Why Yum China’s Stock Fell 13%

03:10 09/11/2018

It’s fair to say Yum China YUMC  shareholders aren’t having a good day. The stock is down 13% on the day after a Chinese consortium including Hillhouse Capital and KKR & Company decided to drop its takeover bid for YUMC. And it’s unlikely we’ll see any new bids come to the table. According to Bloomberg, “a trade war between the U.S. and China risks hurting Yum China’s business. While a full-out trade battle is unlikely to affect the chain’s procurement or costs, it could incite anti-U.S. sentiment and hurt sales at Pizza Hut and KFC as consumers shift spending to other restaurant brands.” We also have to consider that consumer spending in China is softening. However, despite the news YUMC has noted it’s not backing down from expansion plans that will see it more than double the number of stores to 20,000

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