CICC International: Upgrades YUM CHINA (09987) Target Price to 453.2 Hong Kong Dollars, Maintains "Outperform" Rating.

Bank of China International released a research report stating that it has raised the target price for YUM CHINA (09987, YUMC.US) from 442.3 Hong Kong dollars to 453.2 Hong Kong dollars, an increase of 2.5%, and from 56.7 US dollars to 58.1 US dollars, also an increase of 2.5%, maintaining an investment rating of "outperform the market." Bank of China International stated that it attended YUM CHINA's investor day event in Shenzhen on November 17, 2025. The company released a new RGM 3.0 (resilience, growth, moat) strategy for the next 5 years and formulated an expansion plan to increase system sales. YUM CHINA outlined a network plan with a goal of having over 25,000 stores by the 2028 fiscal year and over 30,000 stores by the 2030 fiscal year. This plan is based on diversified brands, segmented products and services, and a differentiated store model tailored to different customer needs. Bank of China International has raised its core profit forecast for the 2026 fiscal year by 3%, mainly due to increased POS growth expectations. With a price-earnings ratio of 22 times in the 2026 fiscal year, the bank has raised the target price for US and Hong Kong stocks. YUM CHINA plans to distribute 100% of free cash flow to shareholders from the 2027 fiscal year onwards, with an expected average annual return of 9-10 billion US dollars for the 2027-2028 fiscal years, equivalent to approximately a 6% annualized shareholder return.