Nomura: Yum China’s last quarter performance was solid, target price raised to HKD 459

Nomura published a research report stating that Yum China’s performance last quarter was solid, with revenue and profit both exceeding expectations. Quarterly revenue increased by 9% year-over-year. Benefiting from cost improvements and operational efficiency enhancements, restaurant profit margins and operating profit margins expanded significantly by 70 basis points and 80 basis points, respectively, driving quarterly operating profit to $187 million. The report mentioned that Yum China’s management reiterated early signs of consumer recovery before the Lunar New Year holiday. The bank raised its revenue forecasts for Yum China for fiscal years 2026 and 2027 by 1% to 2%, with the target price increased from HKD 432 to HKD 459, maintaining a “Buy” rating.