Kgi: $430 target for Yum China may benefit from post-pandemic demand recovery

Kji Securities issued a research report, bullish on Yum China (09987) long-term revenue and earnings growth, and in the post-epidemic repair valuation.Based on the 2022 PRICE-to-earnings ratio, Yum’s current valuation is 22.6 times, lower than the Hong Kong IPO average of 33.3 times, recommended to absorb, with a target price of rmb430.Kgi believes that although the short-term same-store sales growth of Yum China (09987) was affected by the epidemic, the company, which opened more than 1,700 stores last year, will also benefit from the recovery in demand after the epidemic ends.Meanwhile, Yum China focuses on coffee shops with Coffii & AMP;Joy is growing fast in same-store sales and plans to expand its premium coffee brand, Lavazza, to 1,000 stores by 2025 (up from 22 by August 2021).

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