{"url_path":"/sec/yumc/10-q/2026/item-3","section_key":"item-3","section_title":"Item 3 Quantitative and Qualitative Disclosures About Market Risk","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-08","source_url":"https://www.sec.gov/Archives/edgar/data/1673358/0001193125-26-213131-index.html","accession_number":"0001193125-26-213131","cik":"0001673358","ticker":"YUMC","issuer_name":"Yum China Holdings, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1673358/0001193125-26-213131-index.html","primary_entity_key":"0001673358","primary_entity_name":"Yum China Holdings, Inc."},"word_count":303,"has_tables":true,"body_markdown":"Item 3. Quantitative and Qualitative Disclosures About Market Risk\n\n \n\nForeign Currency Exchange Rate Risk\n\n \n\nChanges in foreign currency exchange rates impact the translation of our reported foreign currency denominated earnings, cash flows and net investments in foreign operations, virtually all of which are denominated in RMB. While substantially all of our supply purchases are denominated in RMB, from time to time, we enter into agreements with third parties to purchase certain amount of goods and services sourced overseas and make payments in the corresponding local currencies at predetermined exchange rates when practical, to minimize the related foreign currency exposure with immaterial impact on our financial statements.\n\n \n\nAs substantially all of the Company’s operations are located in China, the Company is exposed to movements in the RMB foreign currency exchange rate. For the quarter ended March 31, 2026, the Company’s Operating profit would have decreased by approximately $42 million, if the RMB weakened 10% relative to the U.S. dollar. This estimated reduction assumes no changes in sales volumes or local currency sales or input prices.\n\n \n\nCommodity Price Risk\n\n \n\nWe are subject to volatility in food costs as a result of market risk associated with commodity prices. Our ability to recover increased costs through higher pricing is, at times, limited by the competitive environment in which we operate. We manage our exposure to this risk primarily through pricing agreements with our vendors.\n\n \n\nInvestment Risk\n\n \n\nIn September 2018, we invested $74 million in 8.4 million of Meituan’s ordinary shares. The Company sold 4.2 million of its ordinary shares of Meituan in the second quarter of 2020 for proceeds of approximately $54 million. Equity investment in Meituan is recorded at fair value, which is measured on a recurring basis and is subject to market price volatility. See Note 3 for further discussion on our investment in Meituan."}