Investment Rating - The investment rating for the company is "Outperform the Market" [6] Core Views - The company reported steady growth in Q2, with hotel revenue reaching approximately 26.92 billion yuan, a year-on-year increase of 15.0%, and a net profit of 1.54 billion yuan, up 44.7% [1][10] - The company is strategically shifting focus from direct-operated stores to franchise operations, with franchise revenue growing by 22.8% in Q2, while direct-operated store revenue declined [2][13] - The company has adjusted its full-year RevPAR expectations downward, anticipating a low single-digit decline, while maintaining revenue growth expectations of 2%-6% [4][15] Summary by Sections Financial Performance - Q2 revenue was 6.43 billion yuan, a 4.5% increase year-on-year, with adjusted net profit at 1.35 billion yuan, up 7.6% [1][10] - The adjusted EBITDA grew by 11.3% year-on-year [1] - The company’s total hotel operating revenue for Q2 was approximately 26.92 billion yuan, with a significant contribution from Huazhu China [10] Business Strategy - The company is focusing on franchise business growth, with franchise room numbers increasing by 20.0% year-on-year, while direct-operated store revenue and profit declined [2][13] - The company is strategically reducing the number of direct-operated stores while optimizing existing store profitability through rent agreements and efficiency improvements [2] Market Trends - The mixed RevPAR for Huazhu China in Q2 was 235 yuan, a decrease of 3.8% year-on-year, with same-store RevPAR down 7.9% [3][14] - The company is actively renovating older stores and launching new brands to adapt to market changes, with a focus on high-quality hotel development [3][14] Future Outlook - The company has revised its full-year RevPAR forecast to a low single-digit decline, reflecting ongoing market uncertainties [4][15] - The company plans to enhance its membership program, which has grown to 288 million members, contributing significantly to revenue [4][15] - The company has announced a semi-annual dividend policy totaling 250 million USD, reflecting strong shareholder returns [4][15]

Group 1 - The company achieved revenue of 6.4 billion yuan in Q2 2025, a year-on-year increase of 4.5%, reaching the upper limit of the guidance growth rate of 1%-5% [1] - Net profit attributable to shareholders was 1.54 billion yuan, up 44.7%, driven by asset-light transformation, a 2.3 percentage point increase in gross margin, and foreign exchange gains of 435 million yuan, leading to a 6.6 percentage point increase in net profit margin [1] - Management franchise and licensing revenue reached 2.9 billion yuan, a year-on-year increase of 22.8%, exceeding the guidance growth rate of 18%-22% [1] Group 2 - The company opened 595 new stores in mainland China in Q2 2025, a year-on-year increase of 4.9%, with a net increase of 452 stores [1] - As of the end of Q2 2025, the total number of stores in mainland China reached 12,016, a year-on-year increase of 18.4%, with franchise stores accounting for 95.4% [1] - The company has a store reserve of 2,925, a quarter-on-quarter increase of 2.3%, actively working towards the annual guidance of opening 2,300 new stores and a net increase of 1,700 stores [1] Group 3 - The mainland RevPAR decreased by 3.8% to 235 yuan in Q2 2025, with occupancy rate down 1.6 percentage points to 81.0% and ADR down 1.9% to 290 yuan [2] - The company expects Q3 2025 revenue growth rate of 2%-6%, with a 4%-8% growth rate excluding the DH segment, and a franchise business revenue growth rate of 20%-24%, accelerating compared to Q2 2025 [2] - The company has issued a total of 550 million USD in dividends this year, corresponding to a dividend yield of 5.3% [2]

