Intrinsic value of Yum China Holdings - YUMC

Previous Close

$35.80

  Intrinsic Value

$250.46

stock screener

  Rating & Target

str. buy

+600%

Previous close

$35.80

 
Intrinsic value

$250.46

 
Up/down potential

+600%

 
Rating

str. buy

We calculate the intrinsic value of YUMC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 13.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  29.70
  27.23
  25.01
  23.01
  21.21
  19.59
  18.13
  16.81
  15.63
  14.57
  13.61
  12.75
  11.98
  11.28
  10.65
  10.09
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
Revenue, $m
  9,266
  11,789
  14,737
  18,127
  21,971
  26,274
  31,037
  36,256
  41,923
  48,031
  54,569
  61,528
  68,896
  76,666
  84,832
  93,388
  102,331
  111,663
  121,386
  131,506
  142,030
  152,970
  164,339
  176,154
  188,432
  201,195
  214,466
  228,269
  242,634
  257,588
Variable operating expenses, $m
  5,831
  7,413
  9,262
  11,388
  13,799
  16,497
  19,483
  22,756
  26,310
  30,140
  34,219
  38,582
  43,203
  48,076
  53,196
  58,561
  64,169
  70,021
  76,118
  82,464
  89,063
  95,924
  103,053
  110,462
  118,161
  126,164
  134,486
  143,142
  152,149
  161,527
Fixed operating expenses, $m
  1,941
  1,983
  2,027
  2,072
  2,117
  2,164
  2,211
  2,260
  2,310
  2,361
  2,413
  2,466
  2,520
  2,575
  2,632
  2,690
  2,749
  2,810
  2,871
  2,935
  2,999
  3,065
  3,133
  3,201
  3,272
  3,344
  3,417
  3,493
  3,569
  3,648
Total operating expenses, $m
  7,772
  9,396
  11,289
  13,460
  15,916
  18,661
  21,694
  25,016
  28,620
  32,501
  36,632
  41,048
  45,723
  50,651
  55,828
  61,251
  66,918
  72,831
  78,989
  85,399
  92,062
  98,989
  106,186
  113,663
  121,433
  129,508
  137,903
  146,635
  155,718
  165,175
Operating income, $m
  1,494
  2,392
  3,448
  4,668
  6,055
  7,614
  9,342
  11,240
  13,304
  15,530
  17,938
  20,480
  23,173
  26,016
  29,004
  32,137
  35,413
  38,832
  42,397
  46,107
  49,967
  53,981
  58,154
  62,491
  66,999
  71,687
  76,562
  81,635
  86,915
  92,413
EBITDA, $m
  1,972
  2,995
  4,197
  5,584
  7,162
  8,932
  10,896
  13,052
  15,395
  17,924
  20,633
  23,519
  26,577
  29,803
  33,195
  36,750
  40,468
  44,349
  48,393
  52,604
  56,984
  61,538
  66,272
  71,193
  76,308
  81,626
  87,157
  92,911
  98,901
  105,138
Interest expense (income), $m
  0
  2
  26
  55
  89
  128
  172
  222
  276
  336
  402
  472
  547
  627
  712
  801
  895
  994
  1,097
  1,204
  1,316
  1,432
  1,553
  1,679
  1,810
  1,946
  2,087
  2,234
  2,386
  2,545
  2,711
Earnings before tax, $m
  1,492
  2,366
  3,393
  4,579
  5,928
  7,442
  9,121
  10,963
  12,967
  15,129
  17,466
  19,932
  22,546
  25,304
  28,203
  31,242
  34,419
  37,736
  41,193
  44,792
  48,535
  52,428
  56,475
  60,681
  65,054
  69,600
  74,328
  79,248
  84,370
  89,703
Tax expense, $m
  403
  639
  916
  1,236
  1,600
  2,009
  2,463
  2,960
  3,501
  4,085
  4,716
  5,382
  6,087
  6,832
  7,615
  8,435
  9,293
  10,189
  11,122
  12,094
  13,105
  14,156
  15,248
  16,384
  17,564
  18,792
  20,069
  21,397
  22,780
  24,220
Net income, $m
  1,089
  1,727
  2,477
  3,342
  4,327
  5,432
  6,658
  8,003
  9,466
  11,044
  12,750
  14,551
  16,459
  18,472
  20,588
  22,806
  25,126
  27,547
  30,071
  32,698
  35,431
  38,273
  41,227
  44,297
  47,489
  50,808
  54,260
  57,851
  61,590
  65,483

