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Research Alert: Yum China Q1 In Line; Aggressive Expansion, Digital Growth Support Outlook

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-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

YUMC reported Q1 2026 revenue growth of 10% to $3.27B, in line with consensus of $3.23B, with system sales up 4% and steady same-store sales. The quarter featured record store expansion with 636 net openings (39% by franchisees), bringing the total count to 18,737 and supporting the 20,000+ store target by year-end 2026. We view the franchise acceleration as supporting capital efficiency, though benefits may be limited in lower-tier cities due to varying price points and higher customer acquisition costs, in our opinion. Management remains confident in achieving 2026 targets, citing improved delivery platform dynamics and a dual focus on innovation and efficiency. Core operating margin expanded 20 bps to 13.6% for the eighth consecutive quarter, with Pizza Hut gaining 110 bps while KFC fell 20 bps due to its margin-dilutive delivery mix. Digital membership grew 9% to 270M, underpinning customer capabilities. Starting in 2027, YUMC plans to return 100% of annual FCF, translating to $900M-$1B+ annually.

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CGI Down 2.15% In US Premarket With Q2 Adjusted Earnings In Line, Revs Miss

CGI (GIB-A.TO, GIB) was down more than 2% in US premarket trade Wednesday after it reported in line adjusted earnings but lower than expected revenues for the second quarter, said the company on Wednesday.For the second quarter of Fiscal 2026, the company's net earnings were C$444.7 million, compared to $429.7 million in the corresponding year-ago quarter. Diluted earnings per share for the quarter were $2.09 compared to $1.89 in the same period last year.Second-quarter adjusted net earnings were $483.4 million, compared with $480.7 million in the same period last year. Adjusted diluted earnings per share for the quarter was $2.27, compared to $2.12 for the same period last year. The consensus estimates compiled by FactSet for Non GAAP EPS was $2.27 per share.The company's second-quarter revenue was near $4.16 billion, compared to $4.02 billion in the year-ago quarter. The consensus estimates compiled by FactSet for sales was near $4.24 billion.As of March 31, 2026, the company's backlog reached $31.50 billion, representing 1.9 times annual revenue, said the company. Cash provided by operating activities of $451.1 million, represented 10.9% of revenue and $2.47 billion or 15.1% of revenue on a trailing 12 month basis while bookings were $4.31 billion, for a book-to-bill ratio of 103.8% or 108.4% on a trailing 12 month basis, it added.On April 28, 2026, the company's unsecured committed revolving credit facility was increased to $2.50 billion and is now comprised of a three-year tranche of $1.00 billion which matures in 2029 and a five-year tranche of $1.50 billion which matures in 2031, said the company and added that both tranches can be further extended.On April 28, 2026, CGI's board of directors approved a quarterly cash dividend of $0.17 per share, unchanged from the prior quarter. This dividend is payable to holders of Class A subordinate voting shares and Class B shares (multiple voting) on June 19, 2026, to shareholders of record as of the close of business on May 15, 2026, added the company."CGI delivered a strong first half of the fiscal year, with industry-leading EPS accretion and cash generation," said Francois Boulanger, President and Chief Executive Officer. "Even in the context of today's dynamic business environment, this performance reflects the resilience of our business model, the relationships with our clients, and the outstanding expertise of our global team. As clients continue to invest in AI, they need a trusted partner to address mission-critical environments, modernize complex legacy estates, and deliver measurable outcomes. CGI's AI-first strategy-focused on making AI real and outcome-driven-positions us well to help clients across every industry and geography."

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Capital Power's Q1 Net Income Falls YoY

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