Yum China Holdings, Inc. (YUMC)

Price$43.60Cached quoteAs of 2026-09-06 03:08 UTC

AI: Undervalued

Price checkThe shares look modestly undervalued, but only if recent earnings and cash gains hold.

At the observed quote, Yum China trades at about 18 times trailing diluted earnings, meaning investors pay roughly $18 for each $1 of recent profit. Trailing free cash flow, the cash left after running and investing in the business, is about $940 million. That cash equals roughly 5.7% of the company’s stock-market value. This compares favorably with its roughly 26-times nine-year average earnings multiple, although price-sensitive consumers and the new Pizza Hut debt justify part of that discount.

Big pictureSales, profit, and cash have recovered steadily, though consumer value-seeking remains visible.

Revenue rose from $8.3 billion in 2020 to $11.8 billion in 2025, about 7% annual growth, while 2025 operating profit reached $1.29 billion. Free cash flow improved from about $714 million in 2024 to $840 million in 2025 and roughly $940 million over the latest four quarters. The recovery is not smooth: Pizza Hut’s second-quarter transactions rose 13% while average spending per order fell 11%, and KFC’s average ticket fell 3%, showing customers still respond strongly to lower-priced offers.

Business strengthA strong balance sheet and shrinking share count give each remaining share more support.

At June 30, cash exceeded debt by $419 million, while shares outstanding had fallen to 345 million from 407 million at the end of 2023, a 15% reduction. Stock-based pay was only $42 million in 2025 versus $1.14 billion of buybacks, so dilution has been more than offset. The $1.2 billion Pizza Hut bridge loan changes the picture: ignoring other cash movements, debt minus cash would become roughly $0.8 billion. That remains manageable beside 2025 operating cash flow of $1.47 billion.

What could change the storyThe upside depends on Pizza Hut gains and disciplined expansion; weaker store economics would erase it.

The bull case is visible: second-quarter system sales rose 6%, operating profit rose 14%, and 560 net new stores lifted the network to 19,297 locations. Owning Pizza Hut removes a 3% license fee and is expected to add 2.8 percentage points to that brand’s margins, with mid-single-digit earnings-per-share improvement expected in 2027 and 2028. The bear case is persistent discounting and higher delivery costs. Negative same-store sales or renewed restaurant-margin declines would weaken today’s valuation case quickly.

AI: News

Second-quarter beatSecond-quarter sales and profit beat expectations, supporting confidence that growth is broadening beyond new stores.

On July 30, revenue reached $3.14 billion, up 13% year over year, while operating profit rose 14% to $348 million and diluted earnings per share increased 21% to $0.70. Same-store sales grew 1% and Yum China opened a record 560 net new stores. Shares were quoted about 2.1% higher before the U.S. market opened and rose 1.35% that day; the move is consistent with a positive reaction, though broader market factors may also have contributed.

Pizza Hut ownership closesBuying Pizza Hut China raises debt now but should lift margins and long-term control.

The $1.2 billion purchase closed on August 7. Yum China financed it with an offshore bridge loan of roughly the same size, carrying about a 2% interest rate for up to 12 months. Removing Pizza Hut’s 3% license fee is expected to add 2.8 percentage points to that brand’s restaurant and operating margins, and management expects mid-single-digit earnings-per-share improvement in 2027 and 2028. The stock fell about 1% that day, so completion did not produce an obvious positive market reaction.

