\u3000\u3000 Btg Hotels (Group) Co.Ltd(600258) (600258)
Event:
Btg Hotels (Group) Co.Ltd(600258) release the announcement of performance pre profit in 2021: the net profit attributable to the parent company is expected to reach 45-65 million yuan in 2021 (a loss of 49.601 million yuan in 2020), an increase of 54.101-56.101 million yuan compared with 2020; Deduct the net profit not attributable to the parent company from 8 to 12 million yuan (a loss of 527.5 million yuan in 2020), an increase of 535.5 to 539.5 million yuan compared with 2020. In the fourth quarter of 2021, the net profit loss attributable to the parent company is expected to be RMB 60.09 million to RMB 80.09 million (RMB 45.09 million in 2020q4), a decrease of RMB 119.1 million to RMB 139.1 million compared with 2020q4; Deducting the loss of net profit not attributable to the parent company from 81.45 to 85.45 million yuan (2020q44528 million yuan), a decrease of 126.73 to 130.73 million yuan compared with 2020q4.
Key investment points:
The repeated impact of the 2021q4 epidemic has made the business pressure in North China more serious. In the fourth quarter of 2021, affected by the repeated epidemic situation across the country, the normal operation of the industry was greatly impacted. The RevPAR of Huazhu group in the fourth quarter of 2021 was – 7.91% month on month and – 12.37% year-on-year. North China, led by Beijing, is the dominant region of the company. However, due to the repeated superposition of the epidemic, the Beijing Winter Olympics preparation, the tightening of prevention and control policies, the limited access of personnel to and from Beijing and the “unnecessary holding of large-scale activities”, we judge that the business environment of the company in the fourth quarter of 2021 is more severe, which has a significant decline compared with 2021q3, which is the main reason for the loss.
Some expenses will be concentrated in the fourth quarter of 2021, further squeezing the profit space. The company’s expenses in the fourth quarter of previous years were higher than those in other quarters. The total sales expenses and management expenses in 2020q4 were 309 million yuan, 68 / 147 / 41 million yuan higher than q1-q3, and the total sales expenses and management expenses in 2019q4 were 1.689 billion yuan, 104 / 173 / 67 million yuan higher than q1-q3. Under the pressure of operation, the cost pressure of the company in the fourth quarter of 2021 is greater, further squeezing the profit space.
Steadily promote the opening of stores and press the line to achieve the goal. In 2021, the company steadily expanded its stores, with more than 1400 new stores opened throughout the year, the highest level in the company’s history, and achieved the goal of 1400-1600 new stores set at the beginning of the year, with the opening speed of 28.60% / year-on-year + 8.17pct; In the fourth quarter of 2021, more than 567 new stores were opened, with the opening speed of 11.58% / year-on-year + 3.47pct. At the same time, at the end of 2021, the company had more than 1600 stores / year-on-year + 31.26%, laying a solid foundation for the development of new stores in 2022.
The first travel group promotes the settlement of horizontal competition with the company. 1) The company’s subsidiary ShouLv Jianguo has signed a five-year discretionary management service agreement with Xinqiao Hotel, a subsidiary of the group. ShouLv Jianguo is expected to charge a management fee of about 7.5 million yuan in total; 2) The company’s subsidiary ShouLv Jianguo signed a 4-year and 11 month discretionary management service agreement with the group’s subsidiary Liangmahe building, and ShouLv Jianguo is expected to charge a management fee of about 5.17 million yuan in total; 3) The company’s subsidiary rujiahemei signed a 10-year commercial property lease agreement with Shangyuan Hotel, a subsidiary of ShouLv group, with a cumulative amount of 86.218 million yuan. The property is mainly used for hotel business.
Investment suggestion: as an industry leader, the company has steadily promoted the store expansion plan under the epidemic, and the scale expansion has been accelerated again. In the short term, due to the impact of the epidemic, the profit is under pressure, but with the gradual calm of the epidemic, the industry will enter the boom stage of simultaneous rise in volume and price after the supply is cleared, and the company is expected to fully release the performance flexibility. We expect that from 2021 to 2023, the company will realize an operating revenue of 6.131/72.97/8.054 billion yuan and a net profit attributable to the parent of 55 / 6.72/1.356 billion yuan, corresponding to 518.35/42.73/21.18xpe. For the first time, give a “overweight” rating.
Risk tip: China’s epidemic has repeatedly affected travel, the speed of expanding stores is lower than expected, the industry competition is intensified, macroeconomic fluctuations and the improvement of management efficiency are lower than expected.
