Jingu News | Yum China (09987) fluctuated stronger, as of the time of publication, up by 6.08%, at 390.6 Hong Kong dollars, with a turnover of 73.95 million Hong Kong dollars.

On the news side, Guosen Securities issued a research report stating that in the first half of 2024, Yum China's same-store performance and store expansion pace remained strong, relying on refined cost and expense control. With the adjusted net income growth turning positive in Q2 2024, recent bullish domestic consumption promotion policies, the bank analyzed that the company's operations in the second half of the year are expected to continue to show a bottoming and stabilizing trend. The bank believes that the company's medium-term target of double-digit annualized earnings per share growth is highly achievable. And reviewing Yum China's historical valuation levels (refer to the detailed dynamic valuation table in the main text), market tends to give the company a valuation premium when it reaches a turning point in operational performance.

CICC International believes that Yum China's structural reforms to improve operational efficiency, as well as measures in artificial intelligence automation, will continue to be effective in the coming years, bringing broader operational efficiency. It is expected that the operating profit margin in the second quarter of this year will expand by 0.4 percentage points to 11.5%. The bank has raised Yum China's H-share target price from 318.7 Hong Kong dollars to 395.4 Hong Kong dollars.