SINGAPORE and SHANGHAI, China, July 23, 2024 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ: HTHT and HKEX: 1179) ("H World" or the "Company"), a leading and fast-growing hotel group, today announced that, in order to enhance shareholder value, its board of directors (the "Board") has approved a three-year shareholder return plan with an aggregate amount of distributions that may be made to the Company's shareholders of up to US$2,000,000,000, effective from July 23, 2024 (the "Shareholder Return Plan"). ...

SINGAPORE and SHANGHAI, China, July 23, 2024 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World” or the “Company”), a leading and fast-growing hotel group, today announced that, in order to enhance shareholder value, its board of directors (the “Board”) has approved a three-year shareholder return plan with an aggregate amount of distributions that may be made to the Company’s shareholders of up to US$2,000,000,000, effective from July 23, 2024 (the “Shareholder Return Plan”). ...

SHANGHAI, July 02, 2024 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ:HTHT) ("H World" or the "Company"), a key player in the global hotel industry, today announced that (i) Mr. Shangzhi Zhang will step down as a director of the board of directors of the Company (the "Board") and serve as an observer of the Board, effective from July 2, 2024, and (ii) Ms. Jie Zheng, a senior advisor of the Company and a supervisory board member of Steigenberger Hotels GmbH, a subsidiary of the Company, will serve as an ...

SHANGHAI, July 02, 2024 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World” or the “Company”), a key player in the global hotel industry, today announced that (i) Mr. Shangzhi Zhang will step down as a director of the board of directors of the Company (the “Board”) and serve as an observer of the Board, effective from July 2, 2024, and (ii) Ms. Jie Zheng, a senior advisor of the Company and a supervisory board member of Steigenberger Hotels GmbH, a subsidiary of the Company, w ...

Market Overview - Chinese stocks have lost momentum after an initial recovery in early 2023, with investors looking for more government action to stimulate the economy and property market [1] - The iShares MSCI China ETF (NASDAQ:MCHI) saw a year-to-date increase of over 16% through May 17, but has since dropped approximately $4.40 (9%) in the following 40 days due to limited government intervention [1] Company Performance Yum China Holdings (YUMC) - Yum China reported Q1 2024 results with total revenues reaching an all-time high, and core operating profit showing modest growth from last year's high base [3] - The company plans to expand its store count to 15,000, having received 26 out of 30 analyst ratings as a Buy with a target price of $51.14, which is 62% higher than its current trading price [3] H World Group (HTHT) - H World Group operates 9,817 hotels and reported a 17.8% increase in revenues for Q1 2024, totaling $731 million, driven by higher occupancy rates and average daily rates [5] - The company opened 569 hotels in Q1 2024, more than double the number from Q1 2023, and has a development pipeline of 3,138 hotels, a 36% increase from the previous year [5] PDD Holdings (PDD) - PDD Holdings is favored by analysts, with 96% of 49 analysts rating it a Buy, despite concerns over potential U.S. tariffs affecting its valuation [6] - The stock trades at 13 times its expected 2024 earnings, which is about half the average for Nasdaq 100 stocks, reflecting investor caution due to regulatory risks [7]

Company Overview - H World Group Limited is a significant player in the global hotel industry, operating 9,817 hotels with 955,657 rooms across 18 countries as of March 31, 2024 [2] - The company's brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon, and Song Hotels [2] - H World holds master franchise rights for Mercure, Ibis, and Ibis Styles, along with co-development rights for Grand Mercure and Novotel in the pan-China region [2] Business Model - H World's business encompasses leased and owned, manachised, and franchised models [3] - As of March 31, 2024, 11% of hotel rooms are operated under the lease and ownership model, while 89% are under the manachise and franchise model [3] - The company maintains a consistent standard and platform across all its hotels [3] Recent Developments - The 2024 annual general meeting was held on June 27, 2024, where several resolutions were passed, including the appointment of Deloitte Touche Tohmatsu as auditor for 2024 and amendments to the 2023 share incentive plan [1] - The AGM authorized directors and officers to take necessary actions to implement the resolutions [1]

Core Viewpoint - H World Group Limited (NASDAQ:HTHT) maintains a Hold rating due to a lackluster short-term outlook for Q2 2024, while still having favorable long-term growth potential driven by expansion into new Chinese cities and a shift to a capital-light model for overseas operations [2][7] Short-Term Outlook - H World has guided for Q2 2024 top line growth of +7% to +11% YoY in RMB terms, a decline from +18% YoY growth in Q1 2024 [3] - The company expects "flattish to slightly negative" RevPAR growth for its Mainland Chinese hotel operations in Q2 2024, contrasting with a +3% YoY RevPAR increase in Q1 2024 [3] - The overall performance of the Mainland Chinese hotel industry was weak during the Labor Day holiday, with RevPAR and occupancy rates decreasing by -5% and -430 basis points, respectively [3] - The Chinese hotel sector's Labor Day holiday ADR was -12% lower compared to the previous year, attributed to increased market supply and outbound travel diversion [4] - Selling and marketing expenses rose by +33% YoY to RMB260 million, increasing the S&M costs-to-revenue ratio from 4.4% in Q1 2023 to 4.9% in Q1 2024 [4] Long-Term Growth Potential - Analysts forecast H World's revenue and normalized operating profit to grow at CAGRs of +10% and +18% from FY 2023 to FY 2027, with normalized operating margin projected to improve from 21.5% in FY 2023 to 28.3% in FY 2027 [6] - The company is expanding into lower-tier Chinese cities, with the proportion of hotels in these cities increasing from 39% in Q1 2023 to 40% in Q1 2024, and 54% of hotels in the pipeline located in lower-tier cities [6] - H World aims to have hotels in 2,000 Chinese cities in the long run, having already established a presence in 1,290 cities as of March 31, 2024, up +14% from the previous year [6] - The overseas business is transitioning to a capital-light model, moving from leased and owned hotels to franchised hotels, which is expected to enhance overall operating profitability [6] Valuation Comparison - H World currently trades at 14.4 times consensus next twelve months' EV/EBITDA, comparable to peers such as Hyatt Hotels at 14.3 times and Marriott International at 15.4 times [7]

