Yamato: Raised YUM CHINA (09987) target price to HK$520, reiterates "buy" rating.

Yamato Research Report states that YUM CHINA (09987) stock price rose by 11% on February 5th (yesterday), with the company's performance in the fourth quarter of 2025 surpassing expectations. The bank believes that the upward trend is due to investors' changing perceptions of competition and pricing in the Chinese restaurant industry. KFC's same-store sales in the fourth quarter of 2025 exceeded expectations, and with a price increase in delivery channels in January, it indicates a recovery in consumer confidence and a rationalization of industry pricing. Despite YUM CHINA's management predicting only a slight increase in operating profit margin in 2026 compared to the previous year, with the improvement in the competitive situation in the Chinese market, it is expected that there is still room for its profit margin to exceed market expectations. The bank reiterated a "buy" rating on YUM CHINA and raised its target price to HK$520.