MeritValue

Yum China Holdings, Inc.

YUMCdata completeness 100%12 fiscal years on file
The thesis, from the filings

Yum China Holdings, Inc. earns about 18% on invested capital, comfortably above its ~9% cost of capital, and has bought back 15% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $25.45 and $35.73 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$9.85B1$9.57B2$11B3$11.3B3$11.8B3
Net income$990M4$442M5$827M6$911M6$929M6
Operating cash flow$1.13B7$1.41B8$1.47B9$1.42B9$1.47B9
Capital expenditure$689M10$679M11$710M12$705M12$626M12
Free cash flow (derived)$442M7$734M8$763M9$714M9$840M9
Total debt—$2M13$168M14$127M15$30M15
Cash & equivalents$1.14B16$1.13B17$1.13B18$723M19$506M19
Diluted shares434.0M425.0M420.0M390.0M371.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$144.99
your share of equity
Profit it earned you last year
$25.04
Free cash flow it threw off
$22.64
Debt you’d be carrying
$0.81

10 shares is a claim on $144.99 of net worth that earned you $25.04 and generated $22.64 of cash last year, against $0.81 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
18% avg · 5y
FY21 18%FY22 10%FY23 19%FY24 21%FY25 22%

It earned about 18% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
−15% shares · 5y

Share count is down 15% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 1400% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $25.45 and $35.73 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$35.73
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth3.2%
  • fcfBase$763M
DCF · Growth Exit 5Y
$35.01
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth3.2%
  • fcfBase$763M
Earnings Power Value
$25.45
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$911M
  • growthAssumed0.0%
Graham Number
$28.61
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years3.2%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $35.01
The three cases
Bear0.0%$30.67
Base3.2%$35.01
Bull8.2%$42.98

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 3.2%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000950170-24-023147 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0000950170-25-029134 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-082824 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000950170-24-023147 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000950170-25-029134 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-082824 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000950170-24-023147 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000950170-25-029134 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001193125-26-082824 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000950170-24-023147 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000950170-25-029134 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001193125-26-082824 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-12-31 · accession 0000950170-24-023147 (ShortTermBorrowings)
  14. 10-K · period ending 2023-12-31 · accession 0000950170-25-029134 (ShortTermBorrowings)
  15. 10-K · period ending 2024-12-31 · accession 0001193125-26-082824 (ShortTermBorrowings)
  16. 10-K · period ending 2021-12-31 · accession 0000950170-23-005571 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2022-12-31 · accession 0000950170-24-023147 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-12-31 · accession 0000950170-25-029134 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-12-31 · accession 0001193125-26-082824 (CashAndCashEquivalentsAtCarryingValue)