- RSI (14)
- 78.2
- overbought (≥ 70)
- Bollinger (20, 2)
- 41.39 – 48.46
- above the upper band · %B 1.17 · band width 15.7%
- SMA 50 / 200
- 43.34 / 46.84
- mixed trend
- MACD (12, 26, 9)
- 1.32 / 0.85
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | +23.4% | −1.1% | +24.5 pp | — |
| 3 months | +4.6% | −0.5% | +5.0 pp | — |
| 6 months | +2.0% | +4.4% | −2.4 pp | — |
| Year to date | +4.1% | +12.3% | −8.3 pp | — |
| 1 year | +10.8% | +13.5% | −2.7 pp | +8.3% |
| 3 years | +9.5% | +76.4% | −66.9 pp | −20.1% |
| 5 years | −12.9% | +63.7% | −76.5 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q2 2026 · 30 Jun 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 3.1 bn | 2.6 bn | 3.0 bn | 2.8 bn | 3.2 bn | 2.8 bn | 3.3 bn | 3.1 bn |
| Operating income | 371.0 m | 151.0 m | 399.0 m | 304.0 m | 400.0 m | 187.0 m | 447.0 m | 348.0 m |
| Depreciation & amortisation | 120.0 m | 121.0 m | 109.0 m | 110.0 m | 114.0 m | 115.0 m | 117.0 m | 120.0 m |
| Pre-tax income | 436.0 m | 170.0 m | 428.0 m | 311.0 m | 413.0 m | 206.0 m | 452.0 m | 354.0 m |
| Income tax | 119.0 m | 47.0 m | 119.0 m | 80.0 m | 114.0 m | 56.0 m | 123.0 m | 92.0 m |
| Net income | 297.0 m | 115.0 m | 292.0 m | 215.0 m | 282.0 m | 140.0 m | 309.0 m | 244.0 m |
| Diluted EPS | 0.77 | 0.30 ≈ | 0.77 | 0.58 | 0.76 | 0.39 ≈ | 0.87 | 0.70 |
| Operating cash flow | 409.0 m ≈ | 167.0 m | 452.0 m | 412.0 m ≈ | 477.0 m ≈ | 125.0 m | 550.0 m | 426.0 m ≈ |
| Capex | 165.0 m ≈ | 182.0 m | 137.0 m | 122.0 m ≈ | 126.0 m ≈ | 241.0 m | 144.0 m | 127.0 m ≈ |
| Dividends paid | 61.0 m ≈ | 61.0 m | 90.0 m | 90.0 m ≈ | 88.0 m ≈ | 85.0 m | 102.0 m | 101.0 m ≈ |
| Share repurchases | 188.0 m ≈ | 192.0 m | 173.0 m | 195.0 m ≈ | 324.0 m ≈ | 452.0 m | 218.0 m | 312.0 m ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 9 percentile of its own 35-quarter history (min 14.9, median 26.1, max 52.3; quarters with earnings only).
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 8.4 bn | 8.8 bn | 8.3 bn | 9.9 bn | 9.6 bn | 11.0 bn | 11.3 bn | 11.8 bn |
| Revenue YoY | +8.3% | +4.3% | −5.8% | +19.2% | −2.9% | +14.7% | +3.0% | +4.4% |
| Net income | 708.0 m | 713.0 m | 784.0 m | 990.0 m | 442.0 m | 827.0 m | 911.0 m | 929.0 m |
| Net income YoY | +77.9% | +0.7% | +10.0% | +26.3% | −55.4% | +87.1% | +10.2% | +2.0% |
| Diluted EPS | 1.79 | 1.84 | 1.95 | 2.28 | 1.04 | 1.97 | 2.33 | 2.51 |
| Diluted EPS YoY | +79.0% | +2.8% | +6.0% | +16.9% | −54.4% | +89.4% | +18.3% | +7.7% |
| net % | 8.4% | 8.1% | 9.5% | 10.0% | 4.6% | 7.5% | 8.1% | 7.9% |
| Free cash flow | 863.0 m | 750.0 m | 695.0 m | 442.0 m | 734.0 m | 763.0 m | 714.0 m | 840.0 m |
Reported results vs expectations
Loading…
Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 506.0 m USD
- Financial debt
- 30.0 m USD
- Net debt
- -476.0 m USD
- Equity
- 6.1 bn USD
- Total assets
- 10.8 bn USD
- Debt / equity
- 0.00x
- Current ratio
- 1.05x
- ROE
- 14.8%
- ROA
- 8.5%
- FCF margin
- 7.1%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 8.3 bn | 9.9 bn | 9.6 bn | 11.0 bn | 11.3 bn | 11.8 bn | SEC (XBRL)· 27 Feb 2026verified |
| Research & development | 3.0 m | 6.0 m | 6.0 m | 6.0 m | 6.0 m | 8.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Operating income | 961.0 m | 1.4 bn | 629.0 m | 1.1 bn | 1.2 bn | 1.3 bn | SEC (XBRL)· 27 Feb 2026verified |
