\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 754 Shanghai Jin Jiang International Hotels Co.Ltd(600754) )
The hotel industry has experienced a long-term trend of asset light & medium and high-end & chain. China's hotel industry has experienced four stages of development and its leading position is stable. In the medium and long term, the asset resistance cycle attribute is light; Under the pressure of cost side and demand side upgrading, there is room for medium and high-end development to benchmark the United States; Chain hotels have become the development trend and sinking market, and the integration space of chain hotels is broad. In the short term, the epidemic has caused the supply of the industry to be cleared and the demand to recover under the disturbance of the epidemic. It is expected that the industry will enter a new round of prosperity cycle after the disturbance of the epidemic converges.
M & A and active integration. The company is a multi brand hotel chain leader. At present, it has 39 brands, forming a perfect brand matrix covering from economy to high-end. According to the latest ranking of hotels group in 2020, Shanghai Jin Jiang International Hotels Co.Ltd(600754) is the world's second largest hotel giant in terms of the number of rooms. By the end of 2021, the company has opened 10613 hotels worldwide, with 15373 contracted hotels, covering 335 cities in China and 61 countries or regions abroad. The company has developed in three stages. From 2015 to 2016, the company acquired Lufu, Pt Tao and Vienna for large-scale transformation and integration. Jinjiang China was established in 2020. With the goal of "building a world-class hotel group", the company has entered a new stage of development through in-depth integration, quality improvement and efficiency.
Build a brand & Light assets & heavy operation, and start from the leading hotel. Based on the advantages of scale, the company actively integrates. After the establishment of China, the company focused on "building brand, neglecting assets and emphasizing operation". 1) Brand building: sort out the brand matrix and divide the brand into track brand and track brand development. Brand expansion based on the core area, continuous iterative upgrading in 7 days in economy hotels, supplemented by white magnolia and other brands; Take 7 days as the core to sink. Highlight the advantages of medium and high-end: Vienna and Lifeng are strong brands, which carry out encryption and force in key areas. At the same time, the existing products are constantly iterative and upgraded, and the incubation of new brands forms a supplement to the main brands for the subdivided population. 2) Asset light: the company reshapes the development team and stimulates the vitality of the team; Pay attention to the interests of franchisees and provide all-round support such as financial trading platform to help light asset expansion. 3) Focus on operation: strengthen operation and provide support for brand expansion and expansion. One center, three platforms, enabling front-end, continuous improvement of membership system, digital promotion, cost reduction and efficiency increase.
The expansion of stores is strong, the reform is deepened, and the space is broad. At present, the company has: 1) strong expansion of stores, 1763 new hotels and 1207 net hotels were opened in 2021, and the exhibition of stores has been steadily promoted against the trend; In the future, the medium and high-end will develop strongly, sink and expand the market actively, focus on East China, consolidate the advantages of South China, and expand the scale continuously; 2) Efficiency integration, strengthening the front end of the midline and optimizing the expense rate under the background efficiency improvement. The management expense rate in 2021 is -2.8pct year-on-year compared with that in 2018. In the future, it can be expected to expand the standard China residence, improve quality and efficiency at the same time.
Investment suggestion: with the convergence of the epidemic disturbance, the supply is cleared, the demand of the hotel industry is restored, and the industry is expected to enter a new round of prosperity cycle. As a leader in the hotel industry, the company is actively integrating and changing, seizing opportunities in the short term and actively expanding; In the medium and long term, we will actively layout in line with the trend of asset light, medium and high-end and sinking market in the industry. While expanding the scale, the efficiency continues to be optimized, and the leading position continues to be stable. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 9.2/17.9/2.45 billion yuan, EPS will be 0.86/1.67/2.29 yuan, the target price of the company will be 62 yuan, corresponding to pe27x in 2024, and the "buy" rating will be given for the first time.
Risk tips: 1) overall weak consumer demand or small-scale outbreak of the epidemic again; 2) Intensified market competition; 3) The expansion was less than expected.
