\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 073 Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) )
Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) as the leader of medium and high-end selected hotels, accelerate the national layout through the merger and acquisition of Junlan. The company was founded in 2007. Since its establishment, it has deeply cultivated the medium and high-end market and the urban agglomeration of the Yangtze River Delta. Through internal incubation and external mergers and acquisitions, it has formed a multi-level medium and high-end hotel brand matrix and become the leader of medium and high-end hotels. The company’s core senior management team has rich experience in medium and high-end hotels, and the newly hired professional manager Zhu Xiaodong adds strength to the development of the company. In 2021, the company was listed on the gem and raised funds to focus on the development of medium and high-end hotel projects. In January 2022, through the merger and acquisition of Junlan and Jinglan, the company accelerated its expansion to key cities in China.
Medium and high-end upgrading has become the main theme of future competition, and selection and vacation have become a new trend in the industry. 1) Around 2010, China’s economy hotel market was close to saturation. On the one hand, the medium and high-end upgrading caters to the consumption upgrading trend, on the other hand, it can resist the rise of rent and labor costs and improve the return on investment. Therefore, the medium and high-end hotels are the segment track with the fastest growth rate in recent years. From the perspective of income structure, China’s medium and high-end hotels still have about double the growth space. 2) The middle and high-end racetrack provides a wide enough price band for differentiated competition. In addition, the needs of middle and high-end consumers are more diversified and personalized, which promotes the development of hotels into fine selection; The introduction of the “14th five year plan” tourism plan and the return of consumption under the pressure of outbound tourism promote the trend of hotel vacation.
The company’s brand premium is prominent and its management efficiency is excellent. It is expected to usher in a high elastic recovery of performance after the epidemic. 1) The company has been deeply engaged in medium and high-end hotels for more than ten years, with profound development and design technology, perfect and meticulous housing service process, benchmarking product and service quality with five-star hotels, unique brand characteristics in cultural operation, adhering to the “direct marketing + entrusted management” mode and strengthening brand management. Compared with peers and brands with the same cost, the company’s brand premium has appeared; 2) The management efficiency of the company is high, the three fee rate is low in the same industry, and the fee control ability is significantly better than that of comparable companies.
Investment suggestion: the company has cultivated the medium and high-end market and formed the ability to develop and design technical advantages and brand premium. Under the background of medium and high-end upgrading of the industry, the company will rely on the listing platform and accelerate the opening of stores through endogenous extension. Its development is expected to drive into the fast lane. The proportion of medium and high-end Direct stores is high, and it is expected to bring high elastic recovery of performance after the epidemic. We expect that from 2021 to 2023, the company will realize an operating revenue of 296 / 464 / 627 million yuan and a net profit attributable to the parent of 37 / 0.76/117 million yuan, corresponding to 137.8/67.0/43.7xpe. For the first time, give a “overweight” rating.
Risk tip: the epidemic repeatedly affects the pace of industry recovery, the speed of store expansion is lower than expected, the integration effect after M & A is lower than expected, the industry competition is intensified, macroeconomic fluctuations and foreign market experience are not completely comparable. Relevant materials and data are only for reference
