\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 258 Btg Hotels (Group) Co.Ltd(600258) )
Event: the company released its 2021 annual report. In 2021, the company achieved a revenue of 6.153 billion yuan / + 16.5% YoY, a net profit attributable to the parent company of 56 million yuan / year-on-year turnaround, and a net profit not attributable to the parent company of 11 million yuan / year-on-year turnaround; 21q4 achieved a revenue of 1.427 billion yuan / – 16.3% YoY, a net profit attributable to the parent company of – 69 million yuan and a net profit not attributable to the parent company of – 83 million yuan.
Under the fluctuation recovery, the annual performance turned around, but it is still under pressure in the short term. Affected by the epidemic, the recovery of China’s hotel industry showed a trend of high before and low after. The overall RevPAR of the company in 2021 was 119 yuan / + 20.2% YoY, recovering to 74.8% in 19 years. The hotel operating revenue was 4.359 billion yuan / + 12.7% YoY, and the growth rate was lower than that of RevPAR, mainly due to the decrease in the number of Direct stores; The hotel management revenue was 1.473 billion yuan / + 26.9% YoY, mainly due to the recovery of RevPAR and the rapid expansion of franchise stores, and the proportion of franchise revenue increased 2pct to 23.9%; The business income of the scenic spot is 321 million yuan / + 26.9%. In the whole year, the net profit of the hotel business segment was – 40 million yuan, with a significant year-on-year decrease of 462 million yuan, and the net profit of the scenic spot segment was 89 million yuan / + 52.8% yoy. Under the operating lever dominated by fixed expenses, the performance was more affected by the repeated epidemic situation, while the performance of single Q4 was under pressure, mainly due to the continuous epidemic situation in many places after late October and the tightening of epidemic prevention policies in North China, under this influence, the overall RevPAR of 21q4 company was 108 yuan / – 17.4% yoy, It only recovered to 71.3% in the same period of 19 years.
Reduce costs and increase efficiency against the wind, and control costs well. Since the epidemic, the company has continued to strictly control costs and improve operation efficiency. The annual operating cost is 4.544 billion yuan / – 1.5% YoY, the sales cost is 323 million yuan / + 4.0% YoY, and the management cost is 705 million yuan / + 5.5% YoY, which are significantly lower than the growth rate of revenue; At the same time, the recovery of income brought dilution of fixed expenses. The annual gross profit margin increased by 13.5pct to 26.2% year-on-year, and the sales expense rate and management expense rate decreased by 0.6/1.2pct to 5.2% / 11.5% year-on-year respectively; The financial expense ratio increased by 6.8pct to 8.5%, mainly due to changes in accounting policies, and part of the lease fees were included in the interest expense of lease liabilities.
The rapid development of light management mode has helped achieve the goal of opening stores throughout the year, and will continue to accelerate the expansion in 22 years. 1418 new stores were opened throughout the year, including 585 new stores in Q4, a record high (including 44 / 91 / 442 / 8 for economy / medium and high-end / light management / others respectively); By the end of the 21st century, 5916 hotels had been opened, and 461 new hotels had been added in Q4 (including 433 light management hotels). The light management mode accelerated to sink, in which the cloud brand and Huayi opened 550 / 404 stores respectively throughout the year, accounting for 38.8% / 28.5% of the total number of new stores. They will still be the main force in the future. There are 18002000 new stores in 2022 (vs 14001600 in 21), and the pace of opening stores is expected to continue to accelerate. By the end of 21, there are 1791 reserve stores, laying a solid foundation for the goal of opening new stores in 22 years.
Under the epidemic situation, 22q1 industry will still be under pressure and support franchisees to tide over the difficulties. Affected by the epidemic, the overall RevPAR of 21q4 company was 108 yuan / – 17.4%, which recovered to 71.3% in the same period of 19 years; ADR 186 yuan / – 0.4% YoY, recovering to 95.5% in the same period of 19 years; OCC 57.9% / -11.9pct yoy, recovering to 80.4% in the same period of 19 years; Stores opened for more than 18 months 21q4revpar 110 yuan / – 19.5% YoY, recovering to 71.3% in the same period of 19 years. Since March, the severity of the epidemic has been the most serious since March. According to STR, the Chinese mainland hotel is only 50% of the 19 weeks’ RevPAR in the first three weeks of March. The company also launched a number of support policies in the late March to reduce the franchise fee, delay payment and financial support for the stores in the high-risk areas.
Profit forecast and investment suggestions
Due to the great impact of the 22q1 epidemic and the uncertainty of subsequent recovery, we predict that the company’s EPS in 202224 will be 0.43/1.06/1.42 yuan respectively (0.80/1.28 yuan respectively in the 22-23 years before adjustment). Due to the large fluctuation of the performance of industry companies affected by the epidemic in 22 years, we use 28 times PE of comparable companies in 23 years for valuation, corresponding to the target price of 29.74 yuan, and maintain the “buy” rating.
Risk tips
The epidemic spread beyond expectations; The progress of opening new stores is less than expected; The macroeconomic downturn affects the investment confidence of franchisees
