Jingu Finance News | Northeast Securities issued a research report, stating that Yum China (09987) released its 2024Q3 financial results. In Q3, total revenue reached $3.07 billion, +4% excluding the impact of exchange rates. Adjusted operating profit was $0.37 billion, +13% excluding the impact of exchange rates. Adjusted net income was $0.3 billion, +19% excluding the impact of exchange rates. The adjusted net margin was 9.7%, +1.2 percentage points. Core financial indicators all exceeded market expectations.

The bank pointed out that in Q3, the company opened a net of 438 stores, including net openings of 352/102/-16 stores for KFC/Pizza Hut/other brands, with 11,283 KFC stores and 3,606 Pizza Hut stores. In terms of operational targets, the company's full-year store opening plan remains at 1,500-1,700, consistent with the guidance given in 2023Q4. As of 2024Q3, the company's store count reached 15,861, including 11,283 KFC stores, 3,606 Pizza Hut stores, and 972 stores of other brands.

The bank stated that the company is a groundbreaking benchmark in the localization of Western fast food, entering the low-tier market with a small-town model. The opening plan for 2024 is highly likely to exceed expectations, with a potential of reaching 20,000 stores. Under the low base effect in Q4, same-store sales are expected to turn positive, while locking in raw material prices, reducing restaurant area and personnel, and optimizing technological upgrades are expected to collectively drive marginal improvements in the single-store model. The company's projected net income attributable to the parent from 2024 to 2026 is $0.93/1.01/1.14 billion, corresponding to P/E ratios of 21/19/17 times, maintaining a "buy" rating.