Core Viewpoint - Atour Lifestyle Holdings Limited will report its unaudited financial results for Q4 and full year 2024 on March 25, 2025, before U.S. markets open [1]. Group 1: Financial Reporting - The financial results announcement will take place on March 25, 2025, before the U.S. markets open [1]. - A conference call will be hosted at 7:00 AM U.S. Eastern time on the same day [1]. Group 2: Conference Call Details - A live webcast of the conference call will be available on the Company's investor relations website [2]. - Participants can pre-register for the conference call via a provided link to receive dial-in numbers and a personal PIN [2]. Group 3: Company Overview - Atour Lifestyle Holdings Limited is a leading hospitality and lifestyle company in China, recognized for its distinct portfolio of lifestyle hotel brands [3]. - The company is the leading upper midscale hotel chain in China and the first Chinese hotel chain to develop scenario-based retail business [3]. - Atour is focused on innovation within China's hospitality industry and aims to build new lifestyle brands around hotel offerings [3].

Investment Rating - The report initiates coverage with an "Outperform" rating for the company [5][6]. Core Insights - The company is positioned as the No. 1 domestic mid-to-high-end hotel brand, creating a new growth paradigm of "accommodation + retail" [2][19]. - The company has demonstrated strong growth in both hotel operations and retail segments, with a significant increase in revenue and adjusted earnings [4][40]. - The report highlights the potential for brand concentration and structural improvement in the domestic mid-to-high-end hotel market, drawing parallels with the U.S. market [3][44]. Summary by Sections Company Overview - Founded in 2013, the company has rapidly established itself as a leader in the domestic mid-to-high-end hotel sector by focusing on differentiated positioning and user experience [19][24]. - The company has expanded its hotel portfolio to 1,210 locations by 2023, with a revenue CAGR of 30.3% from 2019 to 2023 [2][34]. Growth Analysis - The report anticipates a stable RevPAR for the hotel industry in 2025, with a slight decline expected for the company’s overall RevPAR in the coming years [3][38]. - The company is projected to achieve a hotel store CAGR of 25-30% from 2024 to 2026, driven by ongoing expansion efforts [3][34]. Retail Segment - The retail business is expected to generate significant revenue growth, with projections of 20 billion RMB+ in retail income by 2024, reflecting a CAGR of 110-130% from 2020 to 2024 [4][39]. - Retail revenue accounted for 21% of total income in 2023, with expectations to rise to approximately 29% in 2024 [4][39]. Financial Projections - The company’s revenue is forecasted to reach 69.7 billion RMB in 2024, with a year-on-year growth of 49.3% [5][8]. - Adjusted net profit is expected to grow to 12.9 billion RMB by 2024, reflecting a 42.5% increase [5][8]. Valuation - The report estimates a reasonable market value range for the company between 316.6 billion RMB and 339.2 billion RMB, indicating a potential upside of 22-31% from the current price [5][6].

Group 1: Company Performance - Atour Lifestyle Holdings Limited Sponsored ADR (ATAT) has gained approximately 67.6% year-to-date, outperforming the Consumer Discretionary sector, which has returned an average of 13.9% [1] - Fox Corporation (FOX) has also shown strong performance with a year-to-date return of 70.5% [1] - ATAT is performing better than the Leisure and Recreation Services industry, which has gained about 22.6% this year [3] Group 2: Industry Rankings - Atour Lifestyle Holdings Limited Sponsored ADR is part of the Consumer Discretionary sector, which ranks 6 in the Zacks Sector Rank [6] - The Leisure and Recreation Services industry, which includes ATAT, is currently ranked 29 in the Zacks Industry Rank [3] - Fox Corporation belongs to the Broadcast Radio and Television industry, which is ranked 73, with the industry moving up by 58.3% this year [4] Group 3: Earnings Estimates - The consensus EPS estimate for ATAT has increased by 1.6% over the past quarter, indicating improving analyst sentiment [8] - Fox Corporation's consensus EPS estimate for the current year has risen by 9.6% over the past three months [2] - Atour Lifestyle Holdings Limited Sponsored ADR currently holds a Zacks Rank of 1 (Strong Buy), suggesting strong potential for future performance [7]

