Yum China sales continue to grow, but a war price delivery of fierce food may be the morale of investors

However, the shares of the company traded in the company decreased by 6 % on Wednesday, despite strong financial results. The shares later disrupted the losses again, but they are still 3 % low since the profit release.

Analysts refer to one of the potential reasons for the lack of the strong Yum China results and the lack of relief to the investor. The major technology companies in China are being imprisoned in a brutal price war in the area of competitive food delivery in the country, which promises billions of dollars to traders and consumers to win the market share.

This not only vibrates the food delivery market, but companies that make food also-like Yum China-even with the increase in short-term deliveries.

“The investor’s concerns can be partially due to fears that” delivery support may not continue, “HSBC analysts wrote in a report on Wednesday.

CEO Joey Wat launched the “largest dynamic delivery” platform competition in the quarter, to surround post -gain with analysts.

It is the latest sign of how price wars and aggressive discounts – which are surrounded by both officials and business leaders, “irrational consumption” – shake the investor’s belief in the largest China companies.

Food delivery wars

JD.com Enter the food delivery market It has shook a segment controlled by Meituan and Alibaba Ele.me.me. In February, JD unveiled JD Takeaway, Promising zero operations For merchants who joined early. Founder Richard Liu made food delivery a major part of the company’s strategy, especially since the e -commerce giant has fallen compared to its peers in adult technology. Leo Even wearing Uniform to serve meals himself.

The intense battle was worried Both investors And Chinese officials. The shares have decreased in Meituan and JD.com by about 25 % over the past six months. Alibaba increased by 10 % during the same period, however stocks are still less than the March summit.

JD and Alibaba promise to support billions of yuan for both merchants and consumers. The transactions on these platforms increased from 100 million daily requests at the beginning of the year to 250 million by mid -July, according to what he said Southern China Moorenj Post.

In mid -July, the state administration called for the regulation of the market, Chinese market organizations, all the three companies to “encourage rational competition” and “strengthen a healthy ecosystem”.

Chinese officials have begun to back down from aggressive prices throughout the Chinese economy, especially in the EV sector. Officials described this excessive competition “Engagement“In the sense that companies are investing increasing resources to seize their share in the market without receiving a relative return.

On August 1, all three food delivery companies – Meituan, JD and Alibaba –Agree on a truce In price war.

China profits

Yum China was born of Yum Brands’s decision to rotate its Chinese operations in 2016. Yum China now run 16798 outlets around the world in the world, especially KFC and Pizza Hut. (Yum China is No. 373 on Fortune 500, making it one of the few companies in the list of the largest companies in the United States through revenues that make most of their revenues abroad)

Yum China reported 2.8 billion dollars in the last quarter, an increase of 4 % on an annual basis. The company recorded 215 million dollars in net semester income, an increase of 1 %. The company begins in Aggressive In the cities of China of the second degree, hoping for reasonable offers such as coffee and smaller pizza will win low -income consumers.

However, in the midst of strong results, financial director Adrian Ding pointed out that the cost of Yum China workers increased by 0.9 percentage points during the last quarter, reaching 27.2 %, which blamed “higher passenger costs” for an increase in delivery operations.

Delivery is the largest sales source for Yum China, compared to eating and enjoying. Delivery sales grew by 17 % on an annual basis during the first half of 2025, especially among its emerging works such as coffee.

In inviting Yum China’s profits, analysts asked of subsidies and the food delivery war warfare for the company’s profits.

Ding refused to share the specific share of the subsidies that Yum China pays for platform operators, although the suggestion that the largest merchants such as Yum China “enjoy a more favorable subsidy and divide support.” He also emphasized that Yum China expects the margins to remain fixed, and directions that take into account the delivery benefits.

Watt referred to a previous example of the Dorial Support Competition in 2017, the last episode of fierce competition between Meituan and Alibaba. “One of the lessons we learned is (that) we don’t buy sales,” said Watt. Yum China Pizza Hut was “somewhat aggressive” in following the benefits, “but by 2018, when support was withdrawn, business sales suffered slightly.”

“We need to protect price safety,” she said. “Otherwise, it does not only work. The numbers do not work.”