Core Viewpoint - H World Group Limited (HTHT) is set to report its fourth-quarter 2024 results on March 20, with expectations of mixed performance due to various market factors [1]. Financial Performance - The Zacks Consensus Estimate for HTHT's earnings is 27 cents, reflecting an 18.2% decline from the previous year's actual earnings [3]. - Revenue expectations are pegged at $798.2 million, indicating a 1.6% increase from the year-ago figure [3]. - The company missed the Zacks Consensus Estimate by 11.6% in the last reported quarter [2]. Revenue Drivers - Fourth-quarter revenues are anticipated to increase year over year, driven by steady growth in domestic travel demand and ongoing expansion efforts [4]. - The company expects revenue growth of 1-5% year over year for the fourth quarter, supported by strong occupancy rates and brand recognition [5]. Challenges - Revenue per available room (RevPAR) and average daily rate (ADR) pressures are expected to negatively impact the top line, with a mid-single-digit year-over-year decline in RevPAR anticipated [6]. - The planned closure of leased and owned hotels as part of an asset-light strategy may also affect revenues [6]. - Rising operating costs, particularly in personnel and marketing, are likely to hurt the bottom line [7]. Earnings Prediction - The current model does not predict an earnings beat for HTHT, with an Earnings ESP of 0.00% and a Zacks Rank of 2 (Buy) [8][9].

Core Viewpoint - H World Group Limited, a significant player in the global hotel industry, is set to release its unaudited financial results for Q4 and the full year of 2024 on March 20, 2025, after Hong Kong trading hours and before the U.S. market opens [1]. Company Overview - H World Group Limited operates 10,845 hotels with a total of 1,062,546 rooms across 18 countries as of September 30, 2024 [5]. - The company’s hotel 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 [5]. - 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 [5]. Business Model - H World employs a mix of leased and owned, manachised, and franchised hotel models [6]. - As of September 30, 2024, 9% of hotel rooms were operated under the lease and ownership model, while 91% were under the manachise and franchise models [6].

Investment Rating - Maintain "Buy" rating for the company [2][4] Core Views - The company maintains a positive store expansion pace, focusing on mid-to-high-end brands, increasing penetration in lower-tier cities, and enhancing business travel cooperation and member loyalty [4] - Domestic RevPAR is under pressure due to a high base effect from the previous year, with OCC showing resilience but ADR declining significantly [4] - The company expects 2024E/2025E/2026E revenues of 23.7/25.8/28.0 billion RMB, with YoY growth of 8.2%/9.1%/8.3%, and net profits of 3.7/4.4/4.8 billion RMB, with YoY changes of -9.3%/+17.4%/+11.2% [4] - The current stock price corresponds to 2024E/2025E/2026E P/E ratios of 19/16/15x [4] Financial Performance - 2024Q3 revenue reached 6.44 billion RMB, up 2.4% YoY, with domestic self-operated, domestic franchised, overseas self-operated, and overseas franchised revenues at 2.461, 2.568, 1.229, and 0.034 billion RMB, respectively [4] - Adjusted EBITDA for 2024Q3 was 2.11 billion RMB, down 9.5% YoY, with domestic and overseas segments contributing 2.09 and 0.02 billion RMB, respectively [4] - Adjusted EBITDA margin was 32.8%, down 4.3 ppts YoY and 0.4 ppts QoQ [4] - Adjusted net profit was 1.37 billion RMB, down 10.8% YoY [4] Operational Metrics - Domestic RevPAR, ADR, and OCC for 2024Q3 were 256 RMB, 301 RMB, and 84.9%, down 8.1%, 7.0%, and 1.0 ppts YoY, respectively [4] - Overseas RevPAR, ADR, and OCC for 2024Q3 were 82 EUR, 117 EUR, and 69.8%, up 3.7%, 2.5%, and 0.8 ppts YoY, respectively [4] - The company opened 790 new domestic stores in 2024Q3, with the full-year store opening guidance raised from 2,200 to 2,400 stores [4] - Total store count reached 10,845 by the end of 2024Q3, with over 800 new contracts signed during the quarter [4] Financial Projections - 2024E/2025E/2026E revenues are projected at 23.7/25.8/28.0 billion RMB, with YoY growth of 8.2%/9.1%/8.3% [5] - 2024E/2025E/2026E net profits are projected at 3.7/4.4/4.8 billion RMB, with YoY changes of -9.3%/+17.4%/+11.2% [5] - 2024E/2025E/2026E EBITDA is projected at 6.78/7.51/8.17 billion RMB, with YoY changes of -0.8%/+10.8%/+8.7% [5] - 2024E/2025E/2026E EPS is projected at 1.16/1.37/1.52 RMB [5]

