Yum China Stock Fair Value Calculator – Sumitomo Mitsui Trust Holdings Reduces Stake in Yum China Holdings, Inc
July 19, 2023
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Sumitomo Mitsui Trust Holdings Inc. has recently reduced its stake in Yum China ($NYSE:YUMC) Holdings, Inc., a leading restaurant and food delivery business in China. It operates the KFC, Pizza Hut, and Taco Bell brands in China, as well as East Dawning and Little Sheep brands. It also offers food delivery services through its online platform. The reduction of stake by Sumitomo Mitsui Trust Holdings Inc. is believed to be related to the recent announcement that Yum China Holdings, Inc. plans to expand its food delivery business through a strategic partnership with Meituan.
The new partnership will help Yum China Holdings, Inc. to better compete with rivals such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Investors should keep a close eye on Yum China Holdings, Inc. as it continues to expand and strengthen its food delivery business. With more customers turning to food delivery services, Yume China Holdings Inc. is well positioned to capitalize on this growing trend and become a major player in the industry.
Stock Price
On Tuesday, Sumitomo Mitsui Trust Holdings Inc. announced that it had reduced its stake in Yum China Holdings, Inc. The company opened at $60.0 and closed at $58.4, down by 3.0% from the previous day’s closing price of 60.2. This follows a string of divestments in Yum China by several major shareholders in the past few weeks, including KKR & Co. and Temasek Holdings, as investors sought to cash out of the stock amid weak earnings and rising labor costs. Despite this decline, some analysts remain confident in the company’s long-term prospects, citing its strong domestic presence and expanding international operations. Yum China continues to expand its footprint in international markets such as India and the United States, and is well-positioned for growth in 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 |
| 9.82k | 631 | 6.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Yum China. More…
| Operations | Investing | Financing |
| 1.75k | -964 | -669 |
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 |
| 11.96k | 4.55k | 15.98 |
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 |
| 6.1% | 9.7% | 9.0% |
| FCF Margin | ROE | ROA |
| 11.2% | 8.4% | 4.6% |
Analysis – Yum China Stock Fair Value Calculator
At GoodWhale, we recently conducted an analysis of YUM CHINA‘s fundamentals. According to our proprietary Valuation Line, the intrinsic value of a single share of YUM CHINA is estimated to be around $57.2. However, it does appear to be slightly overvalued by 2.0%. 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 Holdings, Inc. (YUMC) is a leading and fast-growing restaurant company in China. The company has established a strong presence in the Chinese market, owning and operating a variety of restaurant brands. Recently, Sumitomo Mitsui Trust Holdings Inc. decreased its position in YUMC shares, resulting in a decline in stock price the same day. This should be a warning sign for investors who are considering investing in YUMC.
However, the long-term prospects of the company remain positive and investors should still be mindful of potential risks before investing in YUMC. Analysts recommend conducting a thorough analysis of the company’s financial position, competitive environment, and future prospects before investing in this stock.
