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Tag Archives: KFC
Yum’s new leadership change marks the start of a new period of sustained same-store sales growth for KFC in China, overview by former Reuters journalist Doug Young
Bottom line: Yum’s purchase of a high-end take-out delivery service looks smart in targeting a higher margin, niche product in the competitive space, while McDonald’s and Starbuck’s rapid growth in mobile payments reflects rapid growth of the technology.
Yum buys take-out specialist Sherpa’s
Three of the world’s top restaurant chain operators are in the China headlines as we head into summer, in different moves that reflect their attempts to tap into the nation’s growing love affair with high-tech dining. The most interesting of the headlines has Yum Brands (NYSE: YUM), parent of the KFC and Pizza Hut chains, buying up one of China’s oldest take-out delivery services, hinting at a potential big push into the ultra competitive space. The other two headlines have McDonald’s (NYSE: MCD) and Starbucks (Nasdaq: SBUX) independently releasing new data that show just how hot electronic payments have become for both companies.
As someone living here in China, I have to admit I have completely embraced the country’s homegrown brand of mobile electronic payments, which has quickly become dominated by Ant Financial’s Alipay and Tencent’s (HKEx: 700) WeChat. But at the same time, I’ll also openly admit I’ve eschewed the home delivery services that are also all the rage in China, though the tide seems to be fading as people rediscover the fun of actually going out to eat. Read Full Post…
Bottom line: Yum China’s maiden quarterly report and $300 million share buyback program highlight a company that needs to move more aggressively and take more risks to regain its footing after being spun off from its US parent.
Yum China posts unimpressive maiden quarterly report
Fast food operator Yum China (NYSE: YUM) has just put out its maiden quarterly earnings report that looks decidedly ho-hum, including a somewhat surprising announcement of a $300 million share repurchase program. The operator of KFC and Pizza Hut stores in China was formally split off from its parent, Yum Brands (NYSE: YUM), late last year, following shareholder pressure to let the unit operate more independently in the somewhat unique and fast-changing Chinese market. Read Full Post…
Bottom line: Yum’s China operation could see profit growth accelerate as it steps up its expansion, providing a boost for its newly listed stock over the next 3-5 years.
Yum China eyes big KFC expansion
Fast food giant Yum (NYSE: YUM) is kicking off a publicity blitz in the run-up to the formal spin off of its China business, discussing ambitious growth targets for its biggest global market. It’s not surprising that the operator of the KFC and Pizza Hut brands is focusing on the future, since its China data in the present is far from impressive. That includes a surprise same-store sales decline in its latest quarterly report, and unimpressive profit growth of around 15 percent. Read Full Post…
Bottom line: Yum China’s new stock will post moderate gains of 3-6 percent when trading begins on November 1, while Merchants Securities’ IPO shares will price in the middle of their range and debut flat to up slightly.
Merchants Securities makes HK listing
IPOs are heating up as we head into the fourth quarter of 2016 and companies race to complete offerings before the traditionally slow period between Christmas and Chinese New Year. The last week alone has seen progress on what could be the world’s 2 biggest offerings this year, being made by Postal Savings Bank of China and P2P lender Lufax. (previous post) Now 2 more mega listings are in the headlines, as brokerage Merchants Securities prepares for an IPO in Hong Kong and KFC parent Yum (NYSE: YUM) gets set to spin off and separately list its China unit in New York. Read Full Post…
Bottom line: Yum and McDonald’s are likely to complete spin-offs of their China units by year end, offering a new business template for multinationals that should be encouraged with incentives from Beijing.
Yum names board for China unit
Separate plans by fast food giants KFC and McDonald’s (NYSE: MCD) to spin off their China businesses into separate companies were in the headlines last week, in a new trend that could see other big multinationals take similar steps to address the market’s huge size and unique qualities. Each company is using a slightly different strategy, with KFC parent Yum Brands (NYSE: YUM) choosing a key strategic partner and separate listing for its China unit. By comparison, McDonald’s is simply selling its China stores to a strategic partner in a franchise-style arrangement, while maintaining control of its bigger China operations. Read Full Post…
Bottom line: Yum’s selection of Primavera and Ant Financial to anchor its China unit spin-off look like reasonable choices, as it tries to put the business back on solid footing before a New York IPO that should enjoy modest success.
