Investment Rating - The report maintains a "Buy" rating for Huazhu Group-S (01179 HK) and Huazhu (HTHT O) [4] Core Views - Huazhu Group reported strong Q2 2024 results with revenue of 6 15 billion CNY (+11 2% YoY) and adjusted net profit of 1 25 billion CNY (+16 9% YoY) [1] - Domestic occupancy rate (Occ) outperformed ADR while international markets saw growth in both volume and price [1] - Operational efficiency improved with reductions in rent depreciation and consumables costs [1] - The company achieved a milestone of 10 000 domestic hotels and raised its full-year store opening guidance from 1 800 to 2 200+ [1] Financial Performance - Q2 2024 domestic RevPAR was 244 CNY (-2% YoY) with ADR at 296 CNY (-3% YoY) and Occ at 82 6% (+1pp YoY) [1] - International RevPAR grew 5% YoY to 82 EUR with ADR at 120 EUR (+3% YoY) and Occ at 68 3% (+1pp YoY) [1] - H1 2024 revenue reached 11 43 billion CNY (+14 1% YoY) with adjusted net profit of 2 03 billion CNY (+39 0% YoY) [1] Store Expansion - Q2 2024 saw a net increase of 466 domestic hotels (567 new openings) bringing the total to 10 150 [1] - The pipeline of hotels under development increased to 3 294 (3 266 domestic) up by 156 from Q1 2024 [1] - H1 2024 saw 1 136 new openings with 1 064 remaining to meet the revised full-year target [1] Valuation and Forecast - The report forecasts 2024-2026 net profits of 4 2/4 8/5 4 billion CNY respectively [2] - A 24x PE valuation for 2024 implies a fair value of 35 29 HKD/share for HK-listed shares and 45 38 USD/ADS for US-listed shares [2] Financial Ratios - 2024E revenue growth is projected at 10 7% with EBITDA of 7 287 million CNY [3] - ROE is expected to be 25 6% in 2024E declining to 19 9% by 2026E [3] - Net profit margin is forecasted at 17 5% in 2024E increasing to 18 8% by 2026E [3]
华住集团-S：主业增长强劲，上调开店指引