YUMCYum China Holdings, Inc.
Is the business good?
A genuinely good business: earnings fully cash-backed (1.6×) and margins widening.
Operating profit is fully backed by cash.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
A balanced mix of margins, efficiency, and leverage. ROE 17% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is YUMC?
Yum China Holdings, Inc. earns 27% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 18 points above what the capital costs: growth creates value
- Operating margin
- 11%
Operating margin · Restaurants median 7.8% · 12 months to Q2 2026
- Cash conversion
- 1.56×
Cash conversion · 1.61× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −6.7%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2020 | 12% |
| FY2021 | 14% |
| FY2022 | 6.6% |
| FY2023 | 10% |
| FY2024 | 10% |
| FY2025 | 11% |
Details›
- Operating margin12 months to Q2 2026
- 11%
- Net margin12 months to Q2 2026
- 7.8%
- Free cash flow margin
- 7.6%
- Revenue, trailing twelve months
- $12.4B
- Free cash flow, trailing twelve months
- $940M
- Net income, trailing twelve months
- $975M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 27%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.