\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 007 Jinling Hotel Corporation Ltd(601007) )
Company profile: National Star Hotel Brand benchmark, focusing on the main business of the hotel to achieve diversified business layout. At the beginning of its establishment, the company started the hotel operation business with China's Old Star Hotel Nanjing Jinling Hotel Corporation Ltd(601007) as the core asset, and then gradually carried out management output, and explored the extension of the industrial chain and even the expansion of business forms around the main business of the hotel. At present, the company has four Direct stores (three self-owned properties) and 195 stores under the hotel management business, ranking the fourth in China's chain luxury brands. After 2017, the company also launched five sub brands such as Jinling Jialong and Jinling Wenjing, opening the pace of multi brand expansion. In addition, the company also set up subsidiaries to arrange the procurement and trade of hotel materials, the distribution of famous wine / beverage / sugar and other commodities, extend the hotel industry chain, and cut into the fields of tourism resource development / real estate development & Sales / property management / food manufacturing to realize business diversification and coordinated development.
Hotel Industry: under the epidemic situation, the reshuffle of hotel asset side gave birth to the demand of Gaoxing's reshuffle, the industry continued to upgrade and the brand value was highlighted. Under the covid-19 epidemic, a large number of high star hotels are under pressure and in cash flow difficulties. At the same time, the real estate developers who are the main owners of high star hotel assets are also under deep pressure, resulting in the rapid reshuffle of high star hotel assets in the past two years: China's high star hotel brand management fee + low operating cost, superimposed with the trend of national / national brands + a large number of state-owned platforms become hotel owners, jointly driving a large number of national high star hotels to usher in the opportunity of turnover, Enter the growth dividend period. In addition, in the context of consumption upgrading, the ability of hotel brands to win consumer recognition and obtain premium based on products, services and tonality has become a key element of their competition, and the brand value of classic National Hotels is expected to highlight.
Competitive advantage: profound brand heritage, abundant shareholder resources, diversified layout and industrial synergy Jinling Hotel Corporation Ltd(601007) is one of the first batch of five-star hotels in China. At the beginning of opening, it won the title of "the tallest building in China" with a 37 storey and 110 meter structure; Over the years, it has successfully received political dignitaries at home and abroad for many times. As the host of important activities, it has won the reputation of consumers at home and abroad with its service quality. It is regarded as the benchmark of China's five-star hotel and has established a good brand mind. At the same time, the company relies on the state owned assets supervision and Administration Commission of Jiangsu Province and has abundant resources, which fully supports the company to obtain high-quality projects in the province and even across the country, and even obtain potential asset injection, so as to accelerate the expansion with capital. The company's diversified business layout also has strong synergy, building the business barrier of Gaoxing hotel.
Endogenous extension expansion + cyclical boom recovery + prefabricated vegetable business to build a growth path together. As of 21h1, the company has 195 stores under its management, and the target is to reach 300 / 500 by the end of 22 / 25. It is expected to continue to make efforts to expand its stores internally and externally and expand its territory in an all-round way; In the context of the supply clearing of the hotel industry, if the follow-up epidemic situation is controlled and the demand recovers, the company is expected to usher in a high boom development period of "volume + price". In addition, relying on the accumulation and brand effect in the catering field, the company cuts into the prefabricated vegetable track and has obvious advantages in characteristic dishes. At present, it is in the stage of channel development, which is expected to achieve high growth and thicken the company's performance.
Investment suggestion: the industry reshuffle and consumption upgrading brought by the epidemic will usher in new development opportunities for the leader of Gaoxing hotel. The layout of the company's Direct stores is expected to be promoted, with the maturity and rapid expansion of the entrusted management business and the strength of prefabricated vegetables. The company will be in a period of rapid growth in the next 3-5 years. Regardless of the expectation of the company's extension M & A, we expect the company to realize the net profit attributable to the parent company of RMB 56 / 0.84/155 million from 2021 to 2023, and the corresponding PE is 59x / 40x / 21x respectively. It is covered for the first time and given a "recommended" rating.
Risk tips: repeated epidemic risks, less than expected expansion of stores, less than expected growth of commodity trade, etc
