Investment Rating - Maintain "Buy" rating for Huazhu Group-S (1179 HK) [1] Core Views - Huazhu Group demonstrated resilience in Q2 2024 with revenue of RMB 6 15 billion (+11 2% YoY) and net profit attributable to shareholders of RMB 1 067 billion (+5% YoY) [1] - The company achieved a milestone of 10 286 global hotels with 10 150 under the Huazhu brand including 9 558 franchised hotels [1] - Huazhu Group announced a 3-year shareholder return plan including up to 1 billion share repurchase program [1] Financial Performance - Q2 2024 revenue reached RMB 6 15 billion (+11 2% YoY) at the upper end of guidance [1] - Net profit attributable to shareholders was RMB 1 067 billion (+5% YoY) [1] - EBITDA reached RMB 1 9 billion with adjusted EBITDA of RMB 2 billion (+11% YoY) [1] - Huazhu brand contributed RMB 1 033 billion in net profit (+4% YoY) while DH segment contributed RMB 34 million (+54 5% YoY) [1] Expansion and Market Position - Total hotels reached 10 286 globally with 10 150 under Huazhu brand [1] - 567 new hotels opened in Q2 with net openings of 466 [1] - Pipeline hotels increased to 3 258 [1] - Full-year new hotel opening target raised from 1 800 to 2 200 [1] Operational Metrics - Huazhu brand RevPAR was RMB 244 (-2% YoY) with OCC of 82 6% (+0 7pct YoY) and ADR of RMB 296 (-2 9% YoY) [1] - DH brand RevPAR was €82 (+4 5% YoY) with ADR of €120 (+2 7% YoY) and OCC of 68 3% (+1 2pct YoY) [1] - Q3 2024 revenue growth guidance of 2-5% [1] Shareholder Returns - 3-year shareholder return plan announced with up to 1 billion share repurchase program approved effective August 21 2024 [1] Financial Forecasts - 2024-2026 revenue forecast at RMB 23 396 million RMB 24 774 million and RMB 25 953 million respectively [2] - 2024-2026 net profit forecast at RMB 4 165 million RMB 4 438 million and RMB 4 711 million respectively [2] - 2024-2026 EPS forecast at RMB 1 30 RMB 1 38 and RMB 1 47 respectively [2] - 2024-2026 PE ratios forecast at 16x 15x and 14x respectively [2] Valuation Metrics - Current price: HK$22 65 [2] - 2024-2026 PB ratios forecast at 4 1x 3 2x and 2 6x respectively [2] - 2024-2026 EV/EBITDA ratios forecast at 11 46x 10 79x and 10 19x respectively [6]
华住集团-S：2024年二季报点评：逆势扩张彰显优势，着力提升股东回报