\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 754 Shanghai Jin Jiang International Hotels Co.Ltd(600754) )
Performance summary: in 2021, the company achieved an operating revenue of 11.34 billion yuan (year-on-year + 14.6%) and a net profit attributable to the parent company of 100 million yuan (year-on-year – 8.7%), deducting a loss of 120 million yuan of non attributable net profit and reducing a loss of 550 million yuan. By quarter, Q1 ~ Q4 achieved revenue of 23.0/29.6/30.9/3 billion yuan respectively, and the corresponding net profit attributable to the parent company was -1.8/1.9/0.9/04 billion yuan respectively.
By Region: the recovery rate of domestic RevPAR is 83%, deducting non net profit to turn loss into profit. From January to December 2021, the RevPAR of the same hotel in China was 134.9 yuan / room (year-on-year + 9.7%, recovering to 83% in 19 years), and the average OCC was 64.7% (year-on-year + 2.4pp); By grade, the recovery rate of economy hotels is 77%, and that of middle-end hotels is 83%. Domestic hotels achieved a revenue of 8.8 billion yuan (year-on-year + 13%) in 21 years, corresponding to a net profit attributable to the parent of 440 million yuan (year-on-year – 49%), deducting a net profit not attributable to the parent of 370 million yuan (year-on-year increase of 410 million yuan). The recovery rate of overseas RevPAR was 67%, and the loss was halved. From January to December 2021, the RevPAR of the company’s overseas hotels was 24.9 euros / room (year-on-year + 25%, recovering to 67% in 19 years), and the average OCC was 46.0% (year-on-year + 8.9pp); By grade, the recovery rate of economy hotels is 67%, and that of middle-end hotels is 69%. Overseas hotels achieved a revenue of 300 million euros (year-on-year + 29%) in 21 years, corresponding to a net profit attributable to the parent company of – 60 million euros (a year-on-year loss of 50 million euros).
In the 22-year plan, 1500 new companies will be opened and 2500 will be signed. The goal of “doubling in three years” will continue to be fulfilled. As of December 31, 2021, the company has 10613 stores and 5517 mid-range brands (accounting for 52%), including 1169 Vienna hotels (+ 181) and 896 Lifeng hotels (+ 177). Franchise stores accounted for 91.3% of all hotels opened. According to the company’s plan of “doubling in three years” at the end of 20 years, the company has an average annual net opening of about 1500 stores in the two years from 22 to 23. Based on the current 4700 + stores to be opened and 2500 newly signed stores in the 22-year plan, the company will probably achieve the goal of 14000 stores to be opened in 23 years.
Profit forecast and investment suggestions. During the epidemic period, the wine management group expanded against the trend and concentrated its share to the head, which helps to standardize the supply of the industry; The company’s product structure is upgraded to medium and high-end to improve the profitability of single stores. In the post epidemic period, the hotel industry is expected to open an upward revenue cycle driven by house prices under the new pattern. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be RMB 790 million, RMB 1.59 billion and RMB 2.45 billion, corresponding to 65, 33 and 21 times of PE Shanghai Jin Jiang International Hotels Co.Ltd(600754) as the largest liquor management group in China, its own resource endowment is superior. With the gradual deepening of integration, it is expected to see the scale advantage shift to profit advantage after improving quality and efficiency in the future. Based on the assumption that RevPAR of the company returned to 98% in the same period of 19 years in 23 years, it was given 44 times the target PE, the corresponding target price was 65.12 yuan, and the rating was raised to “buy”.
Risk tip: China’s epidemic situation is repeated, the recovery of travel demand is blocked, the macro-economy is down, and the cost of hotels is rising
