Yum China Holdings, Inc.
Yum China Holdings, Inc. Fundamental Analysis
Yum China Holdings, Inc. (YUMC) shows weak financial fundamentals with a PE ratio of 20.77, 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 47.1/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze YUMC's fundamental strength across five key dimensions:
Efficiency Score
WeakYUMC struggles to generate sufficient returns from assets.
Valuation Score
ModerateYUMC shows balanced valuation metrics.
Growth Score
ModerateYUMC shows steady but slowing expansion.
Financial Health Score
ExcellentYUMC maintains a strong and stable balance sheet.
Profitability Score
ModerateYUMC maintains healthy but balanced margins.
Key Financial Metrics
Is YUMC Expensive or Cheap?
P/E Ratio
YUMC trades at 20.77 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, YUMC's PEG of 5.61 indicates potential overvaluation.
Price to Book
The market values Yum China Holdings, Inc. at 3.59 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 8.87 times EBITDA. This is generally considered low.
How Well Does YUMC 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 11.38 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 $836.25M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $2.37 in free cash annually.
FCF Yield
YUMC converts 4.49% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
20.77
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
5.61
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.59
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.61
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.69
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
0.16
vs 25 benchmark
How YUMC Stacks Against Its Sector Peers
| Metric | YUMC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 20.77 | 25.25 | Better (Cheaper) |
| ROE | 16.41% | 1170.00% | Weak |
| Net Margin | 7.87% | 742.00% | Weak |
| Debt/Equity | 0.69 | 0.77 | Neutral |
| Current Ratio | 1.05 | 9.19 | Neutral |
| ROA | 8.62% | -6467.00% (disorted) | Weak |
YUMC outperforms its industry in 1 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