JINJIANG HOTELS(SH:600754) Changjiang Securities·2024-07-17 00:01Investment Rating - The report maintains a "Buy" rating for the company [6][7]. Core Views - The company is expected to achieve a net profit attributable to shareholders of 800 to 850 million yuan in H1 2024, representing a year-on-year increase of 50.22% to 59.61%. The net profit after deducting non-recurring items is projected to be between 370 to 400 million yuan, with a year-on-year change of -0.94% to +7.10% [2][5]. - For Q2 2024, the net profit attributable to shareholders is anticipated to be between 610 to 660 million yuan, reflecting a year-on-year increase of 55.22% to 67.94% [5]. - The company has streamlined its organizational structure in China, reducing management levels from seven to four, which is expected to enhance management efficiency and responsiveness to market trends [6]. - The company aims to open 1,200 new hotels and sign 2,500 new contracts throughout the year, while also focusing on upgrading older properties and optimizing its brand matrix [5][6]. - The long-term profit forecasts for 2024, 2025, and 2026 are 1.303 billion, 1.591 billion, and 1.811 billion yuan, respectively, with corresponding price-to-earnings ratios of 19, 15, and 14 times [6][7]. Summary by Sections Financial Performance - The company expects a significant increase in net profit for H1 2024, with projections of 800 to 850 million yuan, which is a substantial improvement compared to the previous year [2][5]. - The anticipated net profit for Q2 2024 is also promising, with estimates ranging from 610 to 660 million yuan [5]. Strategic Developments - The company has implemented a light asset development strategy, including the sale of its 100% stake in a hotel management company for 1.655 billion yuan, which will enhance its resource allocation and profitability [5]. - The organizational restructuring aims to improve operational efficiency and market responsiveness, particularly during the peak summer season [6]. Growth Initiatives - The company plans to continue its aggressive expansion strategy by opening 1,200 new hotels and signing 2,500 contracts, while also focusing on brand optimization and property upgrades [5][6]. - The adjustment of the brand matrix will reduce the number of brands from over 40 to 15, enhancing focus on core brands and improving overall operational efficiency [5].