YUM CHINA(9987.HK):IMPROVING OUTLOOK AND DECENT CASH RETURNS
YUM CHINA(9987.HK):IMPROVING OUTLOOK AND DECENT CASH RETURNS
We believe store expansion should still be fast in 4Q24E, due to seasonality. We forecast Yum China to open around 500 new stores in 4Q24E (vs 438 in 3Q24E), hence the overall new stores in FY24E could be at about 1,715 (close to high end of the FY24E guidance of 1,500-1,700), because of seasonality (more stores will be opened in 4Q) and the early CNY in 2025 (many stores are likely to be opened right before the big festival). Moreover, while the number of PizzaHut WOW stores has already met the target of 200 in FY24E, the number of K-Coffee has exceeded the target of 600 in FY24E (reached 700 already, based on our channel check); these are all rather positive in driving SSSG in FY25E, in our view.We believe Yum China SSSG might still be negative in 4Q24E (despite a positive foot traffic growth), but thanks to its soft raw material inflation and efficiency gains across store and headquarters levels, we do expect net profit growth to be decent in 4Q24E. Moreover, supported by the slightly more optimistic FY25E outlook, generous cash return programme and attractive valuation, we maintain BUY.
我們認爲百勝中國的同店銷售增長可能在2024年第四季度依然爲負（儘管客流量增長爲正），但由於原材料通脹溫和和門店及總部效率提升，我們預計在2024年第四季度的凈利潤增長將相對可觀。此外，在2025財年稍微樂觀的展望、慷慨的現金回報計劃和吸引人的估值的支持下，我們維持買入。
Sales trend may still be mildly under pressure in 4Q24E. We expect Yum China's SSSG in 4Q24E to be at around -3%, similar to that in 3Q24. Breaking down into brands, we now expect KFC/ Pizza Hut's SSSG to be at -2%/ -5% in 4Q24E, similar to the -2%/ -6% in 3Q24. In terms of ASP, we still think that would be declining, due to promotions and increasingly rational consumption by customers, but the foot traffic growth should still be positive in 4Q24E. Based on our estimates, SSSG could be flattish in Oct 2024, but slightly weakened in Nov and Dec 2024. However, we believe this performance is already leading in the overall catering industry.
銷售趨勢在2024年第四季度可能仍然面臨溫和壓力。我們預計百勝中國在2024年第四季度的同店銷售增長大約爲-3%，與2024年第三季度相似。按品牌劃分，我們現在預計2024年第四季度KFC和Pizza Hut的同店銷售增長分別爲-2%和-5%，與2024年第三季度的-2%和-6%類似。在平均銷售價格方面，由於促銷和客戶日益理性的消費，我們認爲將會有所下降，但在2024年第四季度的客流量增長仍應爲正。根據我們的估計，2024年10月的同店銷售增長可能持平，但在2024年11月和12月略有疲軟。然而，我們相信這一表現已經在整體餐飲行業中處於領先地位。
But profitability is more important, which should still be under control in 4Q24E. Firstly, we believe the GP margin may be at around 70%, stable vs 3Q24 and better than 3Q23, supported by the declining chicken prices in China. Secondly, China's CPI continue to outpace the PPI in recent years, which shall help drive down the overall raw material inflation pressure. Thirdly, we also think the opex is in a very good shape, as management is still confident on improving its SG&A mix (as % of sales) to below 5% in FY24E and the A&P expenses are still under refinement (boosting the ROI with no material increase in overall budget). Therefore, we are forecasting a 4% sales growth and 17% net profit growth in 4Q24E.
但盈利能力更爲重要，這在2024年第四季度仍應得到控制。首先，我們認爲毛利率可能在70%左右，較2024年第三季度穩定，且優於2023年第三季度，這得益於中國雞肉價格的下跌。其次，中國的消費者物價指數在近年來繼續超過生產者物價指數，這將有助於降低整體原材料的通脹壓力。第三，我們還認爲運營費用狀況良好，管理層仍對在2024財年將銷售費用（佔銷售比例）進一步降低到5%以下充滿信心，廣告和促銷費用仍在優化中（提升回報率而沒有整體預算的大幅增加）。因此，我們預計2024年第四季度的銷售增長爲4%，凈利潤增長爲17%。
We believe store expansion should still be fast in 4Q24E, due to seasonality. We forecast Yum China to open around 500 new stores in 4Q24E (vs 438 in 3Q24E), hence the overall new stores in FY24E could be at about 1,715 (close to high end of the FY24E guidance of 1,500-1,700), because of seasonality (more stores will be opened in 4Q) and the early CNY in 2025 (many stores are likely to be opened right before the big festival). Moreover, while the number of PizzaHut WOW stores has already met the target of 200 in FY24E, the number of K-Coffee has exceeded the target of 600 in FY24E (reached 700 already, based on our channel check); these are all rather positive in driving SSSG in FY25E, in our view.
我們認爲由於季節性原因，2024年第四季度的門店擴張仍將較快。我們預測百勝中國在2024年第四季度將開設約500家新門店（相比2024年第三季度的438家），因此2024財年整體新門店數量可能達到約1,715家（接近2024財年1,500-1,700家指導範圍的高端），這得益於季節性原因（第四季度將會開設更多門店）和2025年春節的提前（許多門店可能會在重大節日前開設）。此外，雖然PizzaHut WOW門店的數量已經達到了2024財年200家的目標，但k-Coffee的數量已超過2024財年600家的目標（根據我們的渠道調查，當前已達700家）；我們認爲這些都在推動2025財年的同店銷售增長方面相當積極。
Maintain BUY and fine-tune TP to HK$ 450.26. Our new TP is based on 22x FY25E P/E (unchanged). We fine-tune FY24E/ 25E/ 26E net profit forecasts by +1%/ +1%/ -2% to reflect a weaker SSSG but faster store openings. The stock is now trading at 17x FY25E P/E, still not demanding vs 5-year average of 25x.
維持買入評級，目標價格調整至港幣450.26。我們的新目標價格基於22倍2025財年預期市盈率（保持不變）。我們對2024財年/2025財年/2026財年的凈利潤預測進行了微調，分別上調1%/上調1%/下調2%，以反映較弱的同店銷售增幅，但店鋪開設速度加快。該股票目前的2025財年預期市盈率爲17倍，仍舊低於5年平均的25倍。
譯文內容由第三人軟體翻譯。
