\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 754 Shanghai Jin Jiang International Hotels Co.Ltd(600754) )
Core view: affected by the national sporadic epidemic, the company’s Q4 performance in 2021 was lower than our previous expectations, and the recovery of RevPAR was delayed. The management expense rate of the company continues to decrease, the stores expand steadily, and the core logic remains unchanged.
Adjust the profit forecast and maintain the “overweight” rating. Due to the outbreak of Q1 epidemic in many places in China in 2022, especially the impact of the epidemic in Shanghai on the company’s performance, we adjusted the profit forecast. It is estimated that the company’s net profit attributable to the parent company in 20222024 will be 1.14/19.7/2.95 billion respectively (previously predicted to be 1.41/1.98 billion in 22-23 years), and the adjusted performance growth rate will be 1033.7% / 72.8%. The short-term epidemic disturbance will not affect the company’s management optimization and store expansion logic, and maintain the “overweight” rating.
Q4 performance was lower than our previous expectations. 1) In 2021, Q4’s revenue was 2.990 billion, with a year-on-year increase of 3.26%. The net profit attributable to the parent company was 04 million (we predicted 130 million), which became positive year-on-year (191 million loss in 2020q4). The net profit deducted from non attributable to the parent company was – 77 million, with a year-on-year decrease of 188 million. 2) In 2021, the company achieved a revenue of 11.339 billion yuan, a year-on-year increase of 14.6%, and the net profit attributable to the parent company was 100 million, a year-on-year decrease of 8.7%. The net profit attributable to the parent company after deduction was – 120 million, a year-on-year decrease of 550 million. Among them, the revenue of domestic hotel segment was 8.8 billion, the net profit attributable to the parent was 440 million, the revenue of overseas hotel segment was 300 million euros, and the net profit attributable to the parent was – 60 million euros, a year-on-year decrease of 50 million euros.
The epidemic situation in China has a great impact on short-term performance. In the fourth quarter of 2021, sporadic outbreaks continued in Beijing, Chengdu, Liaoning and other regions, resulting in the overall RevPAR of Jinjiang Q4 only recovering to 86.36% in 2019. Although it was slightly higher than Q3 (recovering 82.30% year-on-year in 2019), there was still a large gap with Q2 (recovering 99.55% year-on-year in 2019). However, from the perspective of ADR, the overall ADR in Jinjiang reached 213.4 yuan in 2021, which has recovered and exceeded 2019 (210.6 yuan). It is expected that with the continuous upgrading of store structure, the overall ADR in Jinjiang will continue to rise.
The repeated short-term epidemic does not affect the core logic of reducing fees and opening stores. With the steady progress of organizational reform, the management expense rate of the company continues to decrease. In 2021, the company’s general administrative personnel decreased by 1750 on a year-on-year basis, and the management expense rate decreased by 2.73 PCT on a year-on-year basis. On the other hand, the epidemic did not slow down the pace of the company’s store opening. In 2021, the company opened 1763 new stores (1500 higher than the company’s guidelines), with a net opening of 1207, all ahead of its competitors (1540 in Huazhu, 1041 in net; 1418 in the first brigade, 1021 in net). We believe that the company has shown a strong ability to open stores in the epidemic, and the continuous streamlining of the organizational structure is expected to improve efficiency. Affected by the epidemic, the supply side of the hotel will be cleared faster, and the competition pattern of the industry will continue to be optimized. As a leader in the hotel industry, Jinjiang will fully benefit.
Risk warning event: the recovery rhythm of the epidemic situation is less than expected; Store expansion is slower than expected; Service quality and brand risk; Hotel group competition intensifies risks.