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Total cash / debt

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014
Revenue	$11.80B	$11.30B	$10.98B	$9.57B	$9.85B	$8.26B	$8.78B	$8.41B	$7.77B	$7.08B	$6.91B	$6.93B
Gross profit	$2.04B	$1.89B	$1.89B	$1.43B	—	—	—	—	$1.94B	$1.47B	$978.0M	$905.0M
Gross margin	17.28%	16.72%	17.17%	14.91%	—	—	—	—	24.97%	20.71%	14.16%	13.05%
Research & development	$8.0M	$6.0M	$6.0M	$6.0M	$6.0M	$3.0M	$4.0M	$4.0M	$5.0M	$5.0M	$5.0M	$5.0M
Operating expenses	$10.51B	$10.14B	$9.87B	$8.94B	$8.47B	$7.30B	$7.88B	$7.47B	$6.99B	$6.44B	$6.42B	$6.93B
Operating income	$1.29B	$1.16B	$1.11B	$629.0M	$1.39B	$961.0M	$901.0M	$941.0M	$778.0M	$634.0M	$488.0M	$3.0M
Operating margin	10.93%	10.28%	10.07%	6.57%	14.07%	11.63%	10.27%	11.18%	10.01%	8.96%	7.06%	0.04%
EBITDA	$1.74B	$1.64B	$1.56B	$1.23B	$1.90B	$1.41B	$1.33B	$1.39B	$1.19B	$1.04B	$913.0M	$414.0M
EBITDA margin	14.73%	14.49%	14.20%	12.86%	19.30%	17.08%	15.14%	16.47%	15.28%	14.64%	13.21%	5.97%
Net income	$929.0M	$911.0M	$827.0M	$442.0M	$990.0M	$784.0M	$713.0M	$708.0M	$398.0M	$498.0M	$323.0M	−$7.0M
Net profit margin	7.87%	8.06%	7.53%	4.62%	10.05%	9.49%	8.12%	8.41%	5.12%	7.04%	4.68%	−0.10%
Basic EPSper basic share	$2.52	$2.34	$1.99	$1.05	$2.34	$2.01	$1.89	$1.84	$1.03	$1.35	$0.89	-$0.00
Diluted EPSper diluted share	$2.51	$2.33	$1.97	$1.04	$2.28	$1.95	$1.84	$1.79	$1.00	$1.35	$0.89	-$0.00

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

6.99%of listed shares

JPMORGAN CHASE & CO24.12M shares · Jun 30, 2026

View holders

Top 20 reported holders of YUMC
Holder	% owned
JPMORGAN CHASE & CO	6.99%24.12M shares
PRINCIPAL FINANCIAL GROUP INC	6.12%21.13M shares
Hu Fred	≈3.52%12.13M shares
Yang William Wang	≈3.51%12.1M shares
Primavera Capital Management Ltd	3.49%12.04M shares
BLS Capital Fondsmaeglerselskab A/S	3.14%10.84M shares
VANGUARD CAPITAL MANAGEMENT LLC	3.14%10.82M shares
ROYAL BANK OF CANADA	3.07%10.6M shares
Dodge & Cox	2.42%8.37M shares
W1M Asset Management Ltd	2.27%7.84M shares
Westwood Global Investments, LLC	2.03%7.01M shares
NORGES BANK	1.63%5.62M shares
GOLDMAN SACHS GROUP INC	1.27%4.4M shares
BARCLAYS PLC	1.06%3.65M shares
Bank of New York Mellon Corp	1.04%3.59M shares
FIL Ltd	1.00%3.46M shares
GUARDCAP ASSET MANAGEMENT Ltd	0.94%3.26M shares
VANGUARD FIDUCIARY TRUST CO	0.85%2.92M shares
Mondrian Investment Partners LTD	0.84%2.91M shares
FMR LLC	0.83%2.85M shares

Percentages use 345M shares of this listed class outstanding on Jun 30, 2026. ≈ compares the latest reported holding with a share total from a different date; it is not a confirmed current stake.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys5$619.7K disclosed value

Sells (SEC code S)16$11.60M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Feb 24, 2026Form 4	Lu XuelingController and PAO	SellCommon Stock	21.5K	$55.83	$1.20M	9.0K
Feb 24, 2026Form 4	Lu XuelingController and PAO	SellCommon Stock	2.0K	$55.92	$109.4K	30.6K
Feb 13, 2026Form 4	Wat JoeyChief Executive Officer	SellCommon Stock	104.0K	$55.18	$5.74M	433.3K
Feb 11, 2026Form 4	Wat JoeyChief Executive Officer	SellCommon Stock	4.6K	$57.01	$263.0K	537.3K
Feb 5, 2026Form 4	Zhang LeilaChief Technology Officer	SellCommon Stock	5.2K	$55.25	$286.9K	59.8K

Review ownership filings at SEC.gov ↗

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Yum China Holdings, Inc. (YUMC)

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