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company has shown stable growth in operational metrics for Q1 2024, with net store openings exceeding expectations. The recovery in leisure travel demand has positively impacted the company's RevPAR, and its proactive focus on B2B business has positioned its corporate travel capabilities above industry standards. The revenue forecasts for 2024E/2025E/2026E are projected at 241/259/279 billion RMB, representing year-on-year growth of 10.0%/7.8%/7.6%. The net profit attributable to shareholders is expected to be 43/50/56 billion RMB, with growth rates of 5.6%/15.5%/12.6% [7][8]. Summary by Sections Market Data - As of May 22, 2024, the closing price is HKD 29.05, with a total market capitalization of HKD 932.62 billion and total shares outstanding of 3.21 billion [5]. Financial Performance - For Q1 2024, the company achieved revenue of 5.28 billion RMB, a year-on-year increase of 17.8%. The revenue breakdown includes domestic self-operated, domestic franchised, overseas self-operated, and overseas franchised revenues of 2.11, 2.04, 0.99, and 0.0021 billion RMB, respectively, with growth rates of 4.6%, 32.9%, 15.6%, and 16.7% [7]. - Adjusted EBITDA for Q1 2024 was 1.42 billion RMB, up 37.8%, with an adjusted EBITDA margin of 26.9%, an increase of 3.9 percentage points year-on-year [7]. RevPAR and Operational Metrics - The company's domestic RevPAR, ADR, and OCC for Q1 2024 were 216 RMB, 280 RMB, and 77.2%, reflecting year-on-year growth of 3.1%, 1.0%, and 1.6 percentage points, respectively. The overseas metrics were 58 EUR, 104 EUR, and 55.8%, with year-on-year growth of 4.5%, 0.2%, and 2.3 percentage points [7]. Store Expansion - In Q1 2024, the company opened 569 new stores domestically, a significant increase from 262 in the same period last year. The total number of stores reached 9,817, with plans to open 1,800 new stores in 2024 [7]. B2B Business Development - The company has actively expanded its corporate travel business, with a 34% year-on-year increase in contracted room nights and a 57% growth in active corporate users, reaching 2,700 [7].

Investment Rating - The report maintains an "Accumulate" rating for Huazhu Group-S (1179.HK) with a market price of HKD 30.7 [1]. Core Views - Huazhu's Q1 performance slightly exceeded expectations, benefiting from improvements in product strength due to direct store renovations and enhanced revenue management capabilities. The company continues to lead its competitors in management and product selection, resulting in a sustained increase in market share. The current valuation does not fully reflect the company's intrinsic value [5]. - The profit forecast for Huazhu has been raised, maintaining the "Accumulate" rating. In Q1 2024, despite the industry facing growth pressures from high base effects, Huazhu's core operating metrics showed steady growth. The company is expected to achieve or exceed its performance targets, leading to an upward revision of net profit forecasts for 2024-2025 [5]. Financial Performance Summary - For Q1 2024, Huazhu reported revenue of CNY 5.28 billion, a year-on-year increase of 17.8%. The net profit attributable to shareholders was CNY 660 million, a decrease of 33.4% compared to Q1 2023 [5]. - The domestic hotel segment (Legacy-Huazhu) generated revenue of CNY 4.23 billion, up 17.6% year-on-year, with a net profit of approximately CNY 830 million, down 30.6% [5]. - The overseas hotel segment (Legacy-DH) reported revenue of CNY 1.03 billion, a year-on-year increase of 16.6%, with a net loss of CNY 170 million [5]. Growth and Expansion - The company opened 569 new stores and closed 148 in Q1 2024, resulting in a net increase of 421 stores. The number of signed contracts reached 647, with a pipeline of 3,138 hotels awaiting opening [6]. - Huazhu's RevPAR (Revenue per Available Room) increased by 3.1% year-on-year in Q1 2024, with direct stores showing an 8.8% increase [5][6].

Investment Rating - The investment rating for the company is "Buy" [2][10] - The current market price is 30.7 HKD [2] Core Views - The company benefits from the enhancement of product capabilities due to the renovation of direct-operated stores and improved revenue management capabilities, leading to slightly better-than-expected performance in Q1 [6] - The company is expected to maintain a leading position in management and product iteration, which will continue to enhance its market share [6] - The profit forecast for 2024-2025 has been raised, with expected net profits of 42.3 billion and 50.5 billion respectively [6] Financial Performance Summary - Revenue for 2022 was 13,862 million, with a projected increase to 21,882 million in 2023, and further growth to 24,282 million in 2024 [3] - The net profit for 2022 was -1,821 million, expected to turn positive with 4,085 million in 2023 and 4,234 million in 2024 [3] - The company’s earnings per share (EPS) is projected to improve from -0.58 in 2023 to 1.31 in 2024 [3] - The return on equity (ROE) is expected to rise from -18.5% in 2022 to 39.2% in 2023 [3] Operational Highlights - In Q1 2024, the company opened 569 new stores and closed 148, resulting in a net increase of 421 stores [7] - The domestic hotel segment reported revenue of 42.3 billion, a year-on-year increase of 17.6% [6] - The overall RevPAR (Revenue per Available Room) increased by 3.1% in Q1 2024, with direct-operated stores showing an 8.8% increase [6]