SSAW Hotels(301073) Guotou Securities·2024-09-02 06:44Investment Rating - The investment rating for the company is "Buy-A" with a target price of 19.96 CNY over the next six months [1][7]. Core Views - The company is experiencing a short-term pressure on performance, but continues to expand its hotel portfolio, with a significant increase in self-operated hotel numbers contributing to a 49.75% year-on-year revenue growth in the first half of 2024 [2][4]. - Despite a decline in net profit by 31.82% in the first half of 2024, the company has shown strong cash flow generation, with a 147.55% increase in net cash flow from operating activities [2][3]. - The company is focusing on strategic expansion, having signed 19 new hotels in the first half of 2024, which includes various brands under its umbrella, solidifying its leadership position in the mid-to-high-end hotel market [4][5]. Summary by Sections Financial Performance - In the first half of 2024, the company achieved a revenue of 331 million CNY, up 49.75%, while the net profit was 14 million CNY, down 31.82% [2]. - The gross margin for the first half of 2024 was 31.18%, a decrease of 11.57 percentage points, primarily due to the ramp-up costs of new hotels [3]. - The company reported a net profit margin of 4.14%, down 4.96 percentage points, indicating a significant impact from the decline in gross margin [3]. Market Expansion - The company signed 19 new hotels in the first half of 2024, with a total of over 400 projects in the mid-to-high-end segment [4]. - The company plans to open 184 new hotels in the future, with a focus on expanding its brands in various regions [4]. Market Dynamics - The company's RevPAR (Revenue per Available Room) for its direct-operated hotels was 310.50 CNY, a slight decrease of 2.13%, but still up 10.36% compared to the same period in 2019 [5]. - The performance varied by region, with Shanghai showing strong recovery due to international tourism, while other markets like Hangzhou adapted through new consumption models [5].