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Yum China Holdings, Inc. (YUMC)
Intrinsic Value (DCF)
Current$48.19
→
Intrinsic$28.92
-40%
$18.42$28.92$48.87
Market implies 19% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $48, the market prices in continued high-teens cash flow growth (19%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $18 → Bull $49. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $35 | $39 | $43 | $47 |
| 10% | $24 | $26 | $29 | $32 |
| 12% | $18 | $19 | $21 | $23 |
| 14% | $14 | $15 | $17 | $18 |
Bull Case
- Bull case ($49) offers 1% upside at 10% growth, 9% discount
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($18) implies 62% downside at 6% growth, 12% discount
- Price reflects 19% growth expectations vs 8% historical — high bar to clear
- Trading 40% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$771.12M
Year 2$832.81M
Year 3$899.43M
Year 4$971.39M
Year 5$1.05B
Terminal$15.44B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$714.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.