DCF Tool

YUMC

Yum China Holdings Inc – Food Service Contractors
Yum China Holdings, Inc. is a licensee of Yum! Brands in mainland China. It has exclusive rights in mainland China to KFC, China's leading quick-service restaurant brand, Pizza Hut, the leading casual dining restaurant brand in China, and Taco Bell, a California-based restaurant chain serving innovative Mexican-inspired food. Yum China also owns the Little Sheep, Huang Ji Huang, East Dawning and COFFii & JOY concepts outright. In addition, Yum China has partnered with Lavazza to explore and develop the Lavazza coffee shop concept in China. The Company had 10,506 restaurants in over 1,500 cities at the end of December 2020. Yum China ranked # 361 on the Fortune 500 list for 2020. Yum China has been named the Industry Leader for the Restaurant & Leisure Facilities Industry in the 2020 Dow Jones Sustainability Indices. In 2021, Yum China was named to the Bloomberg Gender-Equality Index and was certified as a Top Employer 2021 in China by the Top Employers Institute, both for the third consecutive year.
Analysis Results
Intrinsic Value $3.92
Latest Price $42.19
Relative Value 976% overvalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -13.2%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.5%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -13.2%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 220 201
2023 191 160
2024 166 127
2025 144 100
2026 125 79.5
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 1710 million. This corresponds to a present value of 994 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 667 million. Adding in the terminal value gives a total present value of 1660 million.

There are presently 424.0 million outstanding shares, so the intrinsic value per share is 3.92.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 4,716,000,000
Current Cash 3,996,000,000
Current Liabilities 2,383,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,663,000,000
Change in NCWC -269,000,000
EBIT 820,000,000
Tax Provision 369,000,000
Depreciation and Amortization 516,000,000
Capital Expenditure -689,000,000
Unlevered Free Cash Flow 160,629,310
Current Assets 4,936,000,000
Current Cash 4,263,000,000
Current Liabilities 2,067,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,394,000,000
Change in NCWC -260,000,000
EBIT 793,000,000
Tax Provision 295,000,000
Depreciation and Amortization 450,000,000
Capital Expenditure -419,000,000
Unlevered Free Cash Flow 352,867,328
Current Assets 2,259,000,000
Current Cash 1,657,000,000
Current Liabilities 1,736,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,134,000,000
Change in NCWC -445,000,000
EBIT 946,000,000
Tax Provision 260,000,000
Depreciation and Amortization 428,000,000
Capital Expenditure -435,000,000
Unlevered Free Cash Flow 248,775,672
Current Assets 1,952,000,000
Current Cash 1,388,000,000
Current Liabilities 1,253,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -689,000,000
Change in NCWC -210,000,000
EBIT 895,000,000
Tax Provision 214,000,000
Depreciation and Amortization 445,000,000
Capital Expenditure -470,000,000
Unlevered Free Cash Flow 458,389,473
Current Assets 1,802,000,000
Current Cash 1,264,000,000
Current Liabilities 1,017,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -479,000,000
Change in NCWC 63,000,000
EBIT 829,000,000
Tax Provision 381,000,000
Depreciation and Amortization 409,000,000
Capital Expenditure -415,000,000
Unlevered Free Cash Flow 496,062,962
Current Assets 1,426,000,000
Current Cash 964,000,000
Current Liabilities 1,004,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -542,000,000
Change in NCWC 32,000,000
EBIT 716,000,000
Tax Provision 158,000,000
Depreciation and Amortization 402,000,000
Capital Expenditure -436,000,000
Unlevered Free Cash Flow 545,654,761
Current Assets 799,000,000
Current Cash 425,000,000
Current Liabilities 948,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -574,000,000
Change in NCWC 56,000,000
EBIT 567,000,000
Tax Provision 168,000,000
Depreciation and Amortization 425,000,000
Capital Expenditure -512,000,000
Unlevered Free Cash Flow 343,951,612

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