Investment Rating - The report maintains a "Strong Buy" rating for the company [3][6]. Core Insights - The company reported Q2 2025 revenue of 6.43 billion yuan, a year-on-year increase of 4.5%, aligning with the guidance of 0%-5% [1][6]. - Adjusted EBITDA and net profit for Q2 2025 were 2.27 billion yuan and 1.35 billion yuan, respectively, reflecting year-on-year growth of 11.3% and 7.6% [1][6]. - The company anticipates Q3 2025 revenue growth of 2%-6%, with domestic hotel revenue expected to grow by 4%-8% [1][6]. Financial Performance - The company achieved a gross margin of 41.6%, an increase of 2.3 percentage points year-on-year [6]. - The operating profit margin for Q2 2025 was 27.8%, up by 2.2 percentage points year-on-year [6]. - The company’s total revenue for 2023 is projected at 21.882 billion yuan, with a year-on-year growth of 58% [2][8]. Operational Metrics - The number of domestic hotels reached 12,016, representing an 18.4% increase year-on-year [6]. - The company has a robust pipeline with 2,947 hotels awaiting opening, sufficient to support its annual opening plan [6]. - The overall hotel occupancy rate, average daily rate, and RevPAR showed a slight decline, with year-on-year changes of -1.6 percentage points, -1.9%, and -3.8%, respectively [6]. Shareholder Information - The total share capital is 3,069 million shares, with a market capitalization of 80.7 billion HKD [3][6]. - The major shareholder, Qi Qi, holds a 31.21% stake in the company [3].

Core Insights - Huazhu Group reported a revenue of 11.8 billion yuan for the first half of 2025, a year-on-year increase of 3.5%, and a net profit of approximately 2.4 billion yuan, up 41.2% [1][4] - Key performance indicators in the Chinese market, including average daily rate (ADR), occupancy rate, and revenue per available room (RevPAR), showed a decline compared to the previous year [1][5] - Despite the challenges, Huazhu continues to expand aggressively, with a total of 12,137 stores as of mid-2025, an 18% increase year-on-year, and 2,947 additional stores in the pipeline [1][9] Financial Performance - In Q2 2025, Huazhu's revenue reached 6.4 billion yuan, a 4.5% increase year-on-year, with adjusted net profit of 1.35 billion yuan, up 7.6% [4] - Adjusted EBITDA for Q2 was 2.3 billion yuan, reflecting an 11.3% increase [4] - The operating profit for Q2 was 1.8 billion yuan, a 13.7% increase year-on-year [1] Market Conditions - The hotel industry is facing overall pressure, with STR reporting a 5% decline in average RevPAR for the industry in the first half of 2025 [8] - Huazhu's ADR was 290 yuan, down 1.9% year-on-year, and occupancy rate was 81%, a decrease of 1.6 percentage points [1][5] - RevPAR decreased by 3.8% to 235 yuan [1][5] Expansion Strategy - Huazhu's strategy involves rapid store openings, focusing on economy and mid-range hotels, with 595 new openings in Q2, 44% of which were economy hotels and 42% mid-range [8] - The company aims to balance the pace and quality of new store openings while upgrading existing stores [12][11] Business Segmentation - Huazhu's revenue from its Chinese operations was approximately 9.6 billion yuan, a 5.6% increase, contributing 81.4% to total revenue [14] - The international segment generated about 2.2 billion yuan, a decrease of 4.9%, accounting for 18.6% of total revenue [14] - The management franchise and licensing models are expanding, with 92% of hotel rooms operated under these models, up 2% year-on-year [17] Cost Management - Huazhu's hotel operating costs were 7.356 billion yuan, a 0.82% increase, while the cost per store decreased by 14.19% to 607,900 yuan [10] - The company has achieved a 10% to 20% reduction in procurement costs across various categories [10] Membership and Customer Engagement - As of Q2 2025, Huazhu's membership base reached 288 million, a 17.5% increase year-on-year [14] - The company upgraded its direct booking platform and membership club, introducing a dual guarantee feature to enhance customer service [14] Competitive Landscape - Huazhu ranks first among China's four major hotel groups in terms of revenue, with 23.891 billion yuan, but faces competition from faster-growing peers like Atour [18][20] - The company is also exploring retail opportunities, although results have yet to be significant [21]

