Nomura: Yum China (09987) rated as "buy", target price raised to HK$438.

Nomura released a research report stating that YUM CHINA (09987) has a "buy" rating, with a target price raised from 415 Hong Kong dollars to 438 Hong Kong dollars. The company's performance in the last quarter met expectations, reflecting a stable recovery in the last quarter, and positive guidance for this year. The report stated that YUM CHINA's revenue in the last quarter was 2.595 billion US dollars, a year-on-year increase of 4%, and core operating profit was 150 million US dollars, a year-on-year increase of 35%, both of which met market expectations. The gross profit margin of the restaurants in the last quarter increased by 180 basis points to 12.3% year-on-year. The company declared a quarterly dividend of $0.24 per share. At the same time, the company shared clear guidance for 2025, expecting unit sales growth in the high single digits, stable or improved core operating profit margins. The bank believes this shows strong confidence from the management in the resilience of the business.