\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 073 Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) )
The company issued the 2021 annual report and the first quarterly report of 2022:
① in 2021, the company achieved a revenue of 278 million yuan / yoy + 8.39%, and the net profit attributable to the parent company was 369176 million yuan / yoy + 5.28%, deducting the net profit not attributable to the parent company of 311661 million yuan / yoy + 2.66%; Gross profit margin in 2021 is 12.8% / yoy-0.11pct; Net profit margin attributable to parent company in 2021 is 13.3% / yoy-0.03pct.
② 21q4 company achieved revenue of 655831 million yuan / yoy-25.50%, net profit attributable to parent company of 3.264 million yuan / yoy-80.98%, deducting non attributable net profit of 391100 yuan / yoy-97.64%; 21q4 gross profit margin -4.07% / yoy-1.17pct; 21q4 net profit margin attributable to parent company 4.89% / yoy-0.74pct.
③ in 22q1, the company achieved revenue of 615059 million yuan / yoy-3.72%, net profit attributable to parent company of 3.9247 million yuan / yoy-44.58%, net profit not attributable to parent company of 2.8717 million yuan / yoy-48.32% deducted; The gross profit margin of 22q1 reached 28.85% / + 1.3pct, and the net profit margin attributable to the parent company of 22q1 was 6.38% / yoy-0.42pct. 22q1 company completed the consolidation of Junlan / Jinglan. After integrating Junlan / Jinglan, the management fee of the entrusted management hotel that has not yet opened amounted to 468699 million yuan, which is included in the contract liabilities.
④ the net cash inflow from the company’s operating activities in 2021 was 135 million yuan, an increase of 172.69% over the same period of last year.
⑤ the company plans to distribute a cash dividend of 5.0 yuan (including tax) for every 10 shares to all shareholders and increase 5 shares for every 10 shares to all shareholders with capital reserve.
The store has demonstrated its resilience in the face of the epidemic and provided strong support for the operation performance of the store in the past 21 years.
① in 2021, the annual average RevPAR was 231.15 yuan / yoy + 26% (restored to 80.5% in 19 years), the average house price was 398.33 yuan / yoy + 8% (restored to 86.0% in 19 years), and the occupancy rate was 58.03% / yoy + 16% (compared with – 9.19pct in 19 years).
② quarterly, q1-q4revpar is 198.90/284.13/226.16/217.48 yuan respectively, and the average house price is 381.61/403.37/403.93/403.12 yuan respectively; The occupancy rates were 52.12% / 70.44% / 55.99% / 53.95% respectively. With the improvement of Q2 epidemic situation, the company has shown strong business resilience. With the repeated 21q3 scattered epidemic, the business data is under pressure.
③ 22q1revpar is 209.07 yuan / yoy + 5%, the average house price is 350.2 yuan / yoy-8%, and the occupancy rate is 59.70% / yoy + 15%. The increase in occupancy rate compared with the same period of 21 years is a significant increase in the supply of isolated hotels. Although the average house price has declined, RevPAR is still higher than that in the previous period. RevPAR exceeded the same period of 21 years, while 22q1 revenue decreased by 3.72% year-on-year, mainly due to the decline of the company’s catering and other supporting service revenue affected by the epidemic, and the year-on-year decline in the occupancy rate of the two direct stores that are not isolated hotels, which reduced the overall revenue. At present, the company’s Shanghai Quanyu Hotel, Jiangsu Quanyu Hotel and some hotels in Zhejiang Province are engaged in isolated hotel business, receiving isolated personnel from outside China and provincial aid units, and all its hotels have not stopped production.
Acquire Junlan / Jinglan, break through the bottleneck of scale, and sign 100 contracts based on the direct marketing + entrusted management mode in 22 years. Over the past 21 years, the company has managed and invested in more than 70 stores. After the acquisition of Junlan / Jinglan by 22q1, the scale of management and investment in more than 300 stores has broken through the bottleneck of scale. The company’s Junlan brand signed 13 new high-end hotel projects in the first quarter, and the total number of investment management projects exceeded 200 at the end of the first quarter. In 2022, the company will coordinate the expansion teams of Junting, Junlan and Jinglan, establish a collaborative and shared expansion mechanism, adhere to the development model of the combination of direct operation and entrusted management, and choose the opportunity to start the franchise business. Adhere to the “development strategy of deepening the Yangtze River Delta and focusing on expanding Beijing, Southwest China and the Pearl River Delta”, and plan to sign 100 contracts in 2022.
The brand matrix has been continuously improved to achieve diversified layout. The concept Film & team live appearance + release of Yunlan brand has established a high brand potential. After the merger and acquisition of Junlan / Jinglan, the company has a multi brand matrix spanning the two categories of vacation and business travel in the middle and high-end stages, and has incorporated Junlan vacation, the first brand in China’s vacation field; In the future, the company will gradually unify the group image, clarify the brand matrix, use plug-in combination to develop new fashion combination and further enrich the brand matrix. On April 22, the company released the concept film “worth the trip”, and the management made a simultaneous appearance with a small program to explain the company’s brand concept and development vision. At the same time, it released the brand “Yunlan” created by Guangkai holding with strategic partners to position urban luxury and further enhance the brand potential; The luxury wild luxury brand and the mid-range franchise brand Junting Shangpin are also in the process of preparing for landing.
With all-round efforts to digitize, the platform effect is expected to be released to reduce costs and increase efficiency. The company will establish an information-based comprehensive management platform with “standardized, efficient and intelligent whole process management of hotel business” as the core, including hotel model display center, design center and information center. Establish a data sharing and data analysis system, open up the data underlying system of each business, realize the efficient connection between different business systems of the group, realize the all-round analysis of guest data, and enable the online operation of all links / business statements. Through the three scenarios of marketing automation system, digital channel management and social media channel construction, build an industry-leading digital marketing system, build the group’s new media matrix and private domain traffic pool, accurately reach members and improve brand reputation and user communication through richer content marketing and cross-border marketing. After the completion of the project, the company will realize a unified management platform for hotel design integration, intelligent management integration and brand promotion resource integration. This platform can help the company to effectively control its self operated hotels and entrusted management projects, improve management efficiency, and is expected to significantly reduce the company’s operating costs.
Investment suggestion: Junting is the target of a high-quality hotel focusing on medium and high-end stages and operating efficiently. After the acquisition of Junlan, it has broken through the bottleneck of scale and realized the layout of multiple brands / categories. Junlan has led the scale and growth rate in the track of China’s resort hotels. It has set up spots around many tourist destinations nationwide, and will enter the accelerated opening cycle of its projects in the next two years. It is optimistic that the company’s integration will continue to deepen, expand stores through endogenous and extension, and realize high performance flexibility by taking advantage of the consumption boom of resort hotels and the recovery trend of travel after the epidemic. It is estimated that the net profit attributable to the parent company in 22-24 years will be 0.87/174221 million respectively, and the corresponding PE will be 70 / 35 / 27 times respectively. Considering that the company is in the rapid rise period of store size and brand potential energy, superimposed with the rise of valuation under the cyclical recovery after the epidemic, 45 times of valuation will be given based on the 23-year performance, corresponding to the target price of 97.2 yuan / share, and the “recommended” rating will be maintained.
Risk tips: the epidemic situation repeatedly exceeded expectations, the expansion of stores was less than expected, and the integration was less than expected