Core Viewpoint - The hotel industry in China faces challenges due to rapid supply increases and macroeconomic factors, but H World Group (Huazhu) demonstrates resilience and growth through strategic expansion and operational excellence [1][3]. Financial Performance - In Q2 2025, Huazhu's hotel revenue reached 26.9 billion yuan, a 15% year-on-year increase; total revenue was 6.4 billion yuan, up 4.5% [1]. - Management and franchise income grew by 22.8% to 2.9 billion yuan; adjusted net profit was 1.35 billion yuan, a 7.6% increase; adjusted EBITDA was 2.3 billion yuan, up 11.3% [1]. - The total number of operating hotels reached 12,137, an 18% increase year-on-year, with 1,184,915 rooms, up 18.3% [1]. Expansion Strategy - Huazhu opened 597 new hotels in Q2, with a focus on economy and mid-range hotels, which accounted for 44% and 42% of new openings, respectively [6]. - The company emphasizes high-quality expansion rather than blind growth, targeting underdeveloped markets, including rural areas [3][6]. - The brand matrix is diversifying, with the launch of new hotel versions catering to different market segments [8][10]. Market Position and Trends - The Chinese hotel market is experiencing structural changes, with mid-range hotels becoming the main growth driver [10]. - Huazhu's brands, including Hanting and Qianxi, are positioned to meet the rising demand for quality and affordable accommodations [11]. - The company ranks fourth globally in terms of operating rooms, surpassing InterContinental Hotels Group [8]. Membership and Customer Engagement - Huazhu upgraded its membership program to address consumer concerns about pricing, enhancing member loyalty [12]. - As of Q2, the number of Huazhu members reached 288 million, a 17.5% increase, with member bookings accounting for 65.1% of total room nights [12].

Core Viewpoint - Huazhu Group reported a solid performance in Q2 2025, with significant growth in hotel revenue and adjusted net profit, despite challenges in the overall hotel industry [1][2]. Financial Performance - In Q2 2025, Huazhu Group's hotel revenue reached 26.9 billion RMB, a year-on-year increase of 15% [1]. - The group's total revenue was 6.4 billion RMB, up 4.5% year-on-year [1]. - Adjusted net profit was 1.35 billion RMB, reflecting a 7.6% increase [1]. - Adjusted EBITDA was 2.3 billion RMB, showing an 11.3% growth [1]. Hotel Operations - As of the end of Q2, Huazhu Group operated 12,137 hotels, an 18% increase year-on-year [1]. - The total number of rooms reached 1,184,915, up 18.3% from the previous year [1]. - The company opened 597 new hotels during the quarter, with 2,947 hotels in the pipeline, covering 1,522 cities [1]. Future Guidance - For Q3 2025, Huazhu Group expects revenue growth of 2% to 6% compared to Q3 2024, or 4% to 8% excluding Huazhu International [1]. - Management and franchise income is projected to grow by 20% to 24% year-on-year [1]. Market Challenges - Despite the positive financial results, the hotel industry faces pressure on average daily rate (ADR), occupancy rate (OCC), and revenue per available room (RevPAR) [2]. - Q2 2025 figures for Huazhu China showed ADR at 290 RMB, OCC at 81%, and RevPAR at 235 RMB, all lower than the same period in 2024 [2]. - The CEO noted that rapid supply growth in the hotel market and macroeconomic factors have created challenges for the industry [2]. Strategic Shift - Huazhu Group is implementing a light-asset strategy, reducing direct operations while focusing on management and franchise models [3][4]. - Revenue from leased and owned hotels decreased by 8.7% to 6.2 billion RMB, while management and franchise income grew by 22% to 5.4 billion RMB, now accounting for 45.4% of total revenue [3][4]. - The shift to a light-asset model has improved gross profit margins, with operating profit margin rising from 22.5% to 24.3% year-on-year [4].

