JINJIANG HOTELS(600754) 国泰君安·2024-09-02 23:39Investment Rating - The report maintains an "Overweight" rating for Jinjiang Hotels, with a target price of 30.80 RMB, down from the previous target of 35.66 RMB [4] Core Views - The company's performance is in line with expectations, with operational data fluctuations impacting results, but accelerated store adjustments are expected to improve efficiency [3] - Directly-operated stores are undergoing rapid adjustments, while overseas operations continue to reduce losses [3] - The company's 2024/25/26 EPS forecasts have been revised to 1.38/1.40/1.58 RMB, with net profits attributable to shareholders of 14.75/15.03/16.96 billion RMB [8] - The company is expected to benefit from its industry leadership and improved operational efficiency post-organizational restructuring [8] Financial Performance - 2024 H1 Revenue: 6.892 billion RMB, up 0.23% YoY, with net profit attributable to shareholders of 848 million RMB, up 59.15% YoY [8] - Q2 2024 Revenue: 3.686 billion RMB, down 4.84% YoY, with net profit attributable to shareholders of 657 million RMB, up 68.02% YoY [8] - Directly-operated revenue decreased by 8.8%, while franchise revenue increased by 9.4% [8] - Overseas operations reduced losses by 7.5 million euros, primarily due to cost-cutting and efficiency improvements [8] Operational Highlights - Store Adjustments: Directly-operated stores decreased by 47, while 680 new stores were opened, resulting in a net increase of 490 stores [8] - China Region: Revenue increased by 0.32%, with net profit up 57.79%, excluding non-recurring gains [8] - Overseas Operations: Revenue decreased by 1.8%, with losses reduced by 2.347 million euros [8] Organizational and Strategic Adjustments - The company has implemented a stock incentive plan, focusing on debt structure optimization, CRS fees, and reducing losses in directly-operated stores [8] - The organizational restructuring in the China region is nearing completion, with a new management team in place, expected to improve operational efficiency and performance [8] Financial Forecasts - 2024E Revenue: 15.477 billion RMB, up 5.6% YoY, with net profit attributable to shareholders of 1.475 billion RMB, up 47.3% YoY [9] - 2025E Revenue: 16.120 billion RMB, up 4.2% YoY, with net profit attributable to shareholders of 1.503 billion RMB, up 1.9% YoY [9] - 2026E Revenue: 16.903 billion RMB, up 4.9% YoY, with net profit attributable to shareholders of 1.696 billion RMB, up 12.8% YoY [9] Valuation Metrics - P/E Ratio (2024E): 17.22x, based on the current price and latest share count [9] - P/B Ratio (2024E): 1.42x [9] - EV/EBITDA (2024E): 11.13x [12] Industry Comparison - The hotel industry's average 2024E P/E ratio is 21x, with Jinjiang Hotels trading at a lower multiple of 17.22x [13]