Unrivaled Supply Chain and Accelerated Franchising Drive Market Share Gains for Yum China

The Chinese restaurant sector continues to face headwinds from the real estate downturn and a lack of economic stimulus, which is weighing on consumer spending. In this environment, we recommend that investors focus on companies that possess the scale to be more aggressive on pricing, as value-oriented players typically perform better during economic downturns. A healthy balance sheet is also crucial.