Goldman Sachs has released a research report stating that it has raised its 12-month price target for Yum China (09987) from HK$459 to HK$467, while maintaining its Buy rating as a Conviction List pick.

The bank has slightly increased its net profit forecasts for the company for 2026 to 2028 by approximately 1% to 2%, as stronger RMB exchange rate assumptions and accelerated expansion and royalty fee savings following the Pizza Hut brand acquisition are sufficient to offset the impact of a slower same-store sales outlook for the second half of the year and 2027 to 2028.

Goldman Sachs expects Yum China to report its third-quarter 2026 results in early November, with sales, restaurant profit, and operating profit growing 9.3%, 9.2%, and 10.4% year-on-year respectively, or 3.4%, 3.3%, and 4.5% respectively on a constant currency basis.

The bank anticipates that same-store sales for both KFC and Pizza Hut in the third quarter will grow 1% compared to the second quarter, equivalent to 89% and 86% of pre-pandemic levels respectively. Net new store openings in the third quarter are projected to reach 470, bringing the total store count to 19,767.