According to research reports released by Macquarie, Yum China (09987.HK) (YUMC.US) achieved a 5.4% year-on-year increase in revenue in the third quarter of this year, in line with expectations. Core operating profit increased by 18% annually, exceeding the bank's and market expectations by about 7% and 9%. In the first nine months of this year, the proportion of new franchise stores for KFC and Pizza Hut under the company reached 27% and 7% respectively. Management predicts that in the next few years, the proportion of franchise stores for these two brands in new store openings will increase to between 40% and 50% and between 20% and 30% respectively.

Meanwhile, Yum China announced plans to further enhance shareholder returns, increasing the shareholder return amount from 3 billion U.S. dollars to 4.5 billion U.S. dollars from 2024 to 2026. Based on the increase in shareholder returns and the third-quarter performance, Macquarie has raised its net profit forecast for Yum China for the years 2024 to 2026 by 6%, 6%, and 19% respectively, believing that its operational leverage continues to improve, visibility of growth is increasing. The target price has been raised from 291 Hong Kong dollars to 420 Hong Kong dollars, corresponding to an increase in the forecast P/E multiple from 15 times to 20 times in 2025, maintaining an "outperform the market" rating.