\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 754 Shanghai Jin Jiang International Hotels Co.Ltd(600754) )
Core view
The industry has improved both supply and demand in the short term and both volume and price in the long term. In the short term, the tail of the hotel industry will be cleared. In 2020, the number of hotels will decrease by 17% year-on-year, and the demand side will be gradually repaired. The logic of long-term chain hotel volume and price rise is clear. The chain rate of China’s hotel industry is only 31%, which is still much room for improvement compared with 70% in the United States; The upgrading of consumption and the increase of travel expenses drive the development of medium and high-end hotels. The compound growth rate of the number of medium and high-end hotels from 2015 to 2019 reached 27%.
The company has strong ability to expand stores and high quality. The company is the leading hotel in China. By the end of 2020, 9406 hotels have been opened, accounting for 20% of the market. There are many strong brands in terms of economy and medium and high-end. Hotel products have strong profitability and are constantly updated and iterated. At present, the investment payback period of main products is about 3 years, which enables the company to better persuade investors to join. The “quality” and “quantity” of the company’s stores lead the industry. In 2021, the company opened 1207 stores, accounting for 91% of medium and high-end stores. We expect that the company will achieve the goal of opening 1500 new hotels in 2022, and maintain a rapid expansion speed in the future. In the process of chain and medium and high-end of the hotel industry, the company will fully enjoy the growth attribute brought by the rapid expansion of stores and price increase.
Promote the integration of China, and “one center and three platforms” enable hotel operation. Shanghai Jin Jiang International Hotels Co.Ltd(600754) China was established in May 2020 to comprehensively integrate and restructure the company structure, break the barriers between subsidiaries, eliminate redundant personnel and improve management efficiency. In 2021, the total number of employees decreased by 19% compared with that in 19 years, and the management expense rate of the hotel division decreased by 0.2pct year-on-year. At the same time, the company integrates the middle and back office resources into a “one center and three platforms” system to enable the whole process of hotel operation.
Profit forecast and investment suggestions: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 7.2/19.3/2.51 billion, corresponding to eps0.1 billion 67 / 1.81/2.35 yuan, corresponding to dynamic pe78 4 / 29.1 / 22.4x. Considering that Shanghai Jin Jiang International Hotels Co.Ltd(600754) Tuodian leads the industry in both “quality” and “quantity”, has stronger growth, steadily advances integration, improves management efficiency and maintains the “buy” rating.
Risk warning: repeated epidemic risk; Macroeconomic growth slowed down; The number and structure of extension stores are lower than expected; The integration fee reduction in China was lower than expected.