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,250
  6,679
  8,350
  10,270
  12,448
  14,886
  17,585
  20,541
  23,753
  27,213
  30,917
  34,860
  39,035
  43,437
  48,063
  52,911
  57,978
  63,265
  68,774
  74,507
  80,470
  86,669
  93,110
  99,804
  106,760
  113,992
  121,510
  129,331
  137,469
  145,942
Adjusted assets (=assets-cash), $m
  5,250
  6,679
  8,350
  10,270
  12,448
  14,886
  17,585
  20,541
  23,753
  27,213
  30,917
  34,860
  39,035
  43,437
  48,063
  52,911
  57,978
  63,265
  68,774
  74,507
  80,470
  86,669
  93,110
  99,804
  106,760
  113,992
  121,510
  129,331
  137,469
  145,942
Revenue / Adjusted assets
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
  1.765
Average production assets, $m
  2,289
  2,912
  3,640
  4,477
  5,427
  6,490
  7,666
  8,955
  10,355
  11,864
  13,479
  15,197
  17,017
  18,937
  20,953
  23,067
  25,276
  27,581
  29,982
  32,482
  35,081
  37,784
  40,592
  43,510
  46,543
  49,695
  52,973
  56,383
  59,930
  63,624
Working capital, $m
  -630
  -802
  -1,002
  -1,233
  -1,494
  -1,787
  -2,111
  -2,465
  -2,851
  -3,266
  -3,711
  -4,184
  -4,685
  -5,213
  -5,769
  -6,350
  -6,959
  -7,593
  -8,254
  -8,942
  -9,658
  -10,402
  -11,175
  -11,978
  -12,813
  -13,681
  -14,584
  -15,522
  -16,499
  -17,516
Total debt, $m
  480
  1,017
  1,645
  2,368
  3,187
  4,103
  5,118
  6,230
  7,437
  8,738
  10,131
  11,613
  13,183
  14,838
  16,578
  18,400
  20,306
  22,294
  24,365
  26,521
  28,763
  31,093
  33,515
  36,032
  38,648
  41,367
  44,194
  47,134
  50,195
  53,380
Total liabilities, $m
  1,974
  2,511
  3,139
  3,862
  4,681
  5,597
  6,612
  7,724
  8,931
  10,232
  11,625
  13,107
  14,677
  16,332
  18,072
  19,894
  21,800
  23,788
  25,859
  28,015
  30,257
  32,587
  35,009
  37,526
  40,142
  42,861
  45,688
  48,628
  51,689
  54,874
Total equity, $m
  3,276
  4,168
  5,210
  6,409
  7,768
  9,289
  10,973
  12,818
  14,822
  16,981
  19,293
  21,753
  24,358
  27,105
  29,992
  33,016
  36,178
  39,478
  42,915
  46,493
  50,213
  54,081
  58,101
  62,278
  66,619
  71,131
  75,822
  80,703
  85,781
  91,068
Total liabilities and equity, $m
  5,250
  6,679
  8,349
  10,271
  12,449
  14,886
  17,585
  20,542
  23,753
  27,213
  30,918
  34,860
  39,035
  43,437
  48,064
  52,910
  57,978
  63,266
  68,774
  74,508
  80,470
  86,668
  93,110
  99,804
  106,761
  113,992
  121,510
  129,331
  137,470
  145,942
Debt-to-equity ratio
  0.150
  0.240
  0.320
  0.370
  0.410
  0.440
  0.470
  0.490
  0.500
  0.510
  0.530
  0.530
  0.540
  0.550
  0.550
  0.560
  0.560
  0.560
  0.570
  0.570
  0.570
  0.570
  0.580
  0.580
  0.580
  0.580
  0.580
  0.580
  0.590
  0.590
Adjusted equity ratio
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,089
  1,727
  2,477
  3,342
  4,327
  5,432
  6,658
  8,003
  9,466
  11,044
  12,750
  14,551
  16,459
  18,472
  20,588
  22,806
  25,126
  27,547
  30,071
  32,698
  35,431
  38,273
  41,227
  44,297
  47,489
  50,808
  54,260
  57,851
  61,590
  65,483
Depreciation, amort., depletion, $m
  479
  603
  749
  916
  1,106
  1,319
  1,554
  1,812
  2,092
  2,394
  2,696
  3,039
  3,403
  3,787
  4,191
  4,613
  5,055
  5,516
  5,996
  6,496
  7,016
  7,557
  8,118
  8,702
  9,309
  9,939
  10,595
  11,277
  11,986
  12,725
Funds from operations, $m
  1,568
  2,330
  3,226
  4,259
  5,433
  6,751
  8,212
  9,815
  11,558
  13,438
  15,446
  17,590
  19,862
  22,259
  24,779
  27,420
  30,181
  33,063
  36,067
  39,194
  42,447
  45,829
  49,345
  52,999
  56,798
  60,747
  64,854
  69,128
  73,576
  78,208
Change in working capital, $m
  -144
  -172
  -200
  -231
  -261
  -293
  -324
  -355
  -385
  -415
  -445
  -473
  -501
  -528
  -555
  -582
  -608
  -635
  -661
  -688
  -716
  -744
  -773
  -803
  -835
  -868
  -902
  -939
  -977
  -1,017
Cash from operations, $m
  1,712
  2,502
  3,426
  4,489
  5,695
  7,044
  8,536
  10,170
  11,943
  13,853
  15,890
  18,063
  20,363
  22,787
  25,334
  28,001
  30,789
  33,698
