\u3000\u3000 Btg Hotels (Group) Co.Ltd(600258) (600258)
Events
The company issued the announcement on the advance increase of annual performance in 2021. It is estimated that the net profit attributable to the parent company in 2021 will be about 45 ~ 65 million yuan, with a year-on-year increase of 541 ~ 561 million yuan; The net profit deducted from non parent company is about 08 ~ 12 million yuan, with a year-on-year increase of 536 ~ 540 million yuan.
The annual performance turned losses into profits, and technology enabled to improve operation efficiency and service experience
In 2020, due to the impact of the epidemic, the hotel industry suffered a heavy blow and the company suffered losses. In 2021, with the improvement of the epidemic prevention and control situation, the business travel market recovered, and the recovery trend of the hotel industry was obvious. The company’s hotels are mainly distributed in Beijing, Jiangsu, Zhejiang, Shanghai, Guangzhou, Shenzhen, Sichuan and Chongqing. The consumption upgrading is superimposed, the regional structure of business travel is inclined, and the income recovers rapidly. In 2021q4, the epidemic situation in Zhejiang and other places has repeatedly caused short-term impact, resulting in Q4 performance fluctuation. In 2021q4, the net profit attributable to the parent company is about – 80 ~ – 60 million yuan in a single quarter; The net profit deducted from non parent company is about -85 ~ -81 million yuan. The periodic epidemic disturbance did not change the overall recovery trend, and the company turned losses into profits in the whole year. With the help of technology empowerment, the company vigorously develops business online management and digital platform, improves customer check-in experience and hotel operation efficiency, helps the company reduce costs and increase efficiency, and is expected to further drive the improvement of profitability in the future.
The company has clear planning and accelerated the exhibition of stores, focusing on medium and high-end and cloud hotels
In 2020, the company plans to ten thousand stores in the next three years, with the number of new stores exceeding 1400 in 2021, reaching a record high, including more than 500 in Q4; By the end of 2021, the company had more than 1600 reserve stores. (1) The company’s new stores are mainly based on Franchise mode. As of 2021q3, the proportion of franchise stores has reached 86%. The proportion of franchise stores of the company has increased. While smoothing the periodicity of direct sales mode, it is expected to drive the further improvement of profitability. While adopting the franchise model to expand stores, the company has launched a cloud Hotel model with small investment, light management and high empowerment. It has deeply cultivated and sunk the market and made efforts to develop small and medium-sized single hotels. In 2021, 550 cloud hotels were newly opened, with a total of 1505 opened. Cloud hotel charges according to room volume and city level to enhance profit stability. (2) The demand for consumption upgrading shifted to the medium and high-end, superimposed that the growth rate of economic house prices was lower than the cost, and the profit narrowed, forcing the company to upgrade its product structure and focus on medium and high-end brands to further improve its profitability. By 2021q3, there were 1312 medium and high-end hotels, accounting for 24.1%, and 143000 guest rooms, accounting for 31.3%.
Investment advice
Under the influence of the epidemic, the chain rate has increased, and the leading advantage of the hotel has been highlighted. The company accelerated the expansion of stores, laid out medium and high-end hotels, and launched cloud hotels to deepen the market and develop small and medium-sized single hotels. With the weakening of the impact of the epidemic, the demand is expected to fully recover, driving the release of the company’s performance. We expect that the company’s EPS from 2021 to 2023 will be 0.05, 0.49 and 0.70 yuan / share respectively, corresponding to 481, 53 and 36 times of the current share price PE respectively. Maintain the “buy” rating.
Risk tips
The epidemic repeatedly affected the recovery of demand, and the speed of expanding stores was lower than expected.