Investment Rating - Buy (Maintained) [7] Core Views - The company's Q3 2024 performance was largely in line with expectations, with revenue reaching RMB 6.442 billion, a YoY increase of 2.45%, within the guidance range of 2%-5% [2] - Domestic RevPAR declined due to a high base effect, with ADR having a greater impact, while overseas operational indicators remained stable [3] - The company continues to expand its hotel network and upgrade its products, raising its full-year store opening guidance to 2,400 stores (previously 2,200 stores) [4] - Operating costs and expenses increased YoY due to business expansion, but the company's performance remained largely in line with expectations [5] - The company emphasized its dividend and share repurchase plans to enhance shareholder returns, including a USD 1 billion share repurchase plan over five years [6] Financial Performance - Q3 2024 revenue: RMB 6.442 billion, up 2.45% YoY, with domestic revenue at RMB 5.162 billion (up 0.96% YoY) and overseas revenue at RMB 1.280 billion (up 8.94% YoY) [2] - Q3 2024 net profit attributable to shareholders: RMB 1.273 billion, down 4.79% YoY [2] - Domestic RevPAR: RMB 256, down 8.1% YoY, with ADR at RMB 301, down 7.0% YoY [3] - Overseas RevPAR: EUR 82, up 3.7% YoY, with ADR at EUR 117, up 2.5% YoY [3] Expansion and Operations - Q3 2024 domestic store openings: 774 new stores (3 directly operated, 771 franchised), with a net increase of 557 stores [4] - Pipeline: 2,899 stores in the domestic market, with 1,082 economy and 1,817 mid-to-high-end hotels [4] - The company is accelerating its store expansion, with a focus on upgrading its product offerings and optimizing its brand portfolio [4] Shareholder Returns - The company announced a 3-year shareholder return plan, including a maximum distribution of USD 2 billion and a USD 1 billion share repurchase plan over five years [6] - In the first three quarters of 2024, the company repurchased approximately USD 270 million worth of shares and returned approximately USD 470 million to shareholders through dividends and share repurchases [6] Future Outlook - The company expects Q4 2024 revenue growth of 1%-5% (excluding DH growth) [12] - Forecasted revenue for 2024-2026: RMB 23.774 billion, RMB 25.455 billion, and RMB 27.561 billion, with YoY growth rates of 8.6%, 7.1%, and 8.3%, respectively [12] - Forecasted net profit attributable to shareholders for 2024-2026: RMB 3.839 billion, RMB 4.524 billion, and RMB 5.134 billion, with YoY growth rates of -5.9%, 17.8%, and 13.5%, respectively [12] Financial Ratios - 2024E P/E: 20.1x, 2025E P/E: 17.1x, 2026E P/E: 15.0x [12] - 2024E P/B: 4.6x, 2025E P/B: 3.6x, 2026E P/B: 2.9x [13]

Group 1 - The core thesis for H World Group (NASDAQ: HTHT) is based on the robust domestic travel demand in China, positioning the company well to capture this opportunity [1] - The investment strategy focuses on identifying undervalued companies with long-term growth potential, emphasizing a blend of value investing principles and long-term growth [1] - The approach involves purchasing quality companies at a discount to their intrinsic value and holding them to allow for compounding of earnings and shareholder returns [1]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong performance expectation relative to the market [7][10]. Core Insights - The company reported Q3 2024 earnings that met expectations, with a revenue of 6.4 billion yuan, reflecting a year-on-year increase of 2.4% [7]. - The company is actively expanding its hotel network while maintaining stable occupancy rates, with a domestic hotel RevPAR of 256 yuan, down 8.1% year-on-year [8]. - The company continues to penetrate lower-tier cities and has launched a new series of mid-to-high-end hotels, with a total of 10,845 operating hotels and a room count of 1.06 million [9]. - The company’s membership base has grown to 257 million, with a direct booking ratio of 64.2%, indicating increased customer loyalty [10]. - Future profit forecasts remain stable, with expected net profits of 4.087 billion, 4.555 billion, and 4.875 billion yuan for 2024, 2025, and 2026 respectively [10]. Financial Data and Earnings Forecast - Revenue projections show a steady increase from 23.347 billion yuan in 2023E to 26.345 billion yuan in 2025E, with a compound annual growth rate [6]. - The company’s gross margin is expected to stabilize around 34-35% from 2024E onwards [6][10]. - The net profit attributable to the parent company is projected to grow from 4.087 billion yuan in 2024E to 4.875 billion yuan in 2026E [10].

