Investment Rating - The investment rating for the company is "Outperform the Market" [7] Core Views - The company is experiencing short-term disruptions due to industry cycles but is focusing on high-quality expansion and internal improvements. The first quarter revenue met expectations, with hotel operating revenue around 22.5 billion RMB, a year-on-year increase of 14.3%, and total revenue of approximately 5.4 billion RMB, a year-on-year increase of 2.2% [1][11] - The company aims for a revenue growth of 1-5% in Q2, with domestic segments expected to grow by 3-7% and franchise revenue by 18-22%. The management anticipates a narrowing decline in RevPAR in Q2, with a goal of at least maintaining or growing throughout the year [4][18] Summary by Sections Domestic Hotels - In Q1, domestic revenue was 4.481 billion RMB, up 5.5% year-on-year. Direct-operated hotels saw a decline of 9.4%, while franchise revenue increased by 21.1%. The overall RevPAR decreased by 3.9%, with same-store RevPAR down by 8.3% [2][16] - The company opened 694 new hotels and closed 155, with a total of 11,564 hotels by the end of Q1. The company plans to open approximately 2,300 new hotels throughout the year [2][16] Overseas Hotels - Q1 overseas revenue was 918 million RMB, down 11.3%. The decline was primarily due to the transition of 10 direct-operated hotels to a light-asset franchise model and the closure of one direct-operated hotel. The adjusted EBITDA for Q1 was -77 million RMB, indicating an increase in losses due to restructuring [3][17] Financial Forecasts - The company maintains adjusted net profit forecasts for 2025-2027 at 4.66 billion, 5.37 billion, and 6.13 billion RMB, respectively, with a three-year CAGR of 18%. The dynamic PE ratios are projected to be 17, 15, and 13 times for the respective years [5][19] - The company has a shareholder return plan of 2 billion USD over three years, which adds marginal appeal to the investment [5][19]

Core Insights - H World Group Limited (HTHT) reported first-quarter 2025 results with earnings and revenues missing the Zacks Consensus Estimate, although both metrics increased year-over-year [1][3] Financial Performance - Adjusted earnings per share (EPS) for Q1 2025 were 34 cents, missing the consensus estimate of 42 cents by 19.1%, compared to 29 cents in the prior-year quarter [3] - Quarterly revenues reached $744 million, falling short of the consensus mark of $754 million by 1.3%, but representing a 1.8% increase from $731 million in the same quarter last year [3] - Selling, General and Administrative expenses were $104 million, significantly higher than $36 million reported in the prior-year quarter [4] - The operating margin improved by 110 basis points year-over-year to 20.1%, driven by higher revenue contributions from manachised and franchised businesses [4] - Adjusted EBITDA was $206 million, reflecting a 4.6% increase from the previous year's figure [4] Balance Sheet - As of March 31, 2025, cash and cash equivalents stood at $1.1 billion, up from $818 million in the prior-year quarter [5] - Long-term debt increased to $609 million from $228 million reported in Q1 2024 [5] Business Operations - H World operated a global network of 11,685 hotels with a total of 1,142,158 rooms as of March 31, 2025, including 11,564 properties under the Legacy-Huazhu brand and 121 under Legacy-DH [6] - In Q1 2025, the Legacy-Huazhu segment added 694 new hotels, with 692 under the manachised and franchised model, while closing 155 properties [6] - The company maintains a robust development pipeline of 2,888 unopened hotels, with 2,865 from Legacy-Huazhu and 23 from Legacy-DH [6] Strategic Outlook - The company expressed a cautious stance regarding persistent tariff challenges and broader macroeconomic uncertainties [2] - H World emphasized its asset-light strategy, focusing on high-quality network expansion, strengthened brand positioning, service excellence, and enhanced sales capabilities through its H Rewards membership program to drive growth [2]

