Credit Suisse lowers YUM China target price to 490.2 yuan, maintains "Buy" rating

Credit Suisse released a report, expecting Yum China (09987.HK) to have a net profit of USD 307 million in the first quarter of 2026, a year-on-year increase of 0.7%, mainly benefiting from a 3.9% year-on-year increase in sales to USD 3.2 billion. Same-store sales are expected to grow approximately 6% year-on-year. Assuming a restaurant operating profit margin of 18.5%, down 0.1 percentage points year-on-year, operating profit is expected to increase by 5.6% year-on-year to USD 439 million. All figures are calculated at fixed exchange rates.

The bank has adjusted its net profit forecast for Yum China in 2026 to account for a market value-based equity investment loss of USD 11 million in Meituan, and has also slightly adjusted the earnings forecasts for 2026 and 2027. The target price for Yum China's Hong Kong stock has been lowered from HKD 497 to HKD 490.2, and the target price for its U.S. stock has been lowered from USD 63.64 to USD 62.8. The "Buy" rating is maintained