Longleaf Partners Q4 2017 Report

The Longleaf Partners International Fund recently published their 4Q shareholder letter, which you can download and read here. The letter includes commentary on a number of the Asian companies in their portfolio, including Melco International, CK Asset and Yum China.

Some highlights on Yum China below (a direct excerpt from their letter):

Yum China: “…the operator of KFC and Pizza Hut restaurants in China, was a significant contributor to performance during the year and continued to rise in the fourth quarter. Since its November 2016 spin out from Yum Brands!, YUM China (YUMC) has delivered strong results including KFC’s 7% same store sales growth year-over-year in Q3 2017. The company returned much of its growing FCF to shareholders, initiating a cash dividend of $0.10/share, buying back stock, and expanding its buyback program from $300mm to $550mm. The announcement that COO Joey Wat will become CEO and current CEO Micky Pant will become Vice-Chairman in March 2018 created additional optimism. Wat has been instrumental in KFC’s success, and we believe she will continue to create significant value. With the stock’s rapid appreciation more closely reflecting the company’s worth, we reduced the portfolio weight of YUMC.”