Yum China Holdings, Inc.
Yum China Holdings, Inc. Fundamental Analysis
Yum China Holdings, Inc. (9987.HK) shows weak financial fundamentals with a PE ratio of 19.02, profit margin of 7.87%, and ROE of 16.41%. The company generates $11.6B in annual revenue with weak year-over-year growth of 2.96%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 49.7/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze 9987.HK's fundamental strength across five key dimensions:
Efficiency Score
Weak9987.HK struggles to generate sufficient returns from assets.
Valuation Score
Moderate9987.HK shows balanced valuation metrics.
Growth Score
Moderate9987.HK shows steady but slowing expansion.
Financial Health Score
Excellent9987.HK maintains a strong and stable balance sheet.
Profitability Score
Moderate9987.HK maintains healthy but balanced margins.
Key Financial Metrics
Is 9987.HK Expensive or Cheap?
P/E Ratio
9987.HK trades at 19.02 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, 9987.HK's PEG of 40.25 indicates potential overvaluation.
Price to Book
The market values Yum China Holdings, Inc. at 3.29 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 8.61 times EBITDA. This is generally considered low.
How Well Does 9987.HK Make Money?
Net Profit Margin
For every $100 in sales, Yum China Holdings, Inc. keeps $7.87 as profit after all expenses.
Operating Margin
Core operations generate 12.06 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.41 in profit for every $100 of shareholder equity.
ROA
Yum China Holdings, Inc. generates $8.62 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Yum China Holdings, Inc. produces operating cash flow of $1.46B, showing steady but balanced cash generation.
Free Cash Flow
Yum China Holdings, Inc. produces free cash flow of $835.84M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $2.37 in free cash annually.
FCF Yield
9987.HK converts 4.89% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
19.02
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
40.25
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.29
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.47
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.44
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.05
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.16
vs 25 benchmark
ROA
Return on assets percentage
0.09
vs 25 benchmark
ROCE
Return on capital employed
0.17
vs 25 benchmark
How 9987.HK Stacks Against Its Sector Peers
| Metric | 9987.HK Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 19.02 | 23.78 | Better (Cheaper) |
| ROE | 16.41% | 1098.00% | Weak |
| Net Margin | 7.87% | -626.00% (disorted) | Weak |
| Debt/Equity | 0.44 | 0.86 | Strong (Low Leverage) |
| Current Ratio | 1.05 | 2.64 | Neutral |
| ROA | 8.62% | -8081.00% (disorted) | Weak |
9987.HK outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Yum China Holdings, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
25.14%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
24.15%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
16.35%
Industry Style: Cyclical, Growth, Discretionary
High Growth