Industry Overview - The Zacks Leisure and Recreation Services Industry is currently ranked in the top 7% out of 250 Zacks industries, indicating strong performance within the sector [1] Company: Atour Lifestyle Holdings (ATAT) - Atour Lifestyle Holdings operates the largest midscale hotel chain in China and is considered a strong investment opportunity [2] - In Q3, Atour reported earnings of $0.39 per share, a 44% increase from $0.27 in the same quarter last year [3] - Q3 sales reached $270.55 million, reflecting a 52% increase from $177.37 million a year ago, and Atour beat EPS and sales estimates by 2% [3] Company: Trip.com (TCOM) - Trip.com, based in Shanghai, is another notable player in the leisure and recreation services sector, offering comprehensive travel booking services [5] - In Q3, Trip.com reported earnings of $1.25 per share, exceeding expectations by 37%, compared to Zacks estimates of $0.91 [5] - Q3 sales were $2.26 billion, a 20% increase from the previous year, surpassing estimates of $2.19 billion [6] - Trip.com has seen a stock price increase of over 70% in 2024 and has surpassed earnings expectations for nine consecutive quarters [6] Earnings Estimate Trends - Both Atour and Trip.com are experiencing positive trends in earnings estimate revisions, suggesting continued strong performance [9]

Investment Rating - The report maintains a "Buy" rating for Atour Hotel (ATAT.US) with a target price of $34.8, representing a potential upside of 37.3% from the current stock price of $25.4 [2][6]. Core Insights - Atour Hotel continues to expand rapidly, focusing on high-end hotel brands, with a total of 1,533 stores as of Q3, including 12 self-operated stores and 1,504 franchise stores [2][6]. - The company reported Q3 revenue of 190 million yuan, a year-on-year decrease of 20.4%, but net profit exceeded Bloomberg consensus expectations, with a GAAP net profit of 38 million yuan, up 45.3% year-on-year [2][6]. - The company has a strong membership growth, with registered members reaching 83 million, a year-on-year increase of 53.7% [2][6]. Financial Overview - For FY24, the company expects revenue growth of 51.9% year-on-year, with projected revenues of 7.09 billion yuan, 8.86 billion yuan in FY25, and 10.57 billion yuan in FY26 [2][6]. - The adjusted net profit is forecasted to be 1.285 billion yuan in FY24, 1.591 billion yuan in FY25, and 1.991 billion yuan in FY26, reflecting significant growth rates [2][6]. - The report highlights a strong retail performance, with GMV reaching 566 million yuan in Q3, a year-on-year increase of 108% [2][6]. Store Expansion and Market Position - The company opened a record number of new stores in Q3, with 140 new openings and a total of 732 stores in the pipeline, indicating a robust expansion strategy [2][6]. - Atour Hotel's RevPAR (Revenue per Available Room) faced pressure due to high base effects from last year's summer travel boom, with a year-on-year decline of 10.5% [2][6]. - The company is enhancing its multi-brand matrix with the introduction of a new high-end service brand, aiming to improve its market share in the mid-range segment [2][6].

Core Insights - The article emphasizes a conservative yet opportunistic value investment approach, focusing on financial data to assess a company's health and using qualitative analysis for a comprehensive understanding of growth prospects [1]. Group 1 - The author has been investing since 2005 and has a strong preference for fact-driven analysis [1]. - Research is published on platforms like Seeking Alpha and FAST Graphs, indicating a commitment to sharing insights with a broader audience [1]. - Engagement with readers is encouraged, highlighting the importance of community interaction in investment discussions [1]. Group 2 - There is a potential interest in initiating a long position in ATAT within the next 72 hours, suggesting a strategic move based on current market conditions [2]. - The article expresses personal opinions and does not involve compensation from companies mentioned, ensuring an unbiased perspective [2]. - No existing stock or derivative positions are held in the companies discussed, which may indicate a fresh analysis rather than a pre-existing bias [2].

