\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 754 Shanghai Jin Jiang International Hotels Co.Ltd(600754) )
Event: the company released its annual report for 2021, which realized a revenue of 11.339 billion yuan / 14.56%, a net profit attributable to the parent company of 100 million yuan / - 8.7%, a loss of 122 million yuan deducted from non net profit, and a loss of 670 million yuan in the same period of last year. The income side is in line with expectations. Although the profit side is still affected by the epidemic, it has greatly reduced its losses. In 2021, the company achieved a revenue of 11.339 billion yuan / 14.56%, which is basically in line with the expectation, of which the domestic / overseas revenue is 8.80 billion yuan / 2.29 billion yuan respectively, with a year-on-year increase of 12.7% / 20.7% respectively, and restored to 81.9% and 55.9% in the same period in 2019. The domestic is due to the orderly promotion of store expansion and business recovery, and the overseas is showing higher growth elasticity due to the low base of the epidemic in 2020. The annual net profit attributable to the parent company was 100 million yuan / - 8.7%, a year-on-year decrease, mainly due to the large investment income obtained from the sale of the equity of subsidiaries in the same period of last year. The deduction of non net profit was 122 million yuan, compared with 670 million yuan in the same period of last year. Although the deduction of non net profit for the whole year was still a loss due to the impact of the epidemic on income and the rigidity of rent, manpower and other costs, it has achieved a significant reduction compared with 2020.
The superposition structure of high-speed store expansion is optimized, and the market share of the company is expected to be further improved in the post epidemic era. The epidemic has accelerated the clearing of the supply side of the hotel market, the willingness of individual owners to join has increased, and the industry has released huge integration opportunities. As the leader of chain hotels, Jinjiang has put forward the plan of accelerating the expansion of stores, which is expected to grasp the industry concentration and improve the dividend, so as to further improve the market share. In 2021, the company opened 1763 new stores, exceeding the annual target of 1500 new stores, with a net of 1207 stores. By the end of 2021, the number of stores had reached 10613, ranking first in China. In terms of product structure, the proportion of franchise stores increased to 91.3% / + 1 / 3PCT, and the asset light mode was promoted in an orderly manner; The proportion of mid tier stores increased to 52% / + 5pct, and the brand structure continued to upgrade. In 2022, the company plans to open 1500 new stores and sign 2500 new contracts, which is the same as the goal of 2021. By the end of 2021, 4760 stores have been signed to be opened, providing strong support for the continuous expansion of stores in the post epidemic era.
Domestic businesses are under repeated pressure due to the epidemic, and pay attention to the marginal relaxation of travel control; Overseas low base is expected to rebound rapidly. On the domestic side, in 2021, the company's overall domestic RevPAR (revenue per saleable room) was 119.24 yuan / room, which recovered to 87.45% in 2019. The economic / middle-end recovery rates were 82.46% / 78.10% respectively. The proportion of the middle-end increased, raising the overall RevPAR recovery rate. The upgrading of brand structure had a significant effect on RevPAR. As a travel related industry, the overall operation of hotels is still affected by the epidemic. Since March 2022, Omicron cases have occurred in many places in China. It is expected that RevPAR in 22q1 will still be under pressure. However, with the extension of the duration of the epidemic and the accuracy and normalization of prevention and control measures, the marginal impact of the epidemic on Residents' travel is gradually weakened. If China's epidemic prevention measures are moderately relaxed in the future, the company is expected to benefit. Overseas, since 21q2, major European countries have increased vaccination efforts, and the epidemic has been controlled to a certain extent. Since the end of June, many countries have gradually relaxed the epidemic prevention and control measures, the overseas travel market has further warmed up, and the RevPAR of the company's overseas hotels has also continued to rise. The overseas RevPAR of 21q1-q4 company recovered to 54.1% / 49.3% / 79.8% / 81.6% respectively in the same period in 2019. The chain improvement trend is significant, and it is optimistic that it will rebound further under the low base overseas in the future. Based on the future store expansion plan and the recovery process of domestic and foreign operations, it is expected that the company will realize an operating revenue of 13.6-14.2 billion yuan / + 20% - 25% in 2022, of which the domestic / overseas growth rate is 9% - 14% / 65% - 70% respectively year-on-year.
Internal optimization and integration to achieve cost reduction and efficiency, optimistic about the continuous release of profit space. In 2021, the company will promote optimization and integration in terms of brand, platform and personnel, so as to reduce cost and increase efficiency. Sort out brand positioning, evaluate brand value, streamline brand structure, and divide "track brand" and "track brand". The former realizes the resource focus of main brands, while the latter seeks the incubation and development of innovative brands, and the brand matrix has been further upgraded and optimized. Continue to optimize the financial sharing platform, promote the digital transformation of China, and improve the membership system. By the end of 2021, the number of effective members reached 180 million, and the direct selling reservation rate of members continued to increase. In 2021, the number of employees of the company will be optimized from 1910 to 33162, and the number of administrative personnel will be optimized from 1750 to 7299; The number of financial personnel has been optimized from 376 to 326, and the personnel have been streamlined on a large scale. Under multi-party integration, cost reduction and efficiency increase have achieved initial results. In 2021, the company's gross profit margin increased to 34.23% / + 8.5pct, and the management expense rate decreased to 20.47% / - 2.7pct. In the future, with the continuous integration of the company's "one center and three platforms", the profit space is expected to be further opened.
Profit forecast and investment rating of the company: the leading position of the company's hotels is stable. The scale of stores, the speed of expanding stores, the proportion of franchisees and the proportion of medium and high-end hotels are at the leading level in the industry, and the cost reduction and efficiency increase are realized through the integration of "one center and three platforms". As the epidemic situation accelerates and the supply side of the industry is cleared, the company proposes to accelerate the store expansion plan and is optimistic about the accelerated increase of the proportion of epidemic leading cities. We expect the company to realize operating revenue of RMB 13.89 billion, RMB 16.77 billion and RMB 18.79 billion respectively from 2022 to 2024, net profit attributable to the parent company of RMB 940 million, RMB 1.84 billion and RMB 2.49 billion, and EPS of RMB 0.88, RMB 1.72 and RMB 2.33 respectively. The PE corresponding to the current share price is 57.3, 29.2 and 21.2 respectively Six times. Maintain a "recommended" rating.
Risk tip: the epidemic situation is developing faster than expected, the expansion speed of new stores is slower than expected, and the franchise management risk.
