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Yum looks to China as its growth leader

LOUISVILLE Ky. Yum! Brands' China division will lead the company's growth this year with a 20 percent increase in operating profit, chairman and chief executive David Novak said during a conference call with stock analysts.

He projected that KFC would add 300 units to its current 1,700 in mainland China; Pizza Hut would add 70 of its casual-dining-style outlets and 20 of its home-delivery units; and that Yum's Chinese concept East Dawning would add an unspecified number of restaurants in Shanghai to gain the scale needed for television advertising.

Marking its 20th year in China with KFC, Yum said plans to add a new products within that brand, including beverages, desserts and other items targeted at young adults. KFC operates in 402 cities in mainland China, and Pizza Hut has casual-dining restaurants in more than 60 cities.

Yum's China division, which includes Thailand and KFC Taiwan, experienced 24-percent systemwide sales growth and 9 percent same-store sales growth in the first quarter, the company reported.

McDonald's, the second-largest U.S. quick-service brand operating in China, currently has almost 800 restaurants there and has said it plans to add at least 100 a year.

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