Atour Lifestyle Shares Up After Guidance Raise

Core Viewpoint - Atour Lifestyle Holdings Ltd. expects a significant revenue growth of 35% for 2025, an increase from the earlier forecast of 25%, driven primarily by its retail business performance [2][4]. Financial Performance - In the third quarter, Atour reported a revenue growth of 38.4% year-on-year, reaching 2.63 billion yuan ($372 million), which is an improvement from the previous two quarters [10]. - The company's retail business revenue surged by 76.4% to 846.3 million yuan, while revenue from the core hotel business grew by 25.5% to 1.72 billion yuan [11]. - Atour's profit increased by 24.6% year-on-year to 474 million yuan, with the slower growth attributed to higher tax expenses [15]. Business Strategy - The retail segment has become a crucial part of Atour's growth strategy, now accounting for nearly one-third of total revenue, up from a quarter a year earlier [11]. - Atour opened 152 new hotels in the third quarter, bringing the total to 1,948, and aims to operate 2,119 hotels by the end of 2025 [9]. Market Context - The hotel sector is experiencing a moderate recovery, although the overall market is characterized by uneven recovery across regions [7]. - Despite a decline in revenue per available room (revpar), Atour's revpar decline has moderated, falling by 2.4% year-on-year to 371 yuan in the third quarter [6]. Investor Sentiment - Following the positive financial report, Atour's stock rose by 8.5% over five trading days, with all 19 analysts rating the stock as either "buy" or "strong buy" [5]. - Atour's shares trade at a forward P/E ratio of 20, which is lower compared to its competitor H World Group, which has a P/E ratio of 35 [16].