Yum China Intrinsic Value Calculation – YUM CHINA Reports Record Second Quarter Revenue and Net Income for FY2023
August 8, 2023
🌥️Earnings Overview
For the second quarter of FY2023, YUM CHINA ($NYSE:YUMC) reported total revenue of USD 2654.0 million and net income of USD 197.0 million – a 24.7% and 137.3% increase from the same period of the previous year respectively.
Share Price
On Monday, YUM CHINA stock opened at $60.7 and closed at $61.0, up by 2.1% from its last closing price of 59.8. YUM CHINA’s strong performance was driven by an increase in same-store sales across its main brands, including KFC, Pizza Hut, and Taco Bell. The company also reported an increase in digital ordering and delivery of its food products, with sales of digitally ordered food up 60% year-on-year. YUM CHINA’s performance demonstrates the resilience of the Chinese market, despite the ongoing pandemic.
The company’s strong performance is also reflective of the increasing popularity of digital ordering and delivery services. With its strong second quarter performance, YUM CHINA is in a good position to continue its growth into the future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Yum China. More…
| Total Revenues | Net Income | Net Margin |
| 10.34k | 745 | 7.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Yum China. More…
| Operations | Investing | Financing |
| 1.73k | -1.07k | -561 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Yum China. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 11.68k | 4.46k | 15.69 |
Key Ratios Snapshot
Some of the financial key ratios for Yum China are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 8.9% | 20.0% | 10.3% |
| FCF Margin | ROE | ROA |
| 10.3% | 10.0% | 5.7% |
Analysis – Yum China Intrinsic Value Calculation
At GoodWhale, we have conducted a detailed fundamental analysis of YUM CHINA and determined that the fair value of the company’s share is around $57.3, which was calculated using our proprietary Valuation Line. Currently, YUM CHINA stock is traded at $61.0, this means that the stock is slightly overvalued by 6.5% at the current price. More…
Peers
The restaurant industry is highly competitive, with Yum China Holdings Inc facing off against Xiabuxiabu Catering Management (China) Hldgs Co Ltd, Yum Brands Inc, and Longhui International Holdings Ltd. All four companies are vying for a share of the Chinese market, which is expected to grow to $1.6 trillion by 2020. While Yum China has the advantage of being the first mover in the Chinese market, it will need to continue to innovate and evolve its offerings to stay ahead of its competitors.
– Xiabuxiabu Catering Management (China) Hldgs Co Ltd ($SEHK:00520)
Xiabuxiabu Catering Management (China) Hldgs Co Ltd is a leading Chinese catering company. It has a market cap of 5.06B and a ROE of -13.09%. The company operates a chain of restaurants across China, providing catering services for both individual customers and corporate clients. It also has a strong presence in the online food delivery market, with its own delivery platform and app.
– Yum Brands Inc ($NYSE:YUM)
Yum Brands Inc, a food and beverage company, has a market capitalization of $31.2 billion as of 2022. The company has a return on equity of -15.87%. Yum Brands operates in the quick service restaurant industry. The company franchises and operates restaurants under the KFC, Pizza Hut, and Taco Bell brands. Yum Brands was founded in 1997 and is headquartered in Louisville, Kentucky.
– Longhui International Holdings Ltd ($SEHK:01007)
Longhui International Holdings Ltd is a holding company that, through its subsidiaries, engages in the property development, investment, and management businesses in Mainland China. As of 2022, its market cap was $85.36 million and its ROE was 13.26%. The company is based in Shenzhen, China.
Summary
YUM China‘s second quarter financial results for FY2023 were strong, with total revenue increasing 24.7% to USD 2654.0 million and net income climbing 137.3% to USD 197.0 million compared to the same period of the previous year. For investors, this is a positive sign as it indicates strong growth for the company, suggesting that investing in YUM China could be a viable option. The company’s outlook looks promising, as they continue to implement strategies to maximize profits and make YUM China an attractive investment opportunity.
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