Financial Data and Key Metrics Changes - The company's net revenues for Q3 2024 grew by 46.7% year-over-year and 5.7% quarter-over-quarter, reaching RMB1,899 million, driven by growth in the manachised hotel and retail businesses [37][38] - Adjusted net income for Q3 2024 was RMB384 million, representing a 41.2% increase year-over-year, with an adjusted net profit margin of 20.2%, a decrease of 0.8 percentage points year-over-year [50] - Adjusted EBITDA for Q3 2024 was RMB532 million, up by 40% year-over-year, with an adjusted EBITDA margin of 28.0%, which decreased by 1.4 percentage points year-over-year [51] Business Line Data and Key Metrics Changes - Revenues from manachised hotels for Q3 2024 were RMB1,179 million, up by 51.0% year-over-year and 14.8% quarter-over-quarter, with RevPAR reaching RMB376 [38][39] - Revenues from leased hotels were RMB190 million, reflecting a 20.4% year-over-year decline, attributed to a decrease in the number of leased hotels [40] - Retail business revenues for Q3 2024 were RMB408 million, reflecting a 104% year-over-year increase, although there was a 10.6% quarter-over-quarter decline due to seasonality [41] Market Data and Key Metrics Changes - The total number of manachised hotels increased to 1,504 as of September 30, 2024, up by 39.3% year-over-year [39] - The number of hotels under development reached 732, indicating strong franchisee confidence and brand recognition [13] - The membership base exceeded 83 million, marking a 53.7% increase year-over-year [28] Company Strategy and Development Direction - The company aims to innovate and elevate hotel offerings while strengthening service advantages to enhance customer experience [8] - The strategy includes expanding the hotel network with a target of 2,000 premier hotels by next year, focusing on quality over quantity in new signings [68][76] - The launch of the upscale brand SAVHE Hotel aims to inject new vitality into the upscale hotel market in China, with a focus on quality and user experience [75][76] Management's Comments on Operating Environment and Future Outlook - Management noted steady growth in domestic travel demand and highlighted the resilience of the service consumption market [7] - The full-year RevPAR is expected to decline by a mid-to-high single-digit year-on-year, with revenue growth guidance maintained at 48% to 52% [60] - The retail business is projected to continue growing faster than the hotel business, with a focus on the sleep economy market [105] Other Important Information - The company has established over 1,500 Bambook libraries in more than 200 cities across China, promoting cultural exchange and community engagement [34] - The company is committed to maintaining a healthy cash position, with cash and cash equivalents totaling RMB2,741 million as of September 30, 2024 [52] Q&A Session Summary Question: Insights on Q3 and Q4 RevPAR performances and guidance - Management indicated that Q3 RevPAR was impacted by high base effects and external factors, but showed improvement in October, with expectations of a mid-to-high single-digit decline for full-year RevPAR [57][59] Question: Guidance on hotel openings and new signings - The company raised its full-year new openings guidance from 400 to 450 hotels, citing strong franchisee confidence despite RevPAR fluctuations [65][66] Question: Details on the new upscale brand SAVHE - SAVHE is positioned as a premium-end hotel with a RevPAR target of RMB550 to RMB650, with a focus on quality and long-term growth in the upscale segment [77][78] Question: Updates on Atour 4.0 and Atour Light 3.0 - Atour 4.0 has six hotels in operation with plans to exceed ten by year-end, while Atour Light 3.0 signed 38 new projects in Q3, expected to exceed 100 hotels in operation by year-end [84][85] Question: Plans for hotel closures and leased hotels - The company expects to close around 50 hotels this year based on quality evaluations, with a focus on maintaining high standards [94][95] Question: Growth potential in the retail business - Management sees significant growth potential in the sleep economy market, maintaining a revenue growth forecast of doubling year-on-year for the retail segment [105]