| Depreciation & amortisation | 450.0 m | 516.0 m | 602.0 m | 453.0 m | 476.0 m | 448.0 m | SEC (XBRL)· 27 Feb 2026verified |
| EBITDA | 1.4 bn ≈ | 1.9 bn ≈ | 1.2 bn ≈ | 1.6 bn ≈ | 1.6 bn ≈ | 1.7 bn ≈ | SEC (XBRL)· 27 Feb 2026derived |
| Pre-tax income | 1.1 bn | 1.4 bn | 687.0 m | 1.2 bn | 1.3 bn | 1.4 bn | SEC (XBRL)· 27 Feb 2026verified |
| Income tax | 295.0 m | 369.0 m | 207.0 m | 329.0 m | 356.0 m | 369.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Net income | 784.0 m | 990.0 m | 442.0 m | 827.0 m | 911.0 m | 929.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Diluted EPS | 1.95 | 2.28 | 1.04 | 1.97 | 2.33 | 2.51 | SEC (XBRL)· 27 Feb 2026verified |
| Weighted average diluted shares | 402.0 m | 434.0 m | 425.0 m | 420.0 m | 390.0 m | 371.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Dividend per share | 0.24 | 0.48 | 0.48 | 0.52 | 0.64 | 0.96 | SEC (XBRL)· 27 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 1.2 bn | 1.1 bn | 1.1 bn | 1.1 bn | 723.0 m | 506.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Receivables | 99.0 m | 67.0 m | 64.0 m | 68.0 m | 79.0 m | 95.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Inventories | 398.0 m | 432.0 m | 417.0 m | 424.0 m | 405.0 m | 438.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Current assets | 4.9 bn | 4.7 bn | 3.9 bn | 3.4 bn | 2.7 bn | 2.4 bn | SEC (XBRL)· 27 Feb 2026verified |
| Property, plant & equipment, net | 1.8 bn | 2.3 bn | 2.1 bn | 2.3 bn | 2.4 bn | 2.5 bn | SEC (XBRL)· 27 Feb 2026verified |
| Goodwill | 832.0 m | 2.1 bn | 2.0 bn | 1.9 bn | 1.9 bn | 2.0 bn | SEC (XBRL)· 27 Feb 2026verified |
| Intangibles (excl. goodwill) | 246.0 m | 272.0 m | 159.0 m | 150.0 m | 144.0 m | 148.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Total assets | 10.9 bn | 13.2 bn | 11.8 bn | 12.0 bn | 11.1 bn | 10.8 bn | SEC (XBRL)· 27 Feb 2026verified |
| Accounts payable | 708.0 m | 830.0 m | 727.0 m | 786.0 m | 801.0 m | 793.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Short-term debt | — | — | 2.0 m | 168.0 m | 127.0 m | 30.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Current liabilities | 2.1 bn | 2.4 bn | 2.2 bn | 2.4 bn | 2.3 bn | 2.2 bn | SEC (XBRL)· 27 Feb 2026verified |
| Total liabilities | 4.4 bn | 5.3 bn | 4.7 bn | 4.9 bn | 4.7 bn | 4.7 bn | SEC (XBRL)· 27 Feb 2026verified |
| Equity | 6.5 bn | 7.9 bn | 7.1 bn | 7.1 bn | 6.4 bn | 6.1 bn | SEC (XBRL)· 27 Feb 2026verified |
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 1.1 bn | 1.1 bn | 1.4 bn | 1.5 bn | 1.4 bn | 1.5 bn | SEC (XBRL)· 27 Feb 2026verified |
| Capex | 419.0 m | 689.0 m | 679.0 m | 710.0 m | 705.0 m | 626.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Free cash flow | 695.0 m ≈ | 442.0 m ≈ | 734.0 m ≈ | 763.0 m ≈ | 714.0 m ≈ | 840.0 m ≈ | SEC (XBRL)· 27 Feb 2026derived |
| Investing cash flow | -3.1 bn | -855.0 m | -522.0 m | -743.0 m | -178.0 m | -5.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Financing cash flow | 2.1 bn | -313.0 m | -844.0 m | -716.0 m | -1.6 bn | -1.7 bn | SEC (XBRL)· 27 Feb 2026verified |
| Dividends paid | 95.0 m | 203.0 m | 202.0 m | 216.0 m | 248.0 m | 353.0 m | SEC (XBRL)· 27 Feb 2026verified |
| Share repurchases | 8.0 m | 75.0 m | 466.0 m | 613.0 m | 1.2 bn | 1.1 bn | SEC (XBRL)· 27 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 78 / 100
A scoring methodology on indicators and valuation, not investment advice.