Investment Rating - The report maintains a "Buy" rating for the company [4][5]. Core Insights - The company reported its mid-year performance for 2025, which met expectations, with a revenue of RMB 6.4 billion in Q2, reflecting a year-on-year increase of 4.5% [4]. - The domestic segment generated RMB 5.1 billion in revenue, up 5.7% year-on-year, exceeding previous guidance [4]. - The company continues to benefit from its asset-light strategy, with management and franchise income growing by 22.8% to RMB 2.9 billion [4]. - The company has accelerated its asset-light transformation in overseas markets, with a significant improvement in operational data for its DH hotels [4]. Financial Data and Earnings Forecast - Revenue projections for the company are as follows: - 2023: RMB 21,882 million - 2024: RMB 23,891 million - 2025E: RMB 25,603 million - 2026E: RMB 26,794 million - 2027E: RMB 28,215 million - The expected net profit attributable to the parent company is projected to be: - 2025E: RMB 4,780 million - 2026E: RMB 5,727 million - 2027E: RMB 6,234 million - The company’s earnings per share (EPS) is forecasted to be RMB 1.54 in 2025E, RMB 1.84 in 2026E, and RMB 2.01 in 2027E [4][5]. Operational Efficiency - The company has 12,137 hotels in operation globally, with a total of 1,184,915 rooms as of Q2 2025 [4]. - The revenue from management and franchise hotels accounted for 45.4% of total revenue in H1 2025, up from 38.5% in the same period last year [4]. - The operating profit margin improved by 2.2 percentage points to 27.8% in Q2 2025, with operating profit increasing by 13.7% to RMB 1.8 billion [4]. Market Performance - The company’s domestic RevPAR (Revenue per Available Room) was RMB 235, down 3.7% year-on-year, while the overseas DH hotels saw a RevPAR of €88, up 7.3% year-on-year [4]. - The company plans to distribute a cash dividend of approximately $250 million for H1 2025, reflecting confidence in future cash flows and commitment to shareholder returns [4].

Core Viewpoint - The Chinese hotel industry is facing a new development situation, with "value for money" becoming a key focus for the future, emphasizing the need for companies to quickly identify their positioning and innovate their products and services [1][2]. Group 1: Industry Trends - Consumers are increasingly focused on value for money, seeking better products at lower prices, particularly among younger generations who are sensitive to pricing while valuing quality [2][3]. - Traditional high-end hotels are experiencing stagnation or decline in revenue, leading to a structural transformation in the hotel industry, with older five-star hotels needing significant business model adjustments [2][3]. - The hotel market is seeing increased supply and fierce competition, especially in county-level expansions, which presents challenges in maintaining stable customer flow and managing human resources under low-cost conditions [4][5]. Group 2: Company Strategy - Huazhu Group is leveraging its full brand matrix to efficiently meet the transformation needs of existing properties, while also improving platform efficiency and product iteration to align with new consumer trends [2][3]. - The company reported a 17.5% year-on-year increase in its membership base, reaching 288 million members, and a 28.8% increase in member booking nights [3]. - In Q2, Huazhu opened 597 new hotels and had 2,947 hotels under development, with a total of 1,184,915 rooms in operation, marking an 18.3% year-on-year increase [4]. Group 3: Product and Service Innovation - Huazhu is enhancing product design and service quality to meet consumer demands for value for money, focusing on technology application, supply chain management, and a robust membership system [3][4]. - The company is expanding its mid-range brand, with a 57.1% year-on-year increase in the number of operating and upcoming hotels under the Intercity brand, achieving a RevPAR of 370 yuan [2][4]. - Huazhu is also innovating its offerings to cater to the "cultural tourism" trend, integrating better hotel experiences into travel, and focusing on family suites and services for senior citizens and family travel [6].

