Yum China Holdings Inc. Common Stock (YUMC)

FairStock Score: 65/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Yum China as a consumer franchise, not a novelty. It runs KFC, Pizza Hut, Taco Bell and other brands across China, with 130,000 employees and delivery embedded in the model. The filed numbers show resilience: in fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $3.1B and net income $244.0M, versus $2.8B and $215.0M in fiscal Q2 2025. For FY2025, revenue was $11.8B, net income $929.0M, and diluted EPS $2.51, up from FY2024 revenue $11.3B, net income $911.0M, and diluted EPS $2.33. That is steady, not spectacular, consistent with FairStock's Lynch category of SLOW GROWER: profit 3.5% a year and revenue 7.4% over five years. The balance sheet looks reasonable: D/E 0.38, ROE 16.81%, ROCE 8.08%, and $940.0M trailing free cash flow, a 6.4% FCF yield on the 2026-10-13 close. But the price is $43.11. FairStock's Graham Number is $30.90, giving a negative margin of safety of about 39.5%. FairStock-calculated P/E was 15.79, P/B 2.84, EV/EBITDA 8.82, Piotroski 5/9, and Altman Z 2.45. I see a decent business with a modest moat from brands and scale, but the price already reflects much of the good news. Growth must improve or the stock may remain expensive relative to intrinsic value. Overall, the numbers show a real business, but not a bargain by my conservative arithmetic.

In plain English: Yum China runs KFC, Pizza Hut, Taco Bell and other restaurant brands in China, including delivery. The business looks reasonably strong: sales and profits have grown, it produces cash, and debt is modest. However, at the 2026-10-13 closing price of $43.11, the shares look more expensive than a conservative estimate of their value based on profits and assets, so they do not appear cheap.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer