\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 754 Shanghai Jin Jiang International Hotels Co.Ltd(600754) )
The company released the annual report of 2021: 1) in 2021: the annual revenue was 11.339 billion yuan / + 14.56% (down 25% from 2019), and the net profit attributable to the parent company was 101 million yuan / – 8.7%; The non recurring profit and loss was 223 million yuan, a significant decrease from 780 million yuan in 2020, mainly due to the large amount of investment income from equity transfer of subsidiaries in 2020, deducting the non parent net profit of – 122 million yuan, a decrease of 550 million yuan from 2020; 2) 2021q4: the revenue is 2.99 billion yuan / + 3.26%, the net profit attributable to the parent company is 04 million yuan / + 102.02%, and the net profit not attributable to the parent company is – 77 million yuan / + 70.79%.
The number of new stores has exceeded the task, and RevPAR at home and abroad is still in the recovery channel. 1) Number of new stores & pipeline Hotels: 1763 new stores were opened throughout the year, higher than the 1500 target set at the beginning of 2021, with a net number of 1207 stores (including 1095 medium and high-end hotels and 112 economical hotels). By the end of 2021q4, the number of pipeline hotels had decreased by 389 to 4760 compared with the end of Q3; 2) Domestic hotel business: the revenue is 8.8 billion yuan / + 12.66% (accounting for 79.35%), the net profit attributable to the parent is 440 million yuan / – 48.97%, and the net profit not attributable to the parent is 360 million yuan, turning the loss into profit compared with 2020. Affected by the policy of “Celebrating the new year on the spot” at the beginning of 2021, the epidemic situation in many places in China in the summer and even in the second half of the year, the RevPAR of the whole year recovered to 87.45% in the same period of 2019, including 78.10% for economy hotels and 82.46% for mid-range hotels; 3) Overseas hotel business: the revenue is 2.29 billion yuan / + 24.63% (accounting for 20.65%), and the net profit attributable to the parent company is – 58.11 million euros (RMB – 410 million yuan), which is 47.4 million euros (RMB 330 million yuan) lower than that in 2020. This is mainly because since the end of June, many major overseas countries have gradually relaxed to remove strict epidemic prevention and control measures, and the market has warmed up. The overall average RevPAR of overseas hotels in the whole year has recovered to 66.96% in the same period in 2019, including 66.84% for mid-range hotels and 67.27% for economy hotels; 4) Food and catering business: the revenue was 240 million yuan / + 0.03%, and the net profit attributable to the parent company was 200 million yuan / – 20.96%, mainly due to the decrease in the income from changes in fair value of Hangzhou, Suzhou and Wuxi KFC in the current period.
The management expenses are well controlled, and the construction of “one center and three platforms” is advancing steadily, which is expected to further promote the downward trend of expenses. 1) The gross profit margin is 34.24% / + 8.49pct, the net profit margin is 2.64% / + 0.22pct, and the sales expense rate is 7.8% / + 1.0pct, which is mainly due to the increase of commission and advertising expenses; The management expense rate is 20.5% / – 2.7pct, and the expense is well controlled; The R & D expense rate is 0.2% / – 0.1pct, and the financial expense rate is 4.8% / + 1.1pct, which is mainly due to the completion of fixed increase and the implementation of new lease standards. 2) In terms of staffing, it can be seen that the number of employees in the parent company and major subsidiaries decreased significantly in 2021, mainly due to the significant reduction in the number of financial personnel and administrative personnel (376 and 1750 respectively). We think it is mainly due to the construction of “one center and three platforms” to help the company effectively streamline personnel.
Guidelines for 2022: according to the company’s announcement, 1) Revenue: it is expected to achieve revenue of 13.6 ~ 14.2 billion (YoY + 20% ~ 25%) in 2022, including domestic revenue of 9.8 ~ 10.3 billion yuan (YoY + 9% ~ 14%) and overseas revenue of 3.8 ~ 3.9 billion yuan (YoY + 65% ~ 70%); 2) Store opening: it is planned to open 1500 new stores and sign 2500 new contracts throughout the year.
Investment suggestion: buy – a investment rating. Considering that China’s hotel operation is still under pressure due to repeated epidemics, we are cautiously optimistic about the improvement of China’s follow-up epidemic and the repair of travel demand. At the same time, the relaxation of epidemic prevention and control in overseas countries is expected to continue, and the company’s overseas business is expected to accelerate the repair. We expect that the revenue growth rate of the company from 2022 to 2023 will be 21.0% and 25.6% respectively, and the net profit will be 800 million and 1.9 billion yuan, with the corresponding growth rate of 694.5% and 137.4% respectively. Give 35 times PE in 2023, corresponding to the target price of 62.15 yuan.
Risk tips: the progress of opening stores is less than expected, and the impact of covid-19 epidemic is more than expected.
