20230915-招银国际-百胜中国-09987.HK-Key_takeaways_from_YUMC_2023_Investor_Day_8页_1mb

Yum China (9987 HK) Investor Summary

Key Takeaways from 2023 Investor Day

• Target Adjustment: Management raised FY23E target and provided mid-term target of 20,000 stores by FY26E.
• Store Opening Targets: Revised FY23E store opening target to 1,400-1,600, lifted YoY growth target to 12%.
• Franchise Expansion: Emphasized franchise model, modernized and useful for expansion into remote areas and local penetration.
• Competitive Edge: Maintains competitive advantage despite intensified competition through innovation and value products.

Analyst Recommendation

• Maintain: BUY
• Raise Target Price (TP) to HK$609.41
• Up/Downside: 40.4%

Financial Highlights

• Revised FY23E/24E/25E NP growth: +1%/+6%/+7% due to faster expansion and higher OP margin.
• OP margin improved due to cost control through supply chain collaboration.

Mid-Term Target

• 20,000 Stores by FY26E: Achievable via ~1,800+ stores per year, aided by untapped market and lower breakeven with new store models.

Valuation

• Current P/E (19x FY24E) is below 5-year avg (25.4x), valuations appear understated.
• TP based on 27x FY24E P/E reflects industry turnaround and acceleration.

Key Drivers

• Faster store opening (vs market avg)
• Innovative menu (new Chinese style burger Fri)
• Widened price range with high-margin value products (e.g., RMB 20 combo meal)
• Improved unit operating profit margin for smaller stores.

Financial Data Snippets

• EPS (FY25E): HK$3.76
• P/E (Current): ~19x
• Share Price (HK$): ~434

**Note:** Refer to full report for detailed financials, disclosures, and assumptions.