\u3000\u3000 Btg Hotels (Group) Co.Ltd(600258) (600258)
Event: the company released the performance forecast for 2021. The company expects to realize the net profit attributable to the parent company of 45-65 million yuan in 2021, reversing the loss year-on-year (the same period in 2020 was -496 million yuan), and deducting the net profit not attributable to the parent company of 8-12 million yuan, reversing the loss year-on-year (the same period in 2020 was -528 million yuan). The company estimates that the net loss attributable to the parent company in the single quarter of 2021q4 is RMB 60.09-80.09 million, and the net loss deducted from non attributable to the parent company is RMB 81.45-85.45 million.
Key investment points
The continuous fermentation of the epidemic disturbs the recovery process, and the performance of 2021q4 is under significant pressure. Since the second half of 2021, the epidemic has continued to escalate in many places across the country. After the national day of 2021, the epidemic broke out sporadically and mostly concentrated in economically developed areas. At the end of 2021, delta or Omicron epidemic occurred again in Xi’an / Zhengzhou / Tianjin / Guangdong / Shanghai / Beijing. The net profit attributable to the parent company recorded a loss of RMB 60.09-80.09 million in the single quarter of 2021q4. Compared with 2021q3 (net profit attributable to the parent company of RMB 59.87 million), the company turned from profit to loss. Under the severe form of epidemic prevention, the demand for business travel and cultural travel continued to be under pressure. At the same time, the company actively adapts to the market demand, adjusts its business and products, and grabs the revenue. We expect its performance at the revenue end may still be stable.
Hotels opened in 2021 hit a record high with abundant reserves and accelerated layout at the bottom. According to the data of China Hotel Association, in 2020 Btg Hotels (Group) Co.Ltd(600258) , the market share of chain hotel industry calculated by the number of hotel rooms reached 9.2%, ranking third. We believe that the bottom of the industry is still a good opportunity for the layout of hotel leaders and continue to guide the market reform. Relying on the advantages of scale, brand, member resources and capital, the company has further accelerated the expansion of stores against the market. In 2021, the company opened more than 1400 new stores, setting a record high in the company’s history. In the short term, after the end of the Winter Olympic Games and the lifting of relevant travel restrictions and the gradual recovery of the epidemic in many places, the demand for hotels in Beijing, Shanghai and other places is expected to rebound rapidly in 2022q1. In addition, the company applies 5g, cloud computing, artificial intelligence and other digital technologies to fully promote the digital construction of the hotel and improve the guest service experience and hotel operation efficiency.
We will continue to promote multiple strategies to help long-term development. In September 2021, the company launched the global purchase platform of the first trip. In October, the first trip noan hotel management company was established to accelerate the layout of high-end hotels. The diversified business is expected to increase its performance in the medium and long term. In December 2021, the company will raise an additional 3 billion yuan, of which about 900 million yuan will be used to repay loans and 2.1 billion yuan will be used for hotel expansion, decoration and upgrading projects, so as to further deepen the national layout and optimize consumers’ check-in experience. At the end of 2021, the company had more than 1600 stores in reserve, laying a solid foundation for the development of new stores in 2022. In the long run, we believe that the recovery of the national accommodation industry after the epidemic recovery and the further improvement of the industry concentration are expected to bring greater performance flexibility.
Profit forecast and investment rating: the epidemic continues to drag down the company’s short-term performance. We believe that the industry is still in a tortuous recovery cycle. It is conservatively assumed that the epidemic will continue to repeat in 2022 and continue to impact the hotel RevPAR. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be 0.6/7.8/1.11 billion yuan (the previous value is 4.2/11.2/1.38 billion yuan), and the compound growth rate of net profit attributable to the parent company from 2021 to 2023 will be 324.3%. The current stock price corresponds to dynamic pe465 / 37 / 26 times. The company continued to counter the trend, adding more than 1400 companies in 2021. If the epidemic is stable, the company’s performance is expected to show greater flexibility and maintain the “buy” rating.
Risk tip: the repeated epidemic has caused macroeconomic fluctuations, intensified industry competition, and the risk of hotel operation & expansion is lower than we expected.