Core Viewpoint - H World Group (华住集团) experienced a significant stock decline of 4.7% following the release of its Q1 2025 unaudited financial results, reflecting market concerns about its performance amidst industry pressures [1][2]. Financial Performance - In Q1 2025, H World Group reported hotel revenue of 22.5 billion RMB, a year-on-year increase of 14.3% [1]. - The company's total revenue for the quarter was 5.395 billion RMB, showing a year-on-year growth of 2.2%, attributed to the substantial increase in management franchise and licensing income under its light-asset model [1]. - However, the revenue saw a quarter-on-quarter decline of 10.4% [1]. Operational Metrics - As of the end of Q1 2025, H World Group operated 11,685 hotels, with 11,564 located in China, including 552 leased and owned hotels and 11,012 managed franchise and licensed hotels [1]. - The average daily room rate (ADR) for H World China in Q1 was 272 RMB, down from 280 RMB in the same period last year and 277 RMB in the previous quarter [1][2]. - The occupancy rate for H World China was 76.2%, which, while significantly above the industry average, represented a decline from 77.2% year-on-year and 80.0% quarter-on-quarter [2]. Profitability - H World Group achieved a net profit attributable to shareholders of 894 million RMB in Q1, marking a year-on-year increase of 35.7% [2]. - The company's EBITDA for the quarter was 1.615 billion RMB, also showing substantial year-on-year growth [2]. Future Outlook - For Q2 2025, H World Group anticipates revenue growth between 1% to 5%, or 3% to 7% excluding certain factors [2]. - The CEO emphasized a commitment to long-term strategies, focusing on quality network expansion, brand positioning, and enhancing sales capabilities through its membership program [2].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 33.5, indicating a potential upside from the current price of HKD 28.70 [1][2]. Core Insights - The company reported Q1 2025 revenue of RMB 5.4 billion, a year-on-year increase of 2.2%, and a net profit of RMB 890 million, up 35.7% year-on-year. Adjusted EBITDA was RMB 1.5 billion, reflecting a 5.3% increase [7]. - The company is focusing on a light-asset strategy, with rental and owned income accounting for 51.7% of total revenue, while management franchise and licensing contributed 46.3% [3][7]. - The overall hotel count reached 11,685, with 11,564 under the main brand and 121 under the DH division, indicating a net addition of 539 hotels in the reporting period [7]. - The gross margin improved by 0.74 percentage points to 33.2%, driven by the light-asset strategy, while the expense ratio decreased by 0.72 percentage points to 14.46% [7]. - The report anticipates a gradual improvement in RevPAR as the peak season approaches, despite short-term pressures from competition and economic factors [7]. Financial Summary - The company is projected to achieve net profits of RMB 3.68 billion, RMB 4.22 billion, and RMB 4.84 billion for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 20.6%, 15%, and 14.6% [9]. - Earnings per share (EPS) are expected to be RMB 1.20, RMB 1.38, and RMB 1.58 for the same years, with corresponding price-to-earnings (P/E) ratios of 22x, 19x, and 17x, indicating reasonable valuation [9][12]. - The total revenue is forecasted to grow from RMB 25.15 billion in 2025 to RMB 29.85 billion by 2027, reflecting a steady upward trend [12].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 33.5, indicating a potential upside from the current price of HKD 28.70 [1][2][7]. Core Insights - The company reported Q1 2025 revenue of RMB 5.4 billion, a year-on-year increase of 2.2%, and a net profit of RMB 890 million, up 35.7% year-on-year. Adjusted EBITDA was RMB 1.5 billion, reflecting a 5.3% increase [7]. - The company is focusing on a light-asset strategy, with rental and owned income accounting for 51.7% of total revenue, while management franchise and licensing contributed 46.3% [3][7]. - The overall hotel count reached 11,685, with 11,564 under the main brand and 121 under the DH division, indicating a net addition of 539 hotels [7]. - The gross margin improved by 0.74 percentage points to 33.2%, driven by reduced operating costs due to the light-asset strategy [7]. - The report anticipates a gradual improvement in RevPAR as the peak season approaches, despite short-term pressures from competition and economic factors [7]. Financial Summary - The company is projected to achieve net profits of RMB 3.68 billion, RMB 4.22 billion, and RMB 4.84 billion for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 20.6%, 15%, and 14.6% [9][12]. - Earnings per share (EPS) are expected to be RMB 1.20, RMB 1.38, and RMB 1.58 for the same years, with corresponding price-to-earnings (P/E) ratios of 22x, 19x, and 17x, indicating reasonable valuation [9][12]. - The company’s total revenue is forecasted to grow from RMB 25.15 billion in 2025 to RMB 29.85 billion by 2027 [12].

