BTG Hotels(SH:600258) Guotai Junan Securities·2024-09-06 03:08Investment Rating - The investment rating for the company is "Buy" [4] - The target price is set at 14.45 CNY, down from the previous forecast of 19.90 CNY [4] Core Insights - The company's performance is in line with expectations, with continuous improvement in operational efficiency and accelerated store expansion, which is expected to steadily release profits through increased store numbers and refined operations [2] - The company reported a revenue of 3.733 billion CNY for the first half of 2024, representing a 3.46% increase year-on-year, and a net profit attributable to shareholders of 357 million CNY, up 27.49% [9] - The company has reduced its earnings per share (EPS) estimates for 2024, 2025, and 2026 to 0.76, 0.85, and 0.94 CNY respectively, reflecting a downward adjustment due to macroeconomic fluctuations affecting business travel demand [9] Summary by Sections Financial Performance - For the first half of 2024, the company achieved a revenue of 3.733 billion CNY, with a net profit of 357 million CNY, and a net profit excluding non-recurring items of 323 million CNY [9] - In Q2 2024, revenue was 1.888 billion CNY, down 3.33% quarter-on-quarter, with a net profit of 237 million CNY, an increase of 18.51% [9] - The company’s RevPAR (Revenue per Available Room) decreased by 6% in Q2 2024, with an Average Daily Rate (ADR) decline of 3.8% and an occupancy rate (OCC) decrease of 1.6 percentage points [9] Operational Efficiency - The company has seen a significant improvement in operational efficiency, with a reduction in sales expense ratio by 0.9 percentage points and management efficiency improvements [9] - The core brand accelerated its store openings, with 169 new stores opened in the latest quarter, the highest since 2021, indicating a strong expansion strategy [9] Market Position - The company is positioned as an industry leader, and despite market valuation adjustments due to cyclical downturns, it is expected to maintain a valuation above the industry average with a projected 17x PE for 2025 [9] - The overall market sentiment towards the company has been cautious, but operational improvements and store expansion are expected to positively impact short-term performance and valuation [9]