  36,728
  39,882
  43,163
  46,573
  50,118
  53,803
  57,633
  61,615
  65,757
  70,066
  74,553
  79,225
Maintenance CAPEX, $m
  -353
  -458
  -582
  -728
  -895
  -1,085
  -1,298
  -1,533
  -1,791
  -2,071
  -2,373
  -2,696
  -3,039
  -3,403
  -3,787
  -4,191
  -4,613
  -5,055
  -5,516
  -5,996
  -6,496
  -7,016
  -7,557
  -8,118
  -8,702
  -9,309
  -9,939
  -10,595
  -11,277
  -11,986
New CAPEX, $m
  -526
  -623
  -728
  -837
  -949
  -1,063
  -1,176
  -1,289
  -1,400
  -1,509
  -1,615
  -1,719
  -1,820
  -1,919
  -2,017
  -2,113
  -2,209
  -2,305
  -2,402
  -2,500
  -2,600
  -2,702
  -2,808
  -2,918
  -3,033
  -3,152
  -3,278
  -3,410
  -3,548
  -3,694
Cash from investing activities, $m
  -879
  -1,081
  -1,310
  -1,565
  -1,844
  -2,148
  -2,474
  -2,822
  -3,191
  -3,580
  -3,988
  -4,415
  -4,859
  -5,322
  -5,804
  -6,304
  -6,822
  -7,360
  -7,918
  -8,496
  -9,096
  -9,718
  -10,365
  -11,036
  -11,735
  -12,461
  -13,217
  -14,005
  -14,825
  -15,680
Free cash flow, $m
  834
  1,421
  2,116
  2,924
  3,850
  4,896
  6,062
  7,348
  8,752
  10,273
  11,903
  13,649
  15,504
  17,465
  19,530
  21,697
  23,967
  26,338
  28,811
  31,386
  34,067
  36,855
  39,753
  42,766
  45,898
  49,154
  52,540
  56,062
  59,728
  63,545
Issuance/(repayment) of debt, $m
  452
  537
  628
  722
  819
  917
  1,015
  1,112
  1,207
  1,301
  1,393
  1,482
  1,570
  1,655
  1,739
  1,823
  1,905
  1,988
  2,071
  2,156
  2,242
  2,331
  2,422
  2,517
  2,616
  2,719
  2,827
  2,941
  3,060
  3,186
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  452
  537
  628
  722
  819
  917
  1,015
  1,112
  1,207
  1,301
  1,393
  1,482
  1,570
  1,655
  1,739
  1,823
  1,905
  1,988
  2,071
  2,156
  2,242
  2,331
  2,422
  2,517
  2,616
  2,719
  2,827
  2,941
  3,060
  3,186
Total cash flow (excl. dividends), $m
  1,286
  1,959
  2,744
  3,646
  4,669
  5,812
  7,076
  8,459
  9,960
  11,575
  13,296
  15,131
  17,073
  19,120
  21,269
  23,520
  25,872
  28,326
  30,882
  33,542
  36,309
  39,185
  42,175
  45,283
  48,513
  51,873
  55,367
  59,003
  62,788
  66,731
Retained Cash Flow (-), $m
  -751
  -892
  -1,042
  -1,199
  -1,359
  -1,521
  -1,684
  -1,845
  -2,004
  -2,159
  -2,312
  -2,460
  -2,605
  -2,747
  -2,887
  -3,025
  -3,162
  -3,299
  -3,437
  -3,578
  -3,721
  -3,868
  -4,020
  -4,177
  -4,341
  -4,512
  -4,692
  -4,880
  -5,078
  -5,287
Prev. year cash balance distribution, $m
  240
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  775
  1,067
  1,701
  2,448
  3,310
  4,291
  5,392
  6,614
  7,956
  9,415
  10,984
  12,671
  14,468
  16,373
  18,382
  20,495
  22,710
  25,027
  27,444
  29,964
  32,588
  35,317
  38,156
  41,106
  44,173
  47,361
  50,675
  54,123
  57,710
  61,444
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  743
  976
  1,481
  2,015
  2,565
  3,114
  3,643
  4,134
  4,570
  4,936
  5,216
  5,407
  5,501
  5,497
  5,397
  5,208
  4,941
  4,609
  4,226
  3,808
  3,371
  2,930
  2,501
  2,094
  1,718
  1,382
  1,088
  837
  630
  463
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Yum China Holdings, Inc. is a restaurant company. The Company's segments include KFC, Pizza Hut Casual Dining, and All Other Segments, including Pizza Hut Home Service, East Dawning, Little Sheep and Taco Bell. As of December 31, 2016, the Company had over 7,500 restaurants in China. Its restaurant base consists of various restaurant concepts. The Company's restaurants in each of its concept offer consumers the ability to dine in and/or carry out food. In addition, KFC, Pizza Hut Casual Dining, Pizza Hut Home Service and East Dawning offer delivery service. KFC is the quick-service restaurant (QSR) brand. Pizza Hut Casual Dining is the casual dining restaurant (CDR) brand. As of December 31, 2016, the Company had over 360 Pizza Hut Home Service units in over 50 cities in China. The Little Sheep concept specializes in Hot Pot cooking. East Dawning is a Chinese food QSR brand. Taco Bell is a QSR brand specializing in Mexican-style food.

