YUMC changes
Pick any two versions below to diff them.
- Balance sheet
- Yum China had almost no bank debt at June 30, 2026. Short-term bank borrowings were $66 million. Against this, it had cash of $485 million, short-term investments of $901 million and long-term bank deposits and notes of $688 million. Thus it had net cash of about $2.0 billion. Its largest fixed obligations are leases, with operating lease liabilities of about $2.2 billion. The reason is that it runs most of its own restaurants in rented sites. On August 7, 2026, it paid $1.2 billion for the Pizza Hut brand in Mainland China. It used an offshore, unsecured bridge loan in renminbi of up to CNH 8.4 billion, at an estimated rate of about 2%. The first maturity is 180 days after funding, and the company can extend it to 364 days. The loan has covenants: interest cover of at least 3.0 times and leverage of not more than 2.5 times. The company must prepay the loan if the shares are delisted in both New York and Hong Kong. On a simple pro forma basis, this cuts the net cash to below $1 billion until the company finds long-term financing. Most cash sits with subsidiaries in Mainland China. Money that leaves China is subject to currency controls and withholding tax. A VIE structure applies only to the small Daojia business. Unused credit facilities were about $1.38 billion, and equity was $5.36 billion. Interest income was larger than interest expense. Thus the balance sheet still supports the plan to return about $1.5 billion a year to shareholders. But the company must refinance the bridge loan by August 2027 at the latest. As of 2026-06-30.
- Checkpoints
- Aug 7, 2026: Pizza Hut brand purchase in Mainland China closes. Passed. Watch: Closing with the bridge loan in place and no change to capital returns passes; a failed closing fails. Outcome: Yum China completed the $1.2 billion purchase on August 7, 2026, funded by a renminbi bridge loan at about 2%. Nov 2, 2026 (estimate): Q3 2026 results: same-store sales and delivery costs. Pending. Watch: Same-store sales growth above 1% with a stable restaurant margin passes; negative same-store sales or a margin fall from delivery costs fails. Feb 2027 (estimate): Full-year 2026 results: 20,000 stores and bridge loan plan. Pending. Watch: About 20,000 stores at the end of 2026, a Pizza Hut margin gain near 2.8 points and a long-term bridge loan plan pass; a missed store target or a costly refinancing fails. Aug 2027 (estimate): Bridge loan final maturity (364 days after funding). Pending. Watch: Refinancing or repaying the about $1.2 billion bridge loan without a cut to buybacks or dividends passes; a cut to capital returns to repay it fails.