CICC's report pointed out that Yum China (09987.HK) third-quarter performance roughly met the bank's expectations, with revenue increasing by 5% year-on-year to $3.07 billion, operating profit/core operating profit (excluding exchange rate impact) rising by 14% and 18% respectively year-on-year, and adjusted net profit increasing by 20% year-on-year to $0.297 billion. Excluding investment income from Meituan-W (03690.HK), the group's net profit increased by 9% year-on-year.

The bank believes that Yum China will innovate its products, stores, and business models with cost savings, efficiency improvements, and internal advantages. It is estimated that the company's same-store performance will outperform its peers and achieve visible growth, providing substantial returns to shareholders.

Furthermore, the bank mostly maintains its profit forecast for Yum China in 2024. Considering its innovation and cost reduction measures, along with narrow losses in other brands, the bank has raised the company's adjusted net profit forecast for 2025 by 3% to $0.956 billion, indicating that operating profit will grow by 5% and 12% year-on-year in the next two years. The bank maintains its 'outperform industry' rating for Yum China (YUMC.US), raising the target price by 12% to $58 in the US stock market.