Investment Rating - The report maintains a "Buy" rating for Huazhu Group-S (01179 HK) and Huazhu (HTHT O) with a target price of HKD 36 01 per share for the Hong Kong-listed stock and USD 46 28 per ADS for the US-listed stock [5] Core Views - Huazhu Group reported Q3 2024 revenue of RMB 6 44 billion (+2 4% YoY) at the lower end of the guidance range Net profit attributable to shareholders was RMB 1 27 billion (-4 8% YoY) while adjusted net profit was RMB 1 37 billion (-10 8% YoY) [1] - For the first three quarters of 2024 the company achieved revenue of RMB 17 87 billion (+9 6% YoY) and net profit attributable to shareholders of RMB 3 00 billion (-10 3% YoY) Adjusted net profit for the period was RMB 3 40 billion (+13 4% YoY) [1] - Domestic RevPAR ADR and occupancy rates in Q3 2024 were RMB 256 (-8 1% YoY) RMB 301 (-7 0% YoY) and 84 9% (-1 0 pct YoY) respectively International RevPAR ADR and occupancy rates were EUR 82 (+3 7% YoY) EUR 117 (+2 5% YoY) and 69 8% (+0 8 pct YoY) respectively [1] - The company accelerated its domestic hotel openings with 774 new hotels in Q3 2024 (a record high) and a net increase of 557 hotels bringing the total domestic hotel count to 10 707 By the end of Q3 2024 the company had opened 1 910 hotels domestically achieving 87% of its annual target of 2 200+ hotels [1] Financial Performance - Operating costs increased to 59 0% (+1 5 pct YoY) in Q3 2024 mainly due to rising labor costs (21 3% +2 4 pct YoY) Sales expenses were 4 7% (+0 1 pct YoY) and management expenses were 10 4% (+1 9 pct YoY) Net profit margin attributable to shareholders was 19 8% (-1 5 pct YoY) while adjusted net profit margin was 21 3% (-3 2 pct YoY) [2] - Revenue growth guidance for Q4 2024 is 1%-5% (regardless of DH inclusion) The report forecasts net profit attributable to shareholders of RMB 3 7 billion RMB 4 5 billion and RMB 5 0 billion for 2024 2025 and 2026 respectively [2] Growth and Profitability - Revenue growth is projected at 7 9% 6 7% and 5 8% for 2024 2025 and 2026 respectively [3] - Net profit attributable to shareholders is expected to grow by 21 6% and 12 2% in 2025 and 2026 respectively [3] - ROE is forecasted at 23 1% 21 8% and 19 5% for 2024 2025 and 2026 respectively [3] Valuation - The report values Huazhu Group at 24x PE for 2025 corresponding to a fair value of HKD 36 01 per share for the Hong Kong-listed stock and USD 46 28 per ADS for the US-listed stock [2]

以下文章来源于明亮公司 ，作者主编24小时在线 明亮公司 . 追踪新商业、好公司，提供一手情报与领先认知。 作者：Latte 出品：明亮公司 近日，「明亮公司」从一位接近华住集团（HTHT.US；1179.HK）海外团队的知情人士处获悉，华 住国际正计划在中东地区规模性拓店。 据该人士透露，目前华住计划在中东布局数百家酒店。这一数据尚未得到华住集团确认。不过，11 月26日集团公布Q3业绩时，华住首席执行官金辉曾提及，境外业务方面将继续专注于降低欧洲业务 成本， 同时在亚太及中东地区寻找增长机遇 。 早在今年3月份的Q1业绩会中，金辉亦曾透露， 2024年集团将继续推进海外的轻资产转型并特别关 注亚太及中东地区的增量机会 。 整体海外酒店数量方面，据华住Q3公布的数据，截至三季度末，集团在营酒店数量为10845家，其中 中国在营酒店数量为10707家。由此推算， 其海外在营酒店数量截至今年三季度末约为138家。待开 业酒店26家 。 谈及此次规模性拓店的品牌构成时，该人士对「明亮公司」表示，华住或将以全季为主，同时采取多 品牌同时推进的策略，"比如桔子水晶以及一些高端品牌等。" 全季作为华住集团成熟品牌的代表 ...

