Core view
Tracking the rise and fall of the sector: this week, the Shanghai Composite Index fell 1.19%, the Shenzhen Component Index fell 2.08%, and the gem index fell 2.80%. SW hotel sector fell 5.63%, while Huazhu group, the subject of Hong Kong stocks, fell 3.49%.
Industry data tracking: the non manufacturing business activity index rebounded in February, and the hotel operation data was under pressure in March. In February, the business activity index of non manufacturing industry was 51.6%, up 0.5 percentage points from the previous month, higher than the critical point. The overall recovery of non manufacturing industry has accelerated.
From March 6 to March 12, the difference between supply and demand of hotel rooms in China was 11.06 million nights (year-on-year + 47.1%). RevPAR of medium and high-end hotels decreased to 169 yuan (year-on-year – 19.4%); RevPAR of medium and low-end hotels decreased to 104 yuan (year-on-year – 29.1%). This is mainly because the epidemic situation in Jilin, Shandong, Guangdong, Shanghai and other places has been repeated, the control has become stricter, and the demand for business travel has been damaged. Considering that the epidemic situation in Shanghai and Jilin is still severe after March 12, it is expected that the business travel demand in March and April will be affected to some extent.
Industry hot spots: the National Health Commission encourages all localities to take accurate prevention and control measures according to local conditions. The joint prevention and control mechanism of the State Council held a press conference. Liang Wannian, head of the expert group of the epidemic response and disposal leading group of the National Health Commission, said at the meeting that all localities are encouraged to take accurate prevention and control measures according to local conditions, so as to exchange the minimum cost for the maximum social and economic benefits.
Investment suggestion: in the short term, the supply end of the hotel industry is cleared, the demand end is gradually repaired, and the logic of long-term chain and medium and high-end is clear. The leading companies in the industry have strong ability to expand stores and high brand premium. In the long term, they will fully enjoy the growth attributes brought by the rapid expansion of stores and price increase. In the short term, it is suggested to pay attention to the recovery of business travel demand. It is suggested to pay attention to the target Hotels with high market share in China: Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Huazhu group, Btg Hotels (Group) Co.Ltd(600258) .
Risk tip: the epidemic situation is repeated, the speed and structure of store expansion are lower than expected, and the industry competition is intensified.
