JINJIANG HOTELS(SH:600754) Soochow Securities·2024-09-01 01:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 6.89 billion yuan for the first half of 2024, a year-on-year increase of 0.2%, and a net profit attributable to shareholders of 850 million yuan, a year-on-year increase of 59.2% [3] - The second quarter performance was at the upper end of the forecast range, with a revenue of 3.69 billion yuan, down 5% year-on-year, and a net profit of 660 million yuan, up 68% year-on-year [3] - The company is accelerating its net store openings, with a total of 12,938 hotels as of the end of Q2, an increase of 8% year-on-year [3] Financial Performance Summary - Total revenue (in million yuan) for 2022A was 11,310, for 2023A was 14,649, and is expected to be 14,716 in 2024E, with a year-on-year growth of 0.45% [2] - Net profit attributable to shareholders (in million yuan) for 2022A was 126.62, for 2023A was 1,001.75, and is expected to be 1,452.48 in 2024E, reflecting a year-on-year growth of 44.99% [2] - The latest diluted EPS (in yuan/share) is projected to be 1.36 for 2024E, with a P/E ratio of 17.78 [2] Operational Highlights - The company opened 680 new stores in the first half of the year, with a target of 1,200 for the entire year [3] - The average RevPar for limited-service hotels in mainland China was 162 yuan, down 7% year-on-year, with an occupancy rate of 65.0% [3] - The company has implemented a stock incentive plan with performance targets for 2024-2026, aiming for a compound annual growth rate (CAGR) of 26% in net profit [3] Valuation and Future Outlook - The company is expected to achieve net profits of 1.45 billion yuan in 2024, 1.53 billion yuan in 2025, and 1.84 billion yuan in 2026, corresponding to P/E valuations of 18, 17, and 14 times respectively [4] - The financial burden from overseas debt is expected to improve, supporting the completion of the stock incentive targets [4]