So VG, you have posted a link which is a regurgitation of a link I posted nine days earlier? I am not quite sure the point you are thinking readers should deduce from this, since your post did not contain your own take on this matter.
What I can say is that whether you consider YUMC is a 'consumer staple' or not (I am not clear on this point), it has been a good place to hide from 'market turmoil' over the last month. As I write this, the YUMC share price is still higher than it was a month ago ($42.41 on 10th February to $43.92 today, a gain of 3.6%) and there is an exchange rate gain for NZ based holders as well ($NZ1 = $US64 at start of period vs $NZ1 = $US63, a gain of 1.6%). Over the same period the DOW (note YUMC is NYSE listed) has declined from 29,276 to 23,851, a drop of more than 18%.
I didn't pick any of this in advance, although my subsequent 'observations', quoted above, may explain what happened 'with the benefit of hindsight'. This is one reason that I prefer to have a few global investments that are not available on the NZX so that I can participate in markets and sectors that are not easily accessible here. One could argue that ATM is an equivalent 'local opportunity' to gain exposure to the consumer food market in China. The ATM share price has risen from $NZ15.75 to $NZ16.10 over the same period, a gain of 2.2%. So ATM has underperformed YUMC over the last month. The historical PE ratio of ATM is now 37 verses only 24 for YUMC. There are other similarities like both companies having no term debt. I like both companies, but the value proposition of YUMC is clearly superior. So YUMC is where my 'China market' money will be staying.
SNOOPY
Bookmarks