Yum China’s Fair Value Raised

Undeterred the COVID-19 spread, the chain operator of Pizza Hut in China sees a long runway of expansion.

Kate Lin, CAIA 03.05.2021
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Yum China's KFC and Pizza Hut outlets

Yum China (YUMC, 9987) is the largest restaurant chain in the country, operating more than 10,000 restaurant outlets, notably under the fast food brands Pizza Hut and KFC. While the flare-up of coronavirus cases put restaurants under pressure, Yum is only affected to a small extent, according to Morningstar equity analyst Ivan Su. This is mostly attributed to its digital ordering and delivery platform, which helped retain customers throughout the pandemic.

‘It’s common that fast food chains would outperform in the times of economic hardships, such as the COVID-19 recession in 2020. Basically, people tend to go for cheaper options, instead of a full-out fancy meal. Also, large group gathering is impossible under social distancing rules. Take-out fast food emerges as a good option, too,’ Su notes.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Yum Brands Inc122.84 USD-1.92
Yum China Holdings Inc Ordinary Shares396.20 HKD1.54Rating
Yum China Holdings Inc Ordinary Shares50.10 USD-0.73Rating

About Author

Kate Lin, CAIA

Kate Lin, CAIA  is a Data Journalist for Morningstar Asia, and is based in Hong Kong

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