\u3000\u3000 Btg Hotels (Group) Co.Ltd(600258) (600258)
Event: the company released the performance forecast for 2021, and it is expected to realize the net profit attributable to the parent company of 45-65 million yuan in 2021, reversing the loss year-on-year; Deduct the net profit not attributable to the parent company of 08-12 million yuan, reversing the loss year-on-year.
The whole year turned losses into profits, and Q4 performance was under pressure due to the impact of the epidemic. Benefiting from the improvement of the epidemic prevention and control situation in 2021, the hotel industry as a whole shows a fluctuating recovery trend. The company expects to realize a net profit attributable to the parent company of 45-65 million yuan in 2021 and turn around the loss year-on-year (vs. a loss of 496 million yuan in 2020); The performance forecast corresponds to a loss of about 60-80 million yuan in Q4 net profit attributable to the parent company and 81-85 million yuan in net profit attributable to the non parent company, which is mainly due to: 1) the continuous local epidemic in many parts of the country since late October, which once again disturbed the recovery of travel demand. At the same time, with the approaching of the Winter Olympic Games, the epidemic prevention policies in Beijing and other northern regions are more stringent, According to STR data, RevPAR in Chinese mainland was restored to 82%/60%/74% in the same period of 19 years in 10-12, and the overall recovery level of Q4 was weaker than 21Q3. 2) The company’s direct store revenue accounts for a relatively high proportion, so the rigid cost accounts for a higher proportion, and the profit side is more affected by the epidemic.
More than 1400 new stores were opened throughout the year, and the expansion was accelerated against the trend. In 2021, the company opened more than 1400 new stores, achieving the target at the beginning of the year, a significant increase over 909 stores in 2020, reaching the highest level in the company’s history; Among them, more than 500 cloud hotels have been newly opened, making a high contribution to the new opening; By the end of 2021, there were more than 1600 reserve stores, which also laid a solid foundation for the development of new stores in 2022. We believe that the multiple epidemics since the second half of the year have indeed affected the confidence and financial status of franchisees / investors in the hotel industry to a certain extent, and also dragged down the short-term rhythm of new opening & new signing. It is suggested to closely track the progress of opening & new signing in the first half of the year.
A fixed increase of 3 billion yuan will be implemented to accelerate the medium and high-end layout and brand upgrading. In December 2021, the company completed a fixed increase of 3 billion yuan, of which the major shareholder ShouLv group subscribed 1.03 billion yuan / accounting for 34.4%. The company plans to use 900 million yuan for loan repayment and 2.1 billion yuan for hotel expansion and decoration upgrading. On the one hand, it is conducive to supplement working capital, improve financial structure and enhance the anti risk ability at the bottom of the cycle. On the other hand, it is conducive to the upgrading of stock Direct stores, improve the RevPAR ceiling through upgrading, and promote the accelerated exhibition of medium and high-end brands Yifan and Puyin, It will also provide financial support for lvano to build high-end and luxury hotel product models in the future.
Profit forecast and investment suggestions
As the impact of 21q4 and 22q1 epidemic is still significant, we adjusted the company’s forecast of net profit attributable to the parent company in 2021-23 to RMB 52 / 893 / 1441 million respectively (RMB 422 / 11.00 / 1585 million respectively before adjustment). We used 40 times PE of the comparable company in 2022 for valuation, corresponding to the target price of RMB 31.86, and maintained the “buy” rating.
Risk tips
The epidemic spread beyond expectations; The progress of opening new stores is less than expected; The macroeconomic downturn affects the investment confidence of franchisees