FINANCIAL RATIOS  of  Yum China Holdings (YUMC)

Valuation Ratios
P/E Ratio 27.3
Price to Sales 2
Price to Book 5.8
Price to Tangible Book
Price to Cash Flow 15.9
Price to Free Cash Flow 32
Growth Rates
Sales Growth Rate -2.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -14.8%
Cap. Spend. - 3 Yr. Gr. Rate -5.2%
Financial Strength
Quick Ratio 964
Current Ratio 0
LT Debt to Equity 1.2%
Total Debt to Equity 1.2%
Interest Coverage 0
Management Effectiveness
Return On Assets 14.5%
Ret/ On Assets - 3 Yr. Avg. 8%
Return On Total Capital 23%
Ret/ On T. Cap. - 3 Yr. Avg. 13%
Return On Equity 23.4%
Return On Equity - 3 Yr. Avg. 13.2%
Asset Turnover 1.9
Profitability Ratios
Gross Margin 50.4%
Gross Margin - 3 Yr. Avg. 49%
EBITDA Margin 15.9%
EBITDA Margin - 3 Yr. Avg. 11.8%
Operating Margin 9.5%
Oper. Margin - 3 Yr. Avg. 5.5%
Pre-Tax Margin 10%
Pre-Tax Margin - 3 Yr. Avg. 5.8%
Net Profit Margin 7.4%
Net Profit Margin - 3 Yr. Avg. 4%
Effective Tax Rate 23.5%
Eff/ Tax Rate - 3 Yr. Avg. 125%
Payout Ratio 0%

