\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 258 Btg Hotels (Group) Co.Ltd(600258) )
Key investment points
The annual revenue was stable, and the repeated Q4 epidemic put pressure on the performance. In 2021, the company’s revenue was 6.15 billion yuan (YoY + 16.5%), and the net profit attributable to the parent company was 55.68 million yuan (the same period in 2020 – 496 million yuan), which was in the median value of the previous performance forecast. Due to the repeated epidemic in many places across the country in Q4 in 2021 and the sharp decline in the demand for cultural and tourism travel, the company’s business was greatly impacted. The single quarter revenue of Q4 in 2021 was 1.43 billion yuan (yoy-16.3%), and the net profit attributable to the parent company was – 69.41 million yuan. Business by business: the total profit in 2021 is 6.04 million yuan, of which the total profit of hotel business is – 100 million yuan and the total profit of scenic spot operation business is 106 million yuan (YoY + 51.1%); In 2021q4, the total profit of the hotel in a single quarter was – 159 million yuan, a year-on-year increase of – 452.1%.
RevPAR recovered to 75% in 2019 in 2021, and the overall performance of economy hotels was better. 1) Overall caliber: RevPAR of all hotels of the first trip home in 2021 is 119 yuan (25.2% compared with the same period in 2019). The RevPAR of medium and high-end / economy hotels is 158 / 104 yuan respectively, which has recovered to 68.7% / 76% in 2019. The recovery of economy hotels is good. In 2021q4, the overall average room price (ADR) is 186 yuan (yoy-0.4%), and the overall occupancy rate (OCC) is 57.9% (yoy-11.9pct), down 19.6pct from the same period in 2019. 2) Caliber of mature stores: in 2021q4, there are 3490 mature stores of first trip home (opened for more than 18 months), and the RevPAR is 110 yuan (compared with the same period in 2020 – 19.5%), of which the RevPAR of medium and high-end / economy stores is – 22.2% / – 17.2% respectively year-on-year.
The number of newly opened hotels reached a new high and continued to layout the medium and high-end market. By the end of 2021, the company had 5916 hotels, including 1384 medium and high-end hotels, accounting for 23.4%. In 2021, there were 1418 new stores and 585 new stores in Q4, of which 91 / 44 / 442 were medium and high-end / economical / light management hotels. By the end of 2021, the company has signed 1791 reserve projects that have not been opened or are being signed, laying a solid foundation for the development of new stores in 2022.
The profitability improved and the month on month performance was weak. In 2021, the company’s sales expense ratio was 5.24% (year-on-year – 0.6pct), and the management expense ratio was 11.5% (year-on-year – 1.2pct). The improvement of expense ratio was mainly due to the growth of revenue scale; The financial expense ratio was 8.5% (year-on-year + 6.8%), which was mainly due to the recognition of lease liability financing expenses in accordance with the new lease standards, with a gross profit margin of 26.1%. 2021q4 single quarter: the sales expense rate was 5.3% (Mom – 0.2pct), and the management expense rate was 13.3% (YoY + 2.2 PCT), which was mainly caused by the repeated decline of the epidemic and the decline of business income.
Profit forecast and investment rating: according to STR data, the occupancy rate of China’s economy / mid-range hotels fell by 19.4/16.8pct year-on-year from February 23 to March 19 this year. We believe that the industry is still in a tortuous recovery cycle, and conservatively assume that the recovery of hotel RevPAR will slow down in 2022. We estimate that the net profit attributable to the parent company from 2022 to 2023 will be RMB 430 / 990 million (the previous value is RMB 780 / 1.11 billion), and the net profit attributable to the parent company in 2024 will be RMB 1.18 billion. The compound growth rate of the net profit attributable to the parent company from 2022 to 2024 will be 65.1%. The current stock price corresponds to 59 / 26 / 22 times of the three-year dynamic PE. Downgraded to “overweight”, the company continues to counter the trend. If the epidemic is stable, the performance is expected to show greater flexibility,
Risk warning: the repeated epidemic has caused macroeconomic fluctuations, intensified industry competition, and the risk of hotel operation & expansion is lower than the market expectation
