Value
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.8 |
| P/S | 9.5 |
| EV/EBITDA | 6.6 |
| Fwd P/E | 8.8 |
| PEG | 6.9 |
| Analyst target | 9.0 |
- ▸Forward P/E: 12.6x
- ▸PEG: 1.02
- ▸Attractively valued
YUMC · Why this verdict
Why Yum China Holdings (YUMC) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Yum China trades at a significant discount to analyst consensus with 24% upside potential and an attractive forward P/E of 13.6x, but geographic concentration entirely within China and a death-cross technical pattern create meaningful recovery risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Yum China operates entirely within China, which the risk assessment flags as a high-concentration geographic risk — a single regulatory, macro, or consumer sentiment shift in China could impair the entire revenue base. Bear case | China same-store sales growth remains positive over the next four quarters, demonstrating resilience of the domestic consumer spending environment. | →Stable |
| CounterGeographic concentration in China is the primary structural risk; any escalation of trade tensions, renewed COVID-type restrictions, or consumer deleveraging would hit revenues with no geographic offset available. | ||
At a forward P/E of 13.6x and PEG ratio of 1.15, analysts target a 24% price gain to $55.05, supported by a reward-to-risk ratio of 5.81 — among the more asymmetric setups in the restaurant sector. Targets | Stock price rises above $50 within 12 months, recovering at least half the gap to the consensus analyst target of $55.05. | →Stable |
| CounterAnalyst targets for China-based consumer companies have historically been revised down when macro conditions deteriorate; the 24% upside could compress if earnings revisions turn negative. | ||
Yum China has delivered two beats and two inline results in the last four quarters with no misses and an average surprise of 2.7%, suggesting disciplined expense management even in a soft macro environment. Earnings | The company delivers at least 3 beats or inline results in the next 4 quarters with no negative EPS surprises. | →Stable |
| CounterAverage surprise of only 2.7% and two inline quarters indicate thin margin for error; any macro deterioration could quickly push results below expectations. | ||
The stock is in a death-cross pattern — where the 50-day moving average has crossed below the 200-day moving average — but the MACD is improving and RSI stands at 52, suggesting a potential early-stage technical recovery. Gates warning | The 50-day moving average crosses back above the 200-day moving average within 6 months, confirming a full technical trend reversal. | →Stable |
| CounterA death cross with the stock trading below its 200-day moving average historically signals sustained downside momentum; the recovering MACD alone may not be sufficient to reverse the trend. | ||
Yum China operates entirely within China, which the risk assessment flags as a high-concentration geographic risk — a single regulatory, macro, or consumer sentiment shift in China could impair the entire revenue base.
→StableBear case
- Expectation
- China same-store sales growth remains positive over the next four quarters, demonstrating resilience of the domestic consumer spending environment.
CounterGeographic concentration in China is the primary structural risk; any escalation of trade tensions, renewed COVID-type restrictions, or consumer deleveraging would hit revenues with no geographic offset available.
At a forward P/E of 13.6x and PEG ratio of 1.15, analysts target a 24% price gain to $55.05, supported by a reward-to-risk ratio of 5.81 — among the more asymmetric setups in the restaurant sector.
→StableTargets
- Expectation
- Stock price rises above $50 within 12 months, recovering at least half the gap to the consensus analyst target of $55.05.
CounterAnalyst targets for China-based consumer companies have historically been revised down when macro conditions deteriorate; the 24% upside could compress if earnings revisions turn negative.
Yum China has delivered two beats and two inline results in the last four quarters with no misses and an average surprise of 2.7%, suggesting disciplined expense management even in a soft macro environment.
→StableEarnings
- Expectation
- The company delivers at least 3 beats or inline results in the next 4 quarters with no negative EPS surprises.
CounterAverage surprise of only 2.7% and two inline quarters indicate thin margin for error; any macro deterioration could quickly push results below expectations.
The stock is in a death-cross pattern — where the 50-day moving average has crossed below the 200-day moving average — but the MACD is improving and RSI stands at 52, suggesting a potential early-stage technical recovery.
→StableGates warning
- Expectation
- The 50-day moving average crosses back above the 200-day moving average within 6 months, confirming a full technical trend reversal.
CounterA death cross with the stock trading below its 200-day moving average historically signals sustained downside momentum; the recovering MACD alone may not be sufficient to reverse the trend.
Per-dimension breakdown
Quality
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.4 |
| ROA | 5.2 |
| Gross margin | 0.1 |
| Op margin | 5.5 |
| Net margin | 3.9 |
| Current ratio | 4.0 |
| FCF quality | 6.2 |
| Moat | 5.5 |
| Piotroski F | 7.8 |
- ▸Strong Piotroski F-Score: 7/9
Growth
4.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.9 |
| EPS growth | 4.6 |
Momentum
1.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 1.4 |
| OBV | 1.0 |
| MA position | 1.5 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 9.0 |
| Price target | 9.5 |
| erm sentiment | 5.1 |
- ▸Analyst upside: 51%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.7 |
| quality rank | 4.5 |
| growth rank | 6.5 |
- ▸Attractive P/E vs peers
Technical
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.8 |
| support resistance | 9.5 |
| 52w position | 4.1 |
Risk (lower is worse)
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.4 |
| days to cover | 8.2 |
| volatility | 6.9 |
| put call | 6.7 |
| implied vol | 5.2 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 8.5 |
- ▸Above max pain $32
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.8 |
| dividend safety | 7.0 |
- ▸Dividend: 283.0%
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (7)
- ASYMMETRY:7.1>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:35d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:1.5<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
7.10
Upside
+35.5%
Downside
5.0%
Sizing output
AVOID
SetupFALLING_KNIFE — Death cross, below all MAs, RSI 36, MACD bearish
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: ASYMMETRY:7.1>=1.5. Top dim: Value at 8.1; weakest: Momentum at 1.5. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Value at 8.1, Sentiment at 8.1, and Technical at 7.8; the weakest are Momentum at 1.5, Growth at 4.8, and Quality at 4.8. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 7.10 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Yum China operates entirely within China, which the risk assessment flags as a high-concentration geographic risk — a single regulatory, macro, or consumer sentiment shift in China could impair the entire revenue base.
Trip ifChina same-store sales growth falls below 0% for 2 consecutive quarters.
- P2At a forward P/E of 13.6x and PEG ratio of 1.15, analysts target a 24% price gain to $55.05, supported by a reward-to-risk ratio of 5.81 — among the more asymmetric setups in the restaurant sector.
Trip ifAnalyst consensus price target falls below $48, declining by more than 10% from the current $55.05.
- P3Yum China has delivered two beats and two inline results in the last four quarters with no misses and an average surprise of 2.7%, suggesting disciplined expense management even in a soft macro environment.
Trip ifEPS surprise falls below -5% in at least 2 of the next 4 quarters.
- P4The stock is in a death-cross pattern — where the 50-day moving average has crossed below the 200-day moving average — but the MACD is improving and RSI stands at 52, suggesting a potential early-stage technical recovery.
Trip ifPrice drops below $40, falling more than 10% below the current price of $44.25, with RSI declining below 35.