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<Research>HSBC Global Research Cuts YUM CHINA (09987.HK) TP to $466.4; Rating Buy
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YUM CHINA (09987.HK) once again trumped market expectations in terms of 3Q24 earnings, having announced its plan to step up the capital returns to shareholders from US$3 billion to US$4.5 billion between 2024 and 2026, representing an increase of 50%, HSBC Global Research said in a report. Amidst uncertainty in the Chinese consumer market, management has also demonstrated its flexible expansion plan for the first time. The broker believed this will improve earnings visibility amidst market uncertainty. HSBC Global Research said that Yum China maintained its total expansion from 2024 to 2026 and increased the mix from franchisee stores. Hence, the broker lowered its revenue forecasts for 2025 and 2026 by 2% and 4% respectively, but largely maintained its net profit forecast, expecting its adjusted net profit CAGR from 2024 to 2026 to be about 11%, and revenue CAGR to be about 6%. Taking buybacks into account, the adjusted EPS CAGR is expected to be 18%. The broker maintained the group's Buy rating and trimmed the target price for H-shares from $477.4 to $466.4. AAStocks Financial News |
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