Looking ahead, under the innovation-driven growth of delivery and business models, same-store sales are expected to continue demonstrating an alpha improvement trend. The steady advancement of shareholder returns also adds further appeal.
According to Zhitong Finance APP, Guoxin Securities issued a research report maintaining the 'Outperform' rating for Yum China (09987). Considering the marginal impact of investment income, it adjusted the net profit forecast attributable to shareholders for 2025-2027 to USD 9.27/9.93/10.66 billion (with adjustment margins of -2.0%/0%/0%), while also accounting for share repurchases. EPS is projected at USD 2.62/2.95/3.30. During the period, continuous improvements in operational efficiency drove robust growth in operating profits, with expansion plans proceeding steadily. Looking forward, under the innovation-driven growth of delivery and business models, same-store sales are expected to sustain an alpha improvement trend. The steady progress of shareholder returns also contributes additional highlights.
Key points from Guosen Securities are as follows:
Operating profit increased by 7.8% year-over-year in Q3 2025.
In Q3 2025, the company achieved revenue of USD 3.206 billion, up 4.4% year-over-year; operating profit reached USD 400 million, up 7.8% year-over-year, primarily driven by improved restaurant operational efficiency. Net profit attributable to shareholders was USD 282 million, down 5.1% year-over-year, mainly due to pre-tax investment losses of approximately USD 10 million (mainly affected by fluctuations in Meituan's stock price, compared to a profit of USD 34 million in Q3 2024). EPS was USD 0.77.
By brand, in Q3 2025, KFC achieved revenue of USD 2.404 billion, up 4.0% year-over-year; operating profit was USD 384 million, up 5.5% year-over-year; operating margin was 16.0%, up 0.2 percentage points year-over-year. Pizza Hut achieved revenue of USD 635 million, up 3.3% year-over-year; operating profit was USD 57 million, up 9.6% year-over-year; operating margin was 8.9%, up 0.4 percentage points year-over-year. By channel, delivery revenue grew 32% year-over-year, continuing the upward trend from Q2 (+22%), accounting for 51% of total revenue (compared to 45% in Q2).
Core brands continue to maintain positive same-store sales growth.
In Q3 2025, system-wide sales grew 4% year-over-year, with KFC/Pizza Hut increasing by 5%/4% respectively. Overall same-store sales maintained resilient growth of 1% year-over-year (Q1/Q2 were 0%/1% respectively). By brand, KFC/Pizza Hut grew by 2%/1% respectively. For KFC, transaction volume/average order value increased/decreased by 3%/-1% year-over-year. Pizza Hut implemented a high-value-for-money product strategy, which continued to reduce average order value year-over-year but saw a strong recovery in transaction volume, growing by 17% year-over-year.
Net addition of 536 stores in Q3 2025, with an increasing proportion of franchise stores.
In Q3 2025, there was a net addition of 536 stores, with a cumulative net addition of 1,119 stores in the first three quarters, maintaining the full-year target of 1,600-1,800 net store additions. The total number of stores reached 17,514 (KFC/Pizza Hut: 12,640/4,022 respectively). Meanwhile, in Q3 2025, the proportion of franchise stores for KFC/Pizza Hut reached 41%/28% respectively, with the proportion of franchise stores continuing to rise. As of the end of Q3 2025, the group's total membership reached 575 million, with member sales accounting for 57% of total sales.
Operational efficiency continues to improve.
In 2025 Q3, the proportion of salary and employee benefits accounted for 26.2%/+1.1 percentage points, with rising delivery rider costs driven by increased food delivery revenue; ingredient costs accounted for 31.3%/-0.4 percentage points; property rental accounted for 25.2%/-1.0 percentage points; management fee rate was 4.7%/-0.3 percentage points, reflecting ongoing improvements in efficiency.
Progress in innovative business models exceeds expectations, with shareholder returns advancing steadily.
The number of KFC Coffee stores has now exceeded 1,800, surpassing initial guidance for the year. The newly launched light-food K Pro shop-in-shop format has expanded to 100 stores. Shareholder return targets for 2025 are set at USD 1.5 billion, with dividend payouts and share buybacks proceeding as planned.