Yum China sells stake to Primavera, Ant
After months of talks and speculation, fast food giant Yum Brands (NYSE: YUM) has announced that two firms with distinctly financial backgrounds will anchor its plan to spin off its China business. The larger of the investors, private equity firm Primavera, doesn’t look extremely exciting strategically, as it’s mostly a private equity investor with little experience in the tough retail sector. The second investor, Alibaba’s (NYSE: BABA) Ant Financial affiliate, looks a little more interesting since its core Alipay electronic payments service could help to propel Yum’s aging KFC and Pizza Hut brands into the modern era. Read Full Post…
The following press releases and news reports about China companies were carried on August 5. To view a full article or story, click on the link next to the headline.
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Massive Funding, Apple (Nasdaq: AAPL) Backing Helped Didi Outrun Uber in China (English article)
China Starts to Lose Its Taste for McDonald’s (NYSE: MCD) and KFC (NYSE: YUM) (English article)
Tablet PC Sales Fall in Q2, But Lenovo (HKEx: 992), Huawei Post Gains (Chinese article)
Bitauto (NYSE: BITA) Consortium Invests $550 Mln in Yixin Capital (PRNewswire)
Online Children’s English Learning Platform Vipkid Wins $100 Mln Series C Funding (English article)
Bottom line: Recent calls for boycotts of KFC, iPhones and McDonald’s by Chinese patriots are unlikely to result in long-term damage for any of the companies, but could become a problem if any of China’s ongoing territorial disputes escalate.
Chinese patriots call for KFC boycott
It seems China’s restless patriots are back at work following a 4 year break, venting their latest anger at the US by smashing Apple (Nasdaq: AAPL) iPhones and calling for boycotts of KFC. This particular bout of Chinese patriotism follows a ruling 2 weeks ago by an international court that found in favor of the Philippines in a territorial dispute with China. The last major bout of similar patriotism came back in 2012, and involved another territorial dispute between China and Japan. But in that instance, Beijing gave much freer rein to many of the patriots, which resulted in long-term Chinese sales declines for the big Japanese automakers. Read Full Post…
The following press releases and news reports about China companies were carried on July 28. To view a full article or story, click on the link next to the headline.
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Greater China Loses Status as Apple’s (Nasdaq: AAPL) Second Largest Region (Chinese article)
Wanda Buys Movie Portal Mtime for $280 Mln (Chinese article)
Sale of Yum Brands (NYSE: YUM) China Franchise at a Standstill (English article)
Alibaba (NYSE: BABA) Bids for East Europe’s Top Online Auction Site Allegro (Chinese article)
Xiaomi Launches Notebook Computer With Starting Price of 3499 Yuan (Chinese article)
Bottom line: Postal Savings Bank’s IPO is likely to get a moderately strong reception and come close to the upper end of its $10 billion target, while Yum China’s IPO is unlikely to come until the end of this year at earliest.
Yum China spin off plans hit delays
What’s likely to become the world’s biggest IPO in 2 years has just officially launched in Hong Kong, with word that China’s Postal Savings Bank has made its first filing for an offering that could raise up to $10 billion. Meantime, another high-profile IPO by the Chinese unit of fast-food giant Yum Brands (NYSE: YUM) is getting hit by delays, as operator of the KFC chain seeks key local backers in the run-up to a listing that could also come in Hong Kong. The Yum offering could also be quite large at around $2 billion, though it appears the deal may not come now until the end of this year or may even get pushed back to 2017. Read Full Post…
Bottom line: Sanpower’s bid to become McDonald’s main China franchise partner looks like a long-shot, and China Resources or Beijing Capital Agribusiness are the most likely to emerge as winners in a deal valued at $2-$3 billion.
Sanpower eyes McDonald’s
What does global fast-food giant McDonald’s (NYSE: MCD) have in common with niche retailers Brookstone of the US and Britain’s House of Fraser? The answer: All 3 could soon become linked through Chinese conglomerate SanpowerGroup, while already owns the 2 niche retailers and is now making a much bigger bid for most of the McDonald’s stores in China and Hong Kong. Sanpower is the latest company to enter the bidding for the China McDonald’s stores, which are being sold as the US fast food giant moves to a franchise model in the market to replace its previous approach of self-owned stores. Read Full Post…