Market Overview - The Hong Kong stock market experienced a decline, with the Hang Seng Index falling by 0.24% to close at 25,104.61 points, and a total trading volume of HKD 239.49 billion [1] - The Hang Seng Tech Index was the worst performer, dropping 0.77% to 5,498.5 points [1] - Huatai Securities noted that the market is in a critical phase with a lack of trading themes and awaiting verification of significant domestic and overseas events, suggesting a window for position adjustment [1] Blue-Chip Stocks Performance - China Resources Power (00836) led the blue-chip decline, falling 5.9% to HKD 18.51, contributing a loss of 3.86 points to the Hang Seng Index [2] - The company reported a revenue of HKD 50.267 billion for the first half of 2025, a decrease of 1.67% year-on-year, and a profit attributable to shareholders of HKD 7.872 billion, down 15.92% [2] - Other notable blue-chip movements included China Biologic Products (01177) rising 3.49% and China Unicom (00762) increasing by 3.39% [2] Sector Highlights High-Speed Rail Infrastructure - Major technology stocks generally weakened, while high-speed rail infrastructure stocks performed well, with China CNR (01766) rising 5.85% and Times Electric (03898) increasing by 5.43% [3] - The National Railway Group announced a tender for 210 high-speed train sets, exceeding market expectations, indicating a positive outlook for the sector [3] Pharmaceutical Sector - The pharmaceutical sector saw most stocks rise, with Basilea Pharmaceutica (02616) increasing by 12.87% and Akeso (01167) rising by 10.04% [4] - The Chinese Premier emphasized the need for high-quality technological support and policy backing for the biopharmaceutical industry, aiming to enhance innovation and production of effective medicines [4] Stablecoin Concept Stocks - Stablecoin-related stocks were active, with ZhongAn Online (06060) rising 6.98% and Yao Cai Securities (01428) increasing by 5.75% [4] - Goldman Sachs reported a new expansion cycle for the stablecoin market, potentially reaching trillions of dollars, with payment applications being a key growth driver [6] Notable Stock Movements - Crystal International (02232) reached a new high, closing up 12.66% at HKD 6.85, reporting a revenue of USD 1.229 billion, a 12.4% increase year-on-year [7] - Hong Kong Robotics (00370) surged 12.86% after signing a significant order for 10,000 humanoid robots, marking a milestone in the industry [8] - Huazhu Group (01179) reported a total revenue of RMB 6.426 billion for Q2 2025, a 4.52% increase, with a net profit of RMB 1.544 billion, up 44.7% [9] - Great Wall Motors (02333) saw a rise of 6.45% following the launch of its new PHEV model, which received over 21,856 orders within 24 hours [10] - ZTE Corporation (00763) increased by 5.38%, with analysts highlighting its underestimated progress in AI and network business [11]

本报讯 （记者梁傲男）8月20日，华住集团有限公司（以下简称"华住集团"）发布上半年财报。今年二 季度公司实现酒店营业额269亿元，同比增长15%；收入达64亿元，同比增长4.5%；经调整净利润13.5 亿元，同比增长7.6%。 截至二季度末，华住集团在营酒店总数达12137家，同比增长18%；在营客房总数1184915间，同比增加 18.3%。报告期内，集团新开业酒店597家，待开业酒店2947家，期末运营中及待开业酒店合计覆盖城 市达1522个。 从核心指标来看，二季度在市场供给增加的压力下，华住中国的日均房价（ADR）、入住率（OCC） 和平均可出租客房收入（RevPAR）为290元、81%和235元，均较上季度有所回升，并分别恢复至2024 年同期的98.1%、98.4%和96.2%。 二季度，华住中国新开业门店数量为595家，其中经济型酒店和中档酒店占比分别达44%、42%，符合 华住中国以经济型和中档酒店为核心服务大众市场的路线。截至二季度末，华住中国运营中及待开业酒 店合计覆盖城市达到1416个，较上年同期增加88个。 华住集团首席执行官金辉表示，集团始终坚持长期主义，强化高质量发展、快速抢占核 ...