Zhou’s views and investment suggestions
Hotel: demand inhibition + supply contraction. Once recovered in the future, the double rise of OCC and ADR is expected to drive the rapid release of performance elasticity. 2q21 has been verified. During the epidemic period, the demand of hotels was significantly restrained, and the transmission speed from OCC to ADR may be faster than the past cycles such as 2008-2012 and 2015-2018. Once there is an obvious recovery, it can be released with great flexibility. 2q21 China’s epidemic situation was well controlled. OCC in Jinjiang, ShouLv and Huazhu increased by an average of 15 PCT year-on-year, with the smallest gap compared with the same period in 2019. ADR increased by 35% on average, 5% on average compared with 2q19, and RevPAR increased by 66% on average. From the growth rate of core indicators compared with the same period in 2019, OCC and ADR changed in the same quarter, and the performance elasticity was released rapidly with the improvement of operation, The net interest rate attributable to the parent company became positive, with an average increase of 22pct compared with 2q20. In addition, over the past two years, the edge of the hotel industry has been cleared obviously. It is estimated that the contraction of supply can bring 2pct improvement to the OCC of the industry, and chain groups with stable pace of opening stores and more reserved hotels may benefit more.
Catering: marginal improvement since the beginning of the year, and some UE efficient brands have stronger toughness. According to the data such as delicious food, the catering flow has been under pressure since the beginning of the year, but there has been a marginal improvement trend. As of February 11, 2022, the number of business stores has returned to 74% of the benchmark day, and the consumption intensity of arrival and takeout has increased by 12.6% and 29.7% on average compared with the benchmark day. According to the data of Yum! China, 4q21 KFC and pizza hut SSSG decreased by 12% and 8% respectively for two consecutive quarters. The operating profit margins at the restaurant level were 8.6% and 5.9% respectively, and decreased by 8.2pct and 4.5pct respectively. The operating pressure is mainly affected by the spread of epidemic diseases in many places in China; Yum China opened 1806 stores in 2021, with a net increase of 1282, exceeding the target of 1000 stores at the beginning of the year, including 392 and 373 stores in Q3 and Q4 respectively. Under the background of repeated epidemics, the speed of opening stores has not decreased. The total monthly number of new stores of top750 catering brands began to decline from the high point in August 2021, and the pace of opening stores slowed down significantly in the second half of the year. We believe that the brand with high efficiency of single store model can better maintain profitability, implement store opening plan and be more resilient under the impact of the epidemic.
It is suggested to pay more attention to the leading hotel industry in the future {25758}; Catering suggestions focus on the main brand single store model, jiumaojiu and Yum China, which are efficient and maintain a stable pace of expanding stores.
Data and announcement tracking
Market review: last week (2022 / 2 / 7 ~ 2022 / 2 / 11), CSI 300 and Hang Seng Index rose 3.0%, 5.8% and social services (Shenwan) rose 4.9% respectively. In terms of breakdown, catering A shares and Hong Kong stock indexes fell 0.6% and 13.8% respectively, and Hotel A shares and Hong Kong stock indexes rose 9.4% and 16.6% respectively.
Industry news: Xiabu Xiabu enters the overseas market; Yang Guofu, qixintian and other Chinese catering enterprises announced their listing plans; The unmanned restaurant of the Winter Olympics has attracted attention.
Announcements of key companies: Btg Hotels (Group) Co.Ltd(600258) , Huatian Hotel Group Co.Ltd(000428) 2021 forecast 2021 annual performance turnaround; Zhongyin Babi Food Co.Ltd(605338) it is predicted that the net profit in 2021 is expected to increase by 74% ~ 80% at the same time; Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) it is proposed to acquire 79% and 70% equity of Junlan and Jinglan hotels for 140 million yuan.
Risk tips
The epidemic situation is repeated, the recovery of terminal demand is less than expected, and the industry competition is intensified