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 17.0 bn USD
Key indicators
Coverage and freshness
Score by group
- Valuation69
- Returns100
- Quality82
- Balance sheet72
- Growth80
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 12.62 – 91.08 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)unavailable · input data missing
- Peers: EV/EBITDA39.83 – 90.10 (Mid 56.48)21 companies used · median multiple 10.2x · quartiles 7.2x – 16.5xARCO, ARMK, BJRI, BLMN, CAKE, CBRL, DRI, FWRG, LOCO, MCD, NDLS, PLAY, PTLO, PZZA, QSR, RICK, RRGB, STKS, TXRH, WING, YUM
- Peers: P/E46.71 – 91.08 (Mid 71.34)20 companies used · median multiple 26.3x · quartiles 17.2x – 33.5xARCO, ARMK, BJRI, BLMN, CAKE, CBRL, CMG, DRI, EAT, FWRG, JACK, LOCO, MB, MCD, PTLO, PZZA, QSR, TXRH, WING, YUM
- Dividend discount (DDM)12.62 – 16.97 (Mid 14.47)
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Neutral profile · Score 78/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 17.5% | 74 (vs peers) | 11% |
| Net margin · Quality | 7.8% | 82 (vs peers) | 7% |
| FCF conversion · Quality | 96.4% | 95 (on a fixed band) | 7% |
| Revenue CAGR 3Y · Growth | 7.2% | 60 (on a fixed band) | 9% |
| EPS CAGR 3Y · Growth | 34.1% | 100 (on a fixed band) | 9% |
| Net debt / EBITDA · Balance sheet | -0.2x | 95 (vs peers) | 11% |
| Interest coverage · Balance sheet | unavailable | unavailable | — |
| Current ratio · Balance sheet | 1.0x | 14 (on a fixed band) | 4% |
| P/E (TTM) · Valuation | 18.3x | 75 (vs peers) | 11% |
| EV/EBITDA · Valuation | 9.0x | 64 (vs peers) | 11% |
| FCF yield · Valuation | 5.5% | 69 (on a fixed band) | 9% |
| Shareholder yield (distributions) · Returns | 9.9% | 100 (on a fixed band) | 7% |
| Payout ratio (FCF) · Returns | 40.0% | 100 (on a fixed band) | 4% |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet72/100 · 2/3 factors with a value
- Growth80/100 · 2/2 factors with a value
- Quality82/100 · 3/3 factors with a value
- Returns100/100 · 2/2 factors with a value
- Valuation69/100 · 3/3 factors with a value
Memo
Yum China Holdings, Inc. (YUMC). Latest full fiscal year: 2025; data up to 2026-06-30.
Figures computed from the financial statements: revenue 11.8 bn USD in 2025; YoY growth 4.4%; net margin 7.8%; ROE 17.5%; net debt/EBITDA -0.2x.
