Yum China Holdings Inc

Solid Q2 performance across the board (and outperforming the industry) - Revenue +13% YoY, Operating Profit +14% YoY, diluted EPS +21% YoY (partly supported by favorable FX). - System sales +6% YoY excluding FX (improved sequentially from 4% in Q1), and same-store sales +1% (driven by 14th straight quarter of positive same-store transaction growth). - OP margin expanded despite cost pressure; company reported Q2 OP margin 11.1% (+20 bps YoY) and Operating Profit $348m (record) +7% YoY.

Growth engines + store expansion acceleration (KFC leading; Pizza Hut restarting positivity) - Net new store openings: 560 in Q2; expansion accelerated year-over-year across both equity & franchise. - KFC remains #1 growth driver: - KFC system sales +7% YoY, same-store +1%; same-store transactions +4% offset by ticket average -3% YoY (ticket average down CNY 36 due to smaller orders from new segments/locations). - Restaurant margin +20 bps to 17.1%; KFC OP margin also +20 bps. - Pizza Hut is improving and accelerating new stores: - Pizza Hut same-store turned positive (+1%) after being negative/weak previously (returned to growth). - New store openings nearly doubled vs Q2 last year; 381 net new stores in 1H, nearly matching all of 2025. - Key opportunities: “side-by-side” modules scaling (focusing on new occasions and lighter meals).

Margins: resilient but pressured by delivery/rider economics; some offset from efficiency - Major negative pressure came from delivery mix: delivery riders rising as delivery sales mix increased from 45% last year to 54% this year. - Group Q2 margin pressure: - Restaurant margin ~16.1% (flat YoY). - Cost of labor +40 bps YoY, rider cost headwinds drove a ~140 bps margin impact (though partly offset by store operations). - Cost of sales +50 bps YoY, packaging higher due to delivery mix and Pizza Hut menu items still being optimized. - Management expectation: Q3 Pizza Hut restaurant margin stable to slightly positive YoY and incremental rider cost pressure moderates in Q3 vs H1/H1 base effects.