Investment Rating - The report maintains a "Buy" rating for Yum China (9987.HK / YUMC.US) and raises the target price to HKD 475.3, indicating a potential upside of 24% from the current stock price of HKD 382.8 [1][5]. Core Insights - Yum China's fourth-quarter total revenue increased by 4% year-on-year to USD 2.6 billion, with system sales also growing by 4%. Core operating profit surged by 36%, and net profit rose by 18% to USD 115 million, exceeding market expectations. For the full year, revenue reached USD 11.3 billion, a 3% increase, while net profit was USD 980 million, up 8.8% [1][2][5]. - The company has implemented efficiency improvement projects, such as Project Fresh Eye and Project Red Eye, which have started to yield positive results in operational efficiency and cost management [2][3]. Financial Performance Summary - In Q4, KFC's total revenue grew by 5% to USD 1.95 billion, with system sales also up by 5%. The core operating profit increased by 18%, and net profit was boosted by lower material costs and improved operational efficiency [3]. - Same-store sales saw a decline of 1%, but this was an improvement from a 3% decline in Q3. The total number of stores reached 16,400, a 12% increase year-on-year [2][4]. - The management expenses decreased, contributing to an increase in profit margins. The management expense ratio for Q4 was 6%, down 0.1 percentage points year-on-year [4]. Financial Projections - The report slightly raises the net profit estimates for 2025, 2026, and 2027 to USD 1.03 billion, USD 1.11 billion, and USD 1.15 billion, respectively, with corresponding EPS estimates of HKD 19.6, HKD 21.1, and HKD 21.9 [1][5]. - The projected revenue growth rates for the upcoming years are 6.57% for 2025, 6.15% for 2026, and 6.10% for 2027 [9]. Valuation Analysis - The report employs both comparable company analysis and DCF methods for valuation, concluding a target price of HKD 475.3 based on a 2025 PE of 24x and a DCF valuation suggesting a fair value of HKD 479.8 [13][17].
百胜中国：四季度业绩超预期，效率提升成果显著