The estimated value range is 39.83–90.10 USD per share (median of 3 methods, agreement: low); assumptions are illustrative. Against the central value of 56.48 USD, the price of 49.68 USD leaves a potential of 13.7% (value / price − 1) and a margin of safety of 12.0% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 78/100, methodological classification: neutral profile (score, margin of safety and method agreement together; not a judgement of the right price). Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- ROIC: 17.5%
- Net margin: 7.8%
- FCF conversion: 96.4%
- EPS CAGR 3Y: 34.1%
- Net debt / EBITDA: -0.2x
- P/E (TTM): 18.3x
- Shareholder yield (distributions): 9.9%
- Payout ratio (FCF): 40.0%
What contradicts it
- Current ratio: 1.0x
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): Interest coverage.
Versus the vertical median
Retail-Eating Places (SIC 5812) · same industry (4-digit SIC) · compared with 39 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| MCDMcDONALD’S CORPORATION | 198.3 bn | 0.0 | — | 31.7% | +3.7% | −10% / −1% |
| YUMYum! Brands, Inc. | 45.4 bn | 20.9 | — | 25.4% | +8.8% | +9% / +32% |
| CMGChipotle Mexican Grill, Inc. | 44.5 bn | 32.9 | 48.5% | 10.8% | +5.4% | +2% / −20% |
| DRIDarden Restaurants, Inc. | 26.1 bn | 22.5 | 55.1% | 8.8% | +9.4% | +28% / +47% |
| QSRRestaurant Brands International Inc. | 24.8 bn | 18.2 | 53.8% | 20.1% | +12.2% | +8% / +10% |
| YUMCYum China Holdings, Inc. | 17.0 bn | 18.3 | 17.5% | 7.8% | +4.4% | +11% / +9% |
| ARMKAramark | 13.8 bn | 36.7 | 11.8% | 1.9% | +6.4% | +41% / +87% |
| TXRHTexas Roadhouse, Inc. | 12.9 bn | 31.3 | 28.1% | 6.8% | +9.4% | +12% / +75% |
| EATBrinker International, Inc. | 9.2 bn | 19.4 | 134.7% | 8.4% | +7.9% | +43% / +512% |
| CAVACAVA Group, Inc. | 7.2 bn | 109.3 | 8.3% | 4.8% | +22.4% | +27% / +82% |
| HDLSuper Hi International Holding Ltd. | 6.4 bn | 247.5 | 6.9% | 2.8% | +13.4% | −46% / unavailable |
| CAKEThe Cheesecake Factory Incorporated | 5.8 bn | 27.4 | 41.6% | 5.2% | +4.7% | +142% / +268% |
| WINGWingstop Inc. | 4.5 bn | 39.3 | — | 16.0% | +11.4% | −37% / −30% |
| CBRLCracker Barrel Old Country Store, Inc. | 1.6 bn | 50.2 | 6.7% | 1.0% | −4.7% | +143% / +5% |
| ARCOArcos Dorados Holdings Inc. | 1.5 bn | 7.0 | 33.2% | 4.5% | +4.7% | −7% / −39% |
| BJRIBj’s Restaurants, Inc. | 1.3 bn | 33.0 | 10.4% | 2.9% | +3.1% | +61% / +106% |
| SGSweetgreen, Inc. | 1.1 bn | 117.9 | 3.1% | 2.0% | +0.4% | +82% / +25% |
| BLMNBloomin’ Brands, Inc. | 939.3 m | 35.1 | 6.7% | 0.7% | +0.1% | +55% / −53% |
| FWRGFirst Watch Restaurant Group, Inc. | 833.3 m | 42.1 | 3.1% | 1.5% | +20.3% | −27% / −25% |
| PZZAPapa John’s International, Inc. | 658.1 m | 25.1 | — | 1.4% | −0.3% | −52% / −69% |
| LOCOEl Pollo Loco Holdings, Inc. | 501.2 m | 14.1 | 11.8% | 7.0% | +3.6% | +51% / +98% |
| DINDine Brands Global, Inc. | 448.6 m | 106.7 | — | 0.4% | +8.2% | +17% / −16% |
| PTLOPortillo's Inc. | 336.8 m | 29.8 | 3.0% | 1.9% | +3.0% | +4% / −65% |
| PLAYDave & Buster’s Entertainment, Inc. | 305.8 m | — | -69.7% | -4.3% | −1.4% | −50% / −79% |
| JACKJack In The Box Inc. | 275.6 m | 8.2 | — | 2.4% | −6.7% | −27% / −80% |
1- and 3-year price returns: for YUMC from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 31.62 Total return -35% · Per year -35% | 55.83 Total return 15% · Per year 15% | 83.99 Total return 72% · Per year 72% |
| 3 years | 32.39 Total return -29% · Per year -11% | 64.19 Total return 37% · Per year 11% | 105.79 Total return 123% · Per year 31% |
| 5 years | 33.18 Total return -24% · Per year -5% | 73.80 Total return 62% · Per year 10% | 133.24 Total return 187% · Per year 23% |
- Exit P/E± 16.05
- Net margin± 11.23
- Annual revenue growth± 8.99
- Annual dilution± 0.94
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 10 Aug 2026; since then the company filed 8-K (03 Nov 2026 · results).
