Yum China Holdings

YUMC

Restaurants · Consumer Cyclical

Price

$43.87

-0.46 (-1.04%)

Market Cap

$15.32B

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count falling — buybacks

−17.3% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 434.0M (2021) → 359.0M (2025)

Yum China Holdings runs fast food restaurants across China. It owns and operates the KFC, Pizza Hut, and Taco Bell brands in China under a license from Yum! Brands. With over 15,000 locations, it is one of the largest restaurant companies in China by store count.

The company makes money by selling food directly to customers in its restaurants, and it also collects fees from franchised locations. It operates almost entirely within China, which gives it deep local knowledge but also ties its performance closely to Chinese consumer spending and economic conditions. Growth depends heavily on expanding into smaller Chinese cities where Western fast food brands are still relatively new, but slowing consumer confidence in China remains a key risk to watch.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+9.7% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+12.8% YoY

YoY Growth Rate

Steady EPS growth

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

4.0%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$473M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Yum China Holdings is growing revenue at 10% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

18.8%

Thin — 18.8% gross margin

Operating Margin

14.6%

Healthy — 14.6% operating margin

ROCE

8.8%

Below par — 8.8% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+6.7%

Slow sales growth (6.7% YoY)

EPS YoY

+9.2%

Earnings growing (9.2% YoY)

Single-digit earnings growth — steady but not exciting.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

165%

Turns 165% of profit into real cash

FCF Margin

7.7%

Modest free cash flow (7.7%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.00

Conservative — low debt load (0.00)

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

16.7x

Fair value — P/E 16.7

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+2.4

GROWING

Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Dividend Yield

2.54%

Moderate income — 2.54% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth

+32.5%

Dividend growing fast (32.5% YoY)

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