\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 754 Shanghai Jin Jiang International Hotels Co.Ltd(600754) )
Core view: affected by the epidemic situation in Shenzhen and Shanghai, the company’s q1rvpar will continue to be under pressure in 2022. Pipeline has returned to the growth track with strong store opening potential. At the same time, the cost has decreased significantly during the period, and the effect of management reform has gradually appeared. After the epidemic, it will fully benefit from the recovery of the industry.
Adjust the profit forecast and maintain the “overweight” rating. As the epidemic situation in Shanghai has continued to exceed expectations since March, and the epidemic situation in many parts of the country has an upward trend, which has an impact on the company’s performance, we adjusted the profit forecast. It is estimated that the company’s net profit attributable to the parent company in 20222024 will be 5.0/18.5/2.81 billion respectively (previously predicted to be 1.14/1.97 billion in 22-23 years), and the adjusted performance growth rate will be 394.7% / 51.7%. The short-term epidemic disturbance will not affect the company’s cost reduction and efficiency improvement and store expansion logic, and maintain the “overweight” rating.
Q1 performance is still affected by the epidemic.. 1) In 2022, the Q1 revenue was 2.322 billion, with a year-on-year increase of 0.97%, the net profit attributable to the parent was – 120 million (we predict – 50 million), the year-on-year loss was 63 million, the net profit deducted from non attributable to the parent was – 218 million, and the loss range expanded slightly (the net profit deducted from non attributable to the parent in 2021q1 was – 161 million). 2) In the first quarter, the revenue of domestic hotel segment was 1.691 billion, with a year-on-year decrease of 8.23 PCT, of which the net profit attributable to the parent company of its subsidiaries Botao group and Vienna Hotel Co., Ltd. were – 10 million (18 million in 2021q1) and 71 million (87 million in 2021q1), both of which decreased slightly. The revenue of overseas hotel segment was 85 million euros, with a year-on-year increase of 61.22 PCT, but the net profit attributable to the parent of the overseas subsidiary Louvre group was – 24 million euros, with a year-on-year loss of only 04 million euros, which is estimated to be due to the reduction of French government subsidies.
The epidemic situation suppresses RevPAR, the structure is upgraded, and ADR is improved. In the first quarter of 2022, the epidemic broke out in Shenzhen and Shanghai and spread to the surrounding cities. Unlike the previous epidemic, this round of epidemic was concentrated in the first tier cities in East and South China, which is the Shanghai Jin Jiang International Hotels Co.Ltd(600754) key layout area, which directly led to the recovery of the overall RevPAR in Q1 to only 72.6% in 2019, the worst level in nearly five quarters. However, from the perspective of ADR, with the increase of the proportion of medium and high-end hotels, the overall ADR in Jinjiang reached 205.5 yuan in Q1 in 2022, which has recovered and exceeded Q1 in 2019 (203.9 yuan). It is expected that with the continuous upgrading of store structure, the overall ADR in Jinjiang will continue to rise.
The medium and long-term core logic of opening stores and reducing fees is still solid. On the one hand, since the company promoted the reform of “one center and three platforms”, the period cost has been significantly reduced. During 2022q1, the company’s expenses decreased by 27.48% year-on-year and 19.30% month on month. On the other hand, although the epidemic led to a decline in the company’s net number of stores in 2022q1, pipeline increased month on month, showing the company’s strong store opening potential. In 2022q1, the company has 144 net hotels, with a year-on-year decrease of 13, and pipeline has reached 4870, with a month on month increase of 110, returning to the rising channel. We believe that the company has sufficient store opening potential, the effectiveness of management reform is gradually released, and the medium and long-term logic that is expected to improve efficiency is still stable. Affected by the epidemic, the supply side of the hotel will be cleared faster, and the competition pattern of the industry will continue to be optimized. As a leader in the hotel industry, Jinjiang will fully benefit.
Risk warning event: the recovery rhythm of the epidemic situation is less than expected; Store expansion is slower than expected; Service quality and brand risk; Hotel group competition intensifies risk.