In brief
Yum China is the largest restaurant company in China, built around the KFC and Pizza Hut brands, and it reported revenues of 11.8 billion USD in 2025 from 18,101 restaurants. By June 2026 the network had grown to 19,297 restaurants, and the company announced it is acquiring the Pizza Hut brand for mainland China.
SWOT
Strengths
- Leading position among restaurant operators in China, with strong brands and a network across thousands of cities.
- More than three decades of operating experience and advanced digital capabilities, with very large loyalty programs.
- Operating margin has expanded for several consecutive quarters, supported by efficiency gains.
Weaknesses
- Full dependence on the China market, which exposes results to local economic and political risks.
- Margins under pressure from delivery costs and value-for-money offers.
- Reliance on licensed brands, and some terms, such as those for Taco Bell, are still being renegotiated.
Opportunities
- Expansion into smaller cities and new restaurant formats, such as side-by-side modules and Small Town.
- Acquiring the Pizza Hut brand for mainland China could reduce license costs and increase strategic flexibility.
- Growth in coffee through KCOFFEE and Lavazza, if these concepts reach their expansion targets.
Threats
- Intense price competition and pressure from delivery platforms could limit margin expansion.
- Changes in Chinese policy and regulation can affect operations and the value of the shares.
- Food safety risks and brand reputation issues can quickly affect sales.
Risks
- Food safetyhigh
Foodborne illness or contamination incidents, real or perceived, can damage brand reputation and lead to temporary restaurant closures.
- Dependence on Chinahigh
Substantially all revenue comes from China, so changes in policy, regulation or taxation can directly affect results.
- Delivery costsmedium
A higher delivery share can raise courier costs and pressure restaurant margins, especially during intense promotional periods.
- Rapid network developmentmedium
Aggressive expansion could cannibalize existing sales, and new restaurants may not reach the expected profitability.
- Dependence on licenseslow
Operating the brands depends on license agreements and the renegotiation of some terms, which can create long-term uncertainty.
Investment thesis
What would need to be true (bull case)
- If network expansion and growth in smaller cities continue, the company could sustain growth in sales and operating profit.
- The Pizza Hut brand acquisition could reduce license costs and accelerate growth in that segment if license payments fall.
- Capital return programs and rising earnings per share could support value for long-term investors.
What would break the thesis
- Price competition and delivery costs could limit margin expansion, especially if average ticket size keeps declining.
- Full dependence on China leaves the company exposed to local economic or regulatory shocks.
- Rapid growth in the number of restaurants could produce cannibalization and reduce returns on investment.
What to watch
- Completion of the Pizza Hut brand acquisition and its effect on Pizza Hut restaurant marginsQ3 2026
- Trend in same-store sales and transactions, especially in the second half against tougher comparisonsQ3 2026
- Progress toward the target of more than 20,000 restaurants and the franchise share of new openings2026
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 10 Aug 2026; since then the company filed 8-K (03 Nov 2026 · results).
The business
Operations are seasonal, and delivery has become a major channel, accounting for about 48% of company sales in 2025. The company is listed on the NYSE and reports in US dollars, with constant-currency analysis used to strip out the effect of exchange rates.
Segments
KFC
KFC is the largest quick-service brand in China, with 12,997 restaurants at year-end 2025 and 13,789 at June 30, 2026. In the first half of 2026 the brand grew system sales by 6%, and its restaurant margin was 18.1%, slightly below the prior-year level.