Investment Rating - Maintains a "Buy" rating for Huazhu Group (1179 HK/HTHT US) with an upward revision of the target price to HKD 32.9 for HK shares and USD 41.1 for US shares [2][3] Core Views - Huazhu Group's 3Q24 revenue reached RMB 6.4 billion, a YoY increase of 2.4%, with domestic revenue growing 1% and overseas revenue growing 8.9% [2] - Net profit attributable to shareholders in 3Q24 was RMB 1.27 billion, a YoY decline of 4.8%, impacted by one-off factors [2] - The company opened 790 new stores in 3Q24, setting a new quarterly record, with 774 net new stores in China and 16 overseas [2] - Domestic RevPAR in 3Q24 was RMB 256, a YoY decline of 8.1%, primarily due to high base effects from the previous year and adverse weather conditions [2] - Overseas business restructuring is expected to drive long-term high-quality growth, with one-time restructuring costs of RMB 81 million in 3Q24 [2] Financial Performance and Forecasts - Revenue for 2024E is projected at RMB 23.6 billion, with a YoY growth of 7.8%, while net profit attributable to shareholders is expected to be RMB 3.525 billion, a YoY decline of 13.7% [4] - Gross margin for 2024E is forecasted at 35.7%, with operating margin at 19.7% [4] - The company's PE ratio for 2024E is estimated at 22.1x for US shares and 22.0x for HK shares [4] Operational Metrics - Domestic ADR in 3Q24 was RMB 301, a YoY decline of 7%, while OCC remained relatively stable at 84.9%, down 1ppt YoY [15] - Overseas ADR in 3Q24 was USD 117, a YoY increase of 2.5%, with OCC at 69.8%, up 0.8ppt YoY [15] Market Valuation and Target Price - The target price for Huazhu Group's HK shares is set at HKD 32.9, representing a potential upside of 26.1% from the current price of HKD 26.1 [3] - The target price for Huazhu Group's US shares is set at USD 41.1, representing a potential upside of 24.2% from the current price of USD 33.1 [3] Industry Context - The hotel industry's valuation multiple has increased, leading to an upward revision of Huazhu Group's target price based on a 14x 2025E EV/EBITDA, a 20% discount compared to the average of international hotel groups [2]

Investment Rating - The report maintains a "Buy" rating for the company [1][16]. Core Views - The company reported Q3 2024 earnings with revenue of 6.44 billion CNY, a 2.4% increase year-on-year. Adjusted EBITDA was 2.13 billion CNY, down 2.7%, with an EBITDA margin of 33.0%, a decrease of 1.7 percentage points. Adjusted net profit was 1.37 billion CNY, down 10.8%, with an adjusted net profit margin of 21.3%, a decrease of 3.2 percentage points [1]. - Domestic RevPAR (Revenue per Available Room) for Q3 2024 was 256 CNY, down 8.1% year-on-year, while overseas RevPAR was 82 EUR, up 3.7% year-on-year. The report indicates that domestic revenue growth is slowing due to significant pressure on room rates [1]. - The company opened 790 new hotels in Q3, maintaining a high opening rate, and is on track to meet its annual target of 2,200 new openings [1]. Summary by Sections Financial Performance - Q3 2024 revenue was 6.44 billion CNY, with a growth rate of 2.4%. Adjusted net profit was 1.37 billion CNY, down 10.8% year-on-year. The adjusted EBITDA margin was 33.0% [1][4]. - The company expects Q4 2024 revenue growth of 1% to 5%, with RevPAR pressure expected to ease due to a high base effect and slowing industry supply growth [1]. Operational Metrics - Domestic RevPAR decreased by 8.1% to 256 CNY, with occupancy down 1.0 percentage points and ADR (Average Daily Rate) down 7.0%. In contrast, overseas RevPAR increased by 3.7% to 82 EUR [1]. - The company reported a significant increase in costs, particularly in labor, due to network expansion, with hotel operating costs at 59.0%, up 1.5 percentage points [1]. Future Outlook - The report projects adjusted net profits for 2024 to 2026 at 3.92 billion CNY, 4.47 billion CNY, and 5.06 billion CNY, respectively, with corresponding P/E ratios of 20.2, 17.7, and 15.6 [1][4]. - The company is focused on high-quality development and expanding its mid-to-high-end market presence while maintaining a strong growth trajectory in new hotel openings [1].