J.P. Morgan: Yum China (YUMC.US) performance meets expectations, rating as Hold.

J.P. Morgan released a research report stating that on April 30th, after YUM CHINA (YUMC.US, 09987.HK) announced its first-quarter performance for 2025, the stock price in the United States fell by 7.8% (with the S&P 500 index remaining flat, Starbucks Corporation fell by 6%, and Luckin Coffee, Inc. Sponsored ADR Class A fell by 6%). The performance roughly met market expectations (with system sales / adjusted earnings per share growth of 2% / 8.5%). Contrary to the stock price trend, J.P. Morgan has a more positive attitude towards the performance report, believing that YUM CHINA has struck a balance between growth and quality, and the market is overly concerned about its growth in the first quarter of 2025. Analysts have moderately adjusted their expectations, expecting system sales / revenue / earnings per share growth rates in 2025 to be 4.5% / 1.8% / 5.1% respectively. The target price for June 2026 is $60, with an expected P/E ratio of 20. The main reasons why analysts are optimistic about the performance of YUM CHINA's stock price are: first, the same-store sales growth rates of KFC and Pizza Hut are flat (better than market expectations of negative growth in the first half of 2025 and positive growth in the second half); second, restaurant profit margins have increased by 100 basis points, reaching 18.6% (higher than the market's expected 17.9%).