SSAW Hotels(301073) Guotai Junan Securities·2024-09-06 09:12Investment Rating - The investment rating for the company is "Buy" [3] Core Views - The company's performance is below expectations due to macroeconomic fluctuations affecting direct store performance and an extended ramp-up period for newly opened stores. The EPS estimates for 2024, 2025, and 2026 have been revised down to 0.35, 0.40, and 0.47 yuan respectively, reflecting decreases of -0.27, -0.50, and -0.71 yuan [2] - Despite the challenges, the company is in a rapid growth phase with new store openings significantly outpacing other hotel groups, indicating potential for leapfrog growth. The target price has been adjusted down to 18.80 yuan, which is above the industry average PE of 47x for 2025, maintaining a "Buy" rating [2][3] Financial Performance Summary - For the first half of 2024, the company achieved revenue of 331 million yuan, a year-on-year increase of 49.75%, while the net profit attributable to shareholders was 13.70 million yuan, a decrease of 31.82%. The net profit after deducting non-recurring items was 13.74 million yuan, down 25.54% [2] - In Q2 2024, the company reported revenue of 170 million yuan, up 36.32% year-on-year, but the net profit attributable to shareholders was only 904 thousand yuan, down 43.51% [2] - The RevPAR for direct stores in Q2 2024 was 313.8 yuan, down 10.5%, with an occupancy rate of 