新华财经上海5月21日电（谈瑞）随着华住集团在5月20日晚间发布2025年第一季度财报，中国酒店业三 大头部集团——锦江酒店、华住集团、首旅如家的经营分化格局愈加明朗。 在消费需求结构性调整、行业刚需竞争加剧的背景下，三家企业分别交出截然不同的答卷：华住集团凭 借轻资产战略逆势增长，锦江酒店规模扩张难掩盈利困境，首旅如家则通过成本控制实现利润突围。 华住强势增长，锦江净利骤降超八成 "2025年第一季度，酒店行业的供给增长仍未见边际放缓，但商务需求呈改善趋势。"中信证券消费行业 首席分析师姜娅在研报中表示，一季度，酒店行业RevPAR同比下降3.6%，较上一季度降低5.2%的水平 进一步收窄，其中平均价格下降2.3个百分点，平均入住率下降0.7个百分点。截至3月底，酒店数量同比 增长9.3%，客房数量同比增长8.8%，整体供给同比增速较2024年年底略有提升。 这一趋势在三大头部集团的财报数据上得到了充分印证。在RevPAR这一核心经营指标上，三大集团均 面临下滑压力，但程度差异较为显著。 根据行业协会统计数据，截至2024年底，中国国内酒店集团中，规模排名居前的依次是锦江酒店（客房 数129.1万间、门店数 ...

Financial Data and Key Metrics Changes - The overall revenue for the group increased by 2.2% year over year to RMB 5.4 billion [21] - Adjusted EBITDA grew by 5.3% year over year to RMB 1.5 billion [24] - The number of rooms increased by 20% year over year to over 1.1 million [21] Business Line Data and Key Metrics Changes - Revenue from Lexi Huazhu grew by 5.5% year over year, while DH revenue decreased by 11.3% year over year due to the transformation of leased hotels to franchised hotels [22] - Managed and franchised business revenue grew by 21.1% year over year, driven by strong network expansion [22] - The number of upper midscale hotels in operation increased by 36% year over year to 933 [13] Market Data and Key Metrics Changes - RevPAR declined by 3.9% year over year, with ADR decreasing by 2.6% year over year and occupancy rate declining by one percentage point [7] - RevPAR for legacy DH improved by 12.7% to €65, with ADR improving by 2.8% and occupancy increasing by 5.3 percentage points [17] Company Strategy and Development Direction - The company is focusing on differentiated strategies for products and services to capture rising leisure demand, particularly from emerging travelers [10] - The company aims to maintain a strong growth momentum in the upper midscale segment and is continuously upgrading products to meet evolving customer demands [13] - The company is pursuing an asset-light strategy, with 46% of its hotels being managed or franchised [18] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about potential future volatilities and uncertainties due to tariff issues affecting market outlook [8] - Despite challenges in business travel demand, management believes the leisure travel demand remains strong and is optimistic about future growth [8][29] - For the second quarter, management expects RevPAR to decline at a low single digit but to narrow on a sequential basis [29] Other Important Information - The company opened 695 hotels and closed 155 hotels in the first quarter, with a pipeline of 2,865 hotels [11] - The member base increased to nearly 280 million, with room nights generated through the central reservation system accounting for 65.1% [15] Q&A Session Summary Question: Expectations on RevPAR for Q2 2025 and full year 2025 - Management expects RevPAR to decline at a low single digit for Q2 but aims to stabilize it over time, with uncertainties affecting the full year guidance [29] Question: Specific reasons behind the weakness in business travel - Management attributes the weakness in business travel to supply issues rather than demand, citing an oversupply in the market [30] Question: Further plans on the DH strategy to improve profitability - Management is focused on asset-light transactions and reducing overhead costs to improve profitability in the DH segment [34] Question: Evaluation of the competition landscape in limited service - Management acknowledges the pressure on RevPAR due to oversupply but emphasizes efforts to improve operational efficiency and support franchisees [36] Question: SG&A costs and one-off restructuring costs - Management confirms that restructuring is ongoing and that SG&A costs are not yet fully normalized, with some effects still to be seen [42] Question: Gap between blended RevPAR and like-for-like RevPAR - Management explains the gap is due to product upgrades and pressures from supply surges, with efforts underway to optimize revenue management [47]