Core Viewpoint - Atour Lifestyle Holdings Limited Sponsored ADR (ATAT) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based on the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years [2]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, making the Zacks rating system valuable for investors [3][5]. Impact of Institutional Investors - Institutional investors utilize earnings estimates to calculate the fair value of a company's shares, leading to stock price movements based on their buying or selling activities [5]. Business Improvement Indicators - The rising earnings estimates and the Zacks rating upgrade for Atour Lifestyle Holdings Limited indicate an improvement in the company's underlying business, suggesting that investors may push the stock price higher [6]. Earnings Estimate Revisions - For the fiscal year ending December 2024, Atour Lifestyle Holdings Limited is expected to earn $1.23 per share, reflecting a 33.7% increase from the previous year [9]. - Over the past three months, the Zacks Consensus Estimate for the company has increased by 11.9% [9]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [8]. - The upgrade to Zacks Rank 2 positions Atour Lifestyle Holdings Limited in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [12].

Group 1 - Atour Lifestyle Holdings Limited Sponsored ADR (ATAT) is a notable stock in the Consumer Discretionary sector, currently outperforming its peers with a year-to-date gain of approximately 48.7% compared to the sector average of 12.7% [4] - The Zacks Rank for ATAT is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - The Zacks Consensus Estimate for ATAT's full-year earnings has increased by 11.9% over the past quarter, reflecting improved analyst sentiment [4] Group 2 - ATAT belongs to the Leisure and Recreation Services industry, which has 31 individual stocks and is currently ranked 22 in the Zacks Industry Rank, with an average gain of 20.1% this year [6] - In contrast, Kontoor Brands (KTB), another Consumer Discretionary stock, has returned 40.3% year-to-date but belongs to the Textile - Apparel industry, which is ranked 68 and has declined by 17.3% this year [5][7]

Investment Rating - The report maintains a "Buy" rating for Atour Group (ATAT.US) and raises the target price to $31.5, indicating a potential upside of 23.0% from the current price of $25.6 [4][9][22]. Core Insights - Atour Group's revenue for Q3 2024 reached RMB 1.899 billion, a year-on-year increase of 46.7%, exceeding expectations. The growth was driven by rapid store expansion and strong performance in retail business, particularly the Atour Planet brand, which saw a 104% increase in revenue [1][2]. - The company has net opened 140 new stores in Q3 2024, setting a new record for quarterly openings, and has raised its full-year store opening target to 450 [1][3]. - Despite a decline in RevPAR (Revenue per Available Room) of 10.5% in Q3 2024 due to high base effects and adverse weather, the report anticipates a narrowing of this decline in Q4 2024 [2][3]. Summary by Sections Financial Performance - Q3 2024 revenue was RMB 1.899 billion, with a 46.7% year-on-year growth. Franchise hotel revenue was RMB 1.179 billion, up 51%, while retail revenue reached RMB 480 million, growing 104% [1][15]. - The net profit attributable to shareholders for Q3 2024 was RMB 380 million, a 47.3% increase year-on-year [1][9]. Store Expansion - The company has net opened 360 new stores in 2024, with a target of 450 for the year. Management is confident in reaching 2,000 stores by 2025 [1][3]. Revenue Projections - The report projects that Atour Group's full-year revenue target for 2024, which is set to grow by 48%-52%, is likely to be exceeded due to strong performance in both accommodation and retail segments [3][9]. Profitability Metrics - The overall gross margin for Q3 2024 was 41.5%, with a slight decline attributed to increased sales expenses [9][10]. - The report has adjusted profit forecasts upward for 2024-2026 based on better-than-expected performance and accelerated store expansion [9][10].