Yum China Holdings said it has partnered with Sinopec Corp and China National Pe...
* Tie-up to open more than 100 outlets in next 3 years
* Yum China says to expand to 10,000 restaurants by 2021
* Expects restaurant margin to face pressure in H1 2019 (Updates with CEO quote, more details)
By Brenda Goh
SHANGHAI, March 12 (Reuters) - Yum China Holdings said it has partnered with Sinopec Corp and China National Petroleum Corporation (CNPC) to open more than 100 franchise restaurants at the oil giants’ gas stations in China.
Yum China said the partnership aims to open the franchise stores over the next three years, adding that Sinopec and CNPC collectively operate over 50,000 gas stations in the country.
It did not disclose financial details of the tie-up that it announced at its investor day held in Shanghai on Tuesday.
“We expect these partnerships will enable us to expand our portfolio and reach a previously underserved segment of the market, while creating significant value for Sinopec and CNPC,” Yum China CEO Joey Wat said in a statement.
The firm, however, cautioned its restaurant margin would come under pressure in the first half amid rising poultry prices and ongoing value promotions, but that it had the capacity to return $1.5 billion to shareholders over the next three years.
The New York-listed firm, spun off from Yum Brands Inc in 2016, owns Pizza Hut, KFC and Taco Bell in the country and is the largest fast-food operator in China with more than 8,400 outlets in over 1,200 cities.
Yum China said it plans to expand its restaurant portfolio to 10,000 by 2021, which excludes the potential expansion of its standalone coffee brand, Coffii & Joy.
Yum China in February reported a 6 percent year-on-year rise in total system sales for the fourth quarter, led by its fried chicken brand KFC whose system sales rose 9 percent. (Reporting by Brenda Goh; Editing by Himani Sarkar)