YUMC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the YUMC stock intrinsic value calculation we used $7144 million for the last fiscal year's total revenue generated by Yum China Holdings. The default revenue input number comes from 0001 income statement of Yum China Holdings. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our YUMC stock valuation model: a) initial revenue growth rate of 29.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for YUMC is calculated based on our internal credit rating of Yum China Holdings, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Yum China Holdings.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of YUMC stock the variable cost ratio is equal to 63%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1899 million in the base year in the intrinsic value calculation for YUMC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Yum China Holdings.

Corporate tax rate of 27% is the nominal tax rate for Yum China Holdings. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the YUMC stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for YUMC are equal to 24.7%.

Life of production assets of 4.5 years is the average useful life of capital assets used in Yum China Holdings operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for YUMC is equal to -6.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2765 million for Yum China Holdings - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 383.247 million for Yum China Holdings is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Yum China Holdings at the current share price and the inputted number of shares is $13.7 billion.

RELATED COMPANIES Price Int.Val. Rating
YUMC Yum China Hold 35.80 250.49  str.buy
YUM Yum! Brands 88.79 1.50  str.sell
DPZ Domino's P 259.62 42.30  str.sell
PZZA Papa John' 59.04 8.63  str.sell
FRGI Fiesta Restaur 19.13 9.17  str.sell
LOCO El Pollo Loco 15.89 15.65  buy
WING Wingstop 66.11 6.67  str.sell
BOJA Bojangles' 16.02 26.40  str.buy
MCD McDonald's 183.56 14.99  str.sell
CMG Chipotle Mexic 472.30 365.66  sell

COMPANY NEWS

▶ 7 Chinese Stocks to Buy While Theyre Down   [Nov-09-18 03:17PM  InvestorPlace]
▶ KFC Is Yum Chinas Mule, and Will Be for Quite Some Time   [Nov-02-18 07:46PM  Motley Fool]
▶ Yum! Brands Is Now At an All-Time High -- Time to Sell?   [Oct-02-18 06:31AM  Motley Fool]
▶ Ugly Yum China Stock Is Likely to Fall Further   [Sep-12-18 05:25PM  InvestorPlace]
▶ What Happened in the Stock Market Today   [Sep-11-18 05:05PM  Motley Fool]
▶ Yum China Stock Sinks on No More Buyout News   [12:19PM  InvestorPlace]
▶ Chinese Consortium Plans to Drop Pursuit of Yum China   [Sep-10-18 11:32PM  Bloomberg]
▶ Does Yum China Holdings Inc (NYSE:YUMC) Generate Enough Cash?   [Sep-03-18 11:30AM  Simply Wall St.]
▶ Yum China buyout on back burner   [01:09AM  Reuters]
▶ Closing Bell: LIVE MARKETS BLOG   [Aug-29-18 04:03PM  TheStreet.com]
▶ 7 Best Restaurant Stocks to Bite Into Today   [03:25PM  InvestorPlace]
▶ Big names in the Wednesday blitz   [01:26PM  CNBC Videos]
▶ Yum China rejects $17.6 bln buyout - sources   [07:27AM  Reuters Videos]
▶ [$$] Yum China Bidders May Come Back for Seconds   [06:46AM  The Wall Street Journal]
▶ Yum China Should Have Taken the Money   [05:34AM  Bloomberg]
▶ [$$] Yum China Rejects Private Buyout Offer at $46 a Share   [08:01PM  The Wall Street Journal]
▶ [$$] Yum China Rejects Private Buyout Offer at $46 a Share   [03:22PM  The Wall Street Journal]
▶ [$$] Yum China rejects $17bn buyout offer   [04:38AM  Financial Times]
▶ Great Yum China Deal. Wrong Buyer   [Aug-15-18 04:20AM  Bloomberg]
▶ CIC Said Backing Yum China Buyout   [11:33PM  Bloomberg Video]
▶ [$$] Hillhouse/Yum China: shellfish motives   [07:32AM  Financial Times]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.