\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 754 Shanghai Jin Jiang International Hotels Co.Ltd(600754) )
Key investment points
The epidemic has impacted Q1 performance, and overseas income has increased rapidly. In 2022q1, the revenue was 2.32 billion yuan (YoY + 0.97%), the net profit attributable to the parent was – 120 million yuan (including relocation compensation of 89.66 million yuan and government subsidy of 21.01 million yuan), and the net profit not attributable to the parent was – 220 million yuan (the loss increased by 56.68 million yuan year-on-year under the impact of the epidemic). In terms of business, the company’s hotel business revenue was 2.26 billion yuan (+1.29%), of which domestic revenue in Chinese Mainland was 1.69 billion yuan (yoy-8.23%, accounting for 74.73%), and overseas revenue in Chinese Mainland was 570million yuan (yoy+46.12%), mainly due to the rapid recovery of overseas hotel demand. The revenue of food and catering business is 58.56 million yuan (yoy-9.82%).
The decline in revenue caused month on month fluctuations in the cost structure. The overall gross profit margin in 2022q1 was 23.3% (2021q4-14.5pct month on month), mainly due to the decline of revenue. The sales expense rate was 6.8% (2021q4-3pct month on month), the management expense rate was 25.2% (2021q4 + 3.3pct month on month), and the financial expense rate was 4.9% (2021q + 1PCT month on month).
Due to the frequent occurrence of 2022q1 epidemic, the decline of Chinese OCC dragged down the recovery, and the performance of overseas middle-end hotels was better.
1) the average room rate (ADR) of the overall hotels in mainland China increased, and the occupancy rate (OCC) dragged down the recovery: the RevPAR of the mid-range hotels was 123.56 yuan / room (YoY – 15.89%), OCC was -10.82pct year-on-year, and ADR was + 1.4% year-on-year; RevPAR of budget hotels was 69.52 yuan / room (YoY – 3.73%), OCC was -4.65pct year-on-year, and ADR was + 5.7% year-on-year.
2) the overall hotels outside the mainland continued to recover since the end of 2021: the overall RevPAR of the hotel was 25.95 euros / room (YoY + 47.28%), OCC was + 11.44pct year-on-year, and ADR was + 12% year-on-year. Among them, RevPAR of mid-range hotels was + 57.42% year-on-year, better than that of economy hotels.
The proportion of mid-range and franchise stores has increased, and the strategy has been continuously promoted. In 2022q1, 232 new hotels were opened, with a net increase of 144 hotels (including 4 directly operated hotels and 148 franchise hotels). By the end of 2022 Q1, the total number of hotels of the company had reached 10757, including 5659 mid-range hotels (accounting for 52.61%) and 5098 economy hotels. 9840 hotels joined in, accounting for 91.48%, and the medium and high-end / asset light strategy continued to be promoted.
Profit forecast and investment rating: since 2022, repeated outbreaks in many places and subsequent control policies that are easy to tighten but difficult to loosen may put pressure on the profit side. At the same time, the recovery of the company’s overseas business is expected to continue to reduce losses. Based on conservative assumptions, we adjusted the company’s net profit attributable to the parent company in 202224 to RMB 200 / 18.6 / 2.44 billion (the previous value was RMB 830 / 19.5 / 2.35 billion), and the year-on-year growth rate of net profit attributable to the parent company in 202224 was 100% / 820% / 31%. The current stock price corresponds to dynamic PE 285 / 31 / 24 times. If the epidemic situation is good, it is expected to show greater performance flexibility in the industry and maintain the “overweight” rating.
Risk tip: the repeated epidemic situation causes economic fluctuations, market competition intensifies risks, and the expansion of operation & Hotel is less than the company’s expectation.