Core Insights - H World Group Limited reported strong growth and continued momentum in its asset-light transformation and brand loyalty in the first quarter of 2025 [1] Group 1: Hotel Openings and Operations - H World Group achieved 538 net hotel openings in Q1 2025, bringing the total number of hotels in operation to 11,685 [2] - The total number of rooms worldwide reached 1,142,158, reflecting a 20% increase year-over-year [2] - The company operates in 1,394 cities across China, with plans to expand to 2,000 cities in the future [2] - As of March 31, H World had a pipeline of 2,888 hotels [2] Group 2: Asset-Light Strategy - Revenue from manachised and franchised hotels increased by 21% year-over-year to RMB 2.5 billion (approximately US$344 million) [3] - The manachise model combines the scalability of franchising with operational control, facilitating efficient and brand-consistent growth [3] Group 3: Loyalty and Direct Bookings - H Rewards membership reached 277 million, making it one of the largest loyalty platforms in the global hospitality industry [4] - Direct bookings from members accounted for over 65% of total reservations, a 5.4 percentage point increase year-on-year [4] Group 4: Experience Upgrade Initiatives - The company is advancing product upgrade initiatives to enhance consumer experience across core brands [5] - The upper-midscale segment saw a 36% year-on-year increase in operating hotels and a 22% expansion in the development pipeline [5] Group 5: Future Outlook - The CEO expressed confidence in achieving the full-year target of approximately 2,300 gross hotel openings [6] - The company will continue to focus on high-quality network expansion, brand positioning, service excellence, and strengthening sales capabilities centered around the H Rewards program [6]

Financial Data and Key Metrics Changes - In Q1 2025, the group's revenue increased by 2.2% year over year to RMB 5.4 billion, aligning with guidance [19] - Adjusted EBITDA grew by 5.3% year over year to RMB 1.5 billion, with Lexi Huazhu's adjusted EBITDA increasing by 5.8% year over year to RMB 1.6 billion [23] - Operating cash flow generated in Q1 was RMB 580 million, with cash and cash equivalents at RMB 11.8 billion, indicating a solid cash position of RMB 6.5 billion [23] Business Line Data and Key Metrics Changes - Revenue from Lexi Huazhu grew by 5.5% year over year, while DH revenue decreased by 11.3% year over year due to the transformation of 10 leased hotels to franchised hotels [20] - The number of upper midscale hotels in operation increased by 36% year over year to 933, with the pipeline growing by 22% year over year to 523 [11] - The proportion of managed and franchised hotels increased to 46%, up from 38% in Q1 2024, with asset-light hotels in the pipeline at 57% [16] Market Data and Key Metrics Changes - RevPAR declined by 3.9% year over year, with ADR decreasing by 2.6% and occupancy rate declining slightly by one percentage point [6] - The company noted strong performance in North Africa and the Middle East, with RevPAR for legacy DH improving by 12.7% to €65 [15] - The company reported a positive year-over-year growth in industry RevPAR during the Labor Day holiday, indicating a recovery in leisure travel demand [8] Company Strategy and Development Direction - The company is focusing on differentiated strategies for products and services to capture rising leisure demand, particularly from emerging travelers [8] - There is a commitment to maintaining a strong growth momentum in the upper midscale segment while upgrading products and core brands to meet evolving customer demands [11] - The company aims to achieve a leading position in market share while ensuring profitability for newly opened hotels [55] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding leisure travel demand, despite uncertainties related to tariff issues [7] - For Q2 2025, management expects RevPAR to decline at a low single digit but to narrow on a sequential basis, with a focus on stabilizing revenue [28] - The management acknowledged that the business travel segment is under pressure primarily due to supply issues rather than demand [29] Other Important Information - The company opened 695 hotels and closed 155 in Q1 2025, with a pipeline of 2,865 hotels by quarter end [9] - The member base increased to nearly 280 million, with room nights generated through the central reservation system accounting for 65.1% [13] - The company is actively pursuing asset-light transactions to improve profitability and reduce overhead costs [34] Q&A Session Summary Question: Expectations on RevPAR for Q2 2025 and full year 2025 - Management expects RevPAR to decline at a low single digit for Q2 2025, with efforts to stabilize it amid uncertainties [28] Question: Specific reasons behind business travel weakness - Management indicated that the weakness is more related to supply issues rather than demand, with significant supply increases over the past two years [29] Question: Further plans on DH strategy to improve profitability - Management is focused on asset-light transactions and reducing overhead costs, with ongoing restructuring efforts [34] Question: Evaluation of competition landscape in limited service - Management noted that fixed costs, particularly rental costs, have been declining, and operational efficiency is being improved to maintain competitiveness [37] Question: Reasons for the gap between blended RevPAR and like-for-like RevPAR - The gap is attributed to continuous product upgrades and pressures from supply surges, with efforts to optimize revenue management [49]

Core Viewpoint - Huazhu Group reported a revenue of 5.4 billion yuan in Q1 2025, a year-on-year increase of 2.2%, with hotel operating revenue reaching 22.5 billion yuan, up 14.3% year-on-year [1][2] Financial Performance - The number of operating hotels reached 11,685 with a total of 1,142,158 rooms, including 11,564 hotels in China [2] - In Q1 2025, 694 new hotels opened while 155 closed, with a total of 2,865 hotels awaiting opening, showing a slight decrease due to rapid openings and proactive pipeline management [2] - The overall occupancy rate (OCC) was maintained at 76.2%, reflecting a balance between efficiency and scale [2] Market Trends - The average daily rate (ADR) was 272 yuan, and the average revenue per available room (RevPAR) was 208 yuan, influenced by last year's rapid increase in hotel supply [4] - There is a strong demand for high-quality hotel products, with mid-to-high-end hotels seeing a 36% year-on-year increase, totaling 933 hotels, and 523 mid-to-high-end hotels awaiting opening, a 22% increase [4][7] Strategic Initiatives - Huazhu is focusing on upgrading its "Golden Triangle" brands (Hanting, Quanjing, and Juzi) to meet consumer demand for high cost-performance products, with significant increases in the proportion of upgraded products [2] - The membership program, Huazhu Club, has grown to nearly 280 million members, contributing to a 5.4 percentage point increase in room nights booked through the central reservation system [7] - The company has introduced a digital product for hotel GOP management, integrating seven cost modules to help franchisees achieve more precise cost control [7] Global Expansion - Huazhu Group is steadily advancing its overseas business, with RevPAR for international operations increasing by 12.7% year-on-year, driven by a 2.8% increase in ADR and a 5.3 percentage point rise in occupancy rate [7] Future Outlook - The company aims to continue balancing scale and efficiency, contributing to the high-quality development of the Chinese hotel industry through strategic focus and effective execution [8]