\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 258 Btg Hotels (Group) Co.Ltd(600258) )
Event: the company released its annual performance in 2021. The company achieved an annual operating revenue of 6.15 billion yuan / + 16.49%, basically in line with expectations, mainly due to store expansion and business recovery; The net profit attributable to the parent company was 56 million yuan, turning losses into profits.
Tuodian continues to speed up, promote light management sinking + medium and high-end upgrading, and grasp the integration opportunity 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 Btg Hotels (Group) Co.Ltd(600258) timely put forward the plan to accelerate the expansion of stores. On the one hand, considering the lower chain rate of the hotel market in China’s low-level cities and the general pressure on the cash flow of property owners under the impact of the epidemic, the company launched the cloud Hotel light management model of “small investment, light management and high empowerment”, moderately lowered the franchise threshold, met the requirements of owners with different management needs, property conditions and capital volume, and grasped the sinking market opportunity. On the other hand, in the context of the structural gap in China’s medium and high-end hotel market, we will vigorously develop the medium and high-end product cluster with Yifan / Puyin / Heyi as the core. In 2021, 12 / 20 / 169 stores and 31 / 35 / 26 reserve stores of the three brands will be opened, and the brand structure will continue to upgrade. By the end of 2021, the company had opened 5916 stores / + 20.9%, 1791 reserve stores, and a net increase of 1021 stores throughout the year. The speed of expanding stores reached a record high, including – 40 / + 1061 direct sales / franchises respectively, and the asset light mode continued to be promoted. Economy / medium and high-end / light management brands / others increased by – 136 / + 219 / + 886 / + 52 respectively, and the expansion ability of medium and high-end and light management cloud hotels has been continuously verified. In the future, the company also proposes an accelerated expansion plan to open 18002000 new stores in 2022, which will provide strong support for 1791 reserve stores and a broad medium and high-end market and sinking area.
Repeated epidemics put pressure on the business recovery rate, and pay attention to the marginal relaxation of travel control. In 2021, the company’s overall RevPAR (revenue per saleable room) was 119 yuan / + 20.2%, including 104 / 158 / 76 yuan for economical / medium and high-end / light management hotels, 23.4% / 16.8% / 1.2% year-on-year respectively. The overall RevPAR recovered to 74.8% in the same period in 2019, slightly lower than that of Jinjiang (87.45%) and Huazhu (87%), or the absolute value of RevPAR in light management stores was lower and the proportion increased. However, from the perspective of the same store, the RevPAR recovery rates of economical / medium and high-end / light management hotels are – 25.5% / – 28.6% / – 20.3% respectively compared with 2019. The overall recovery level of light management hotels is high, which verifies that the enabling effect of light management mode at the business level is considerable. 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, and 22q1 RevPAR is expected to remain 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.
Strengthen the construction of membership system and digitization, reduce costs, increase efficiency and release profit space. The number of members of the company has increased steadily. By the end of 2021, the total number of members of the company had reached 133 million / + 6.4%. The interests of members were enriched and upgraded, and the proportion of night between central channels continued to increase. At the same time, we actively promoted the digital construction, significantly increased the number of smart hotels, combined with refined management and process optimization. In 2021, the person room ratio of home economy / home business travel decreased to 12.5/13.7 respectively, with a year-on-year decrease of – 3.1 / – 4.2. The decrease of person room ratio further released the profit space. In 2021, the proportion of employee compensation in the revenue of the company’s main business cost decreased to 20.9% / – 0.8pct.
The company’s profit forecast and investment rating: the hotel industry continues to recover after the epidemic. The company grasps the industry clearing and sinking market opportunities, firmly promotes the four core strategies of “development first, product king, member oriented and efficiency empowerment”, speeds up the opening of stores against the market, and the goal of “ten thousand stores in three years” is expected. We expect that the revenue from 2022 to 2024 will be 6.71/86.1/9.61 billion yuan, the net profit attributable to the parent company will be 3.3/9.6/1.38 billion yuan, the EPS will be 0.29/0.85/1.23 yuan, and the corresponding PE of the current stock price will be 77.9/26.8/18.6 times respectively, maintaining the “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.