Pizza Hut
Pizza Hut is the largest casual dining brand in China, with 4,168 restaurants at year-end 2025 and 4,549 at June 30, 2026. In the second quarter of 2026 system sales rose 6% and same-store sales turned positive, while restaurant margin eased slightly on delivery costs and investment in the new Burger Bar concept.
Other segments
Other operations include Lavazza, Huang Ji Huang, Little Sheep, Taco Bell and the delivery segment, grouped as All Other Segments and considered insignificant individually and in aggregate. Lavazza had 146 coffee shops at year-end 2025 and Huang Ji Huang had 627 units, most of them run under franchise.
Market context
Chain penetration in China's restaurant market is low, especially in lower-tier cities, which leaves room for operators with broad coverage. The company tracks over 2,000 cities without a KFC and 1,500 cities with KFC but no Pizza Hut, illustrating the geographic potential.
Demand for out-of-home dining is supported by a growing middle class and urbanization, and delivery and coffee consumption are growing quickly. The market remains competitive, with aggressive pricing and pressure on average ticket size, which could affect margins if the trend persists.
Trends
- Expansion into lower-tier citiestailwind
Growing the store count in smaller cities through formats such as KFC Small Town and Pizza Hut WOW could support net network growth. The effect depends on the profitability of these locations.
- Rising delivery sharemixed
Delivery has grown strongly and now makes up a larger share of sales, bringing volume but also higher rider costs that pressure margins. The net effect is mixed.
- Pressure on discretionary spendingheadwind
Pressure on discretionary spending and price competition could limit growth in average ticket size, while the company relies on value-for-money offers.
- Coffee and digital growthtailwind
Expansion of the KCOFFEE network and the Lavazza concept, together with digital programs, could open new consumption occasions and customer segments if the investments translate into sales.
Competitive position
The company competes mainly with other quick-service and casual dining operators in China, where pricing pressure and promotional campaigns are intense. Its advantage comes from network scale and more than three decades of experience in the market.
Competition also plays out in digital and delivery channels, where platforms and local brands are gaining share. Brand strength and loyalty programs are, in this context, the main means of defending its position.
- Local quick-service chains
Local fast-food chains and value-menu operators competing for the same dining occasions.
- International restaurant chains
Global brands present in major cities that compete in the premium segment and in coffee.
- Delivery platforms
Digital platforms that influence delivery costs and selling terms for restaurants.
- Coffee shops and coffee chains
Competitors in coffee, where the company is trying to grow through KCOFFEE and Lavazza.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
Loading the links…
News & filings
In the press
- Yum China's $1.2bn Pizza Hut purchase draws cool response from investorsNikkei Asia · 17 Jun 2026 · RO
- Schimbare în industria de fast-food: Yum Brands vinde Pizza Hut pentru 2,7 miliarde de dolari / Restaurantele din China merg la Yum China, celelalte la fondul de investiții american LongRange CapitalEconomedia · 16 Jun 2026 · RO
- Yum Brands sells Pizza Hut to private equity firm LongRange Capital and Yum China for $2.7 billionCNBC World · 16 Jun 2026 · EN
The latest news item in our archive is from 17 Jun 2026; the newest SEC filing is from 03 Nov 2026. The press archive comes from the RSS feeds we follow and does not necessarily cover the latest event — the filings alongside do.
SEC filings
- Current report03 Nov 2026Results of operations · Departure or appointment of officers · Regulation FD disclosure · Financial statements and exhibits
- Current report01 Sept 2026Regulation FD disclosure
- Quarterly report10 Aug 2026
- Current report07 Aug 2026Material agreement · Acquisition or disposition of assets · Regulation FD disclosure · Financial statements and exhibits
- Current report06 Aug 2026Material agreement · Creation of a direct financial obligation · Financial statements and exhibits
- Current report30 Jul 2026Results of operations · Financial statements and exhibits
- Current report16 Jun 2026Material agreement
- Current report16 Jun 2026Regulation FD disclosure · Financial statements and exhibits
- Current report28 May 2026Shareholder vote
- Quarterly report08 May 2026
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / Yum China Holdings, Inc. · 27 Feb 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Yum China Holdings, Inc. · 10 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / Yum China Holdings, Inc. · 30 Jul 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.