This article only represents the author's own views.

Yum China Holdings Inc. (YUMC.US; 9987.HK) has seen the future of fast food in China, and that future lies in the nation’s thousands of smaller cities that currently have few or none of the slick fast-food eateries that have become common in major centers like Shanghai and Beijing.

Such smaller cities accounted for over half of the nearly 1,700 new stores opened last year by the master franchisee for KFC and Pizza Hut restaurants in China, according to its fourth quarter report released on Tuesday. The new openings marked a record for Yum China, beating its previous target of 1,400 to 1,600 stores for the year. The company ended 2023 with 14,644, stores, and said it is aiming for double-digit growth this year as it marches towards its goal of 20,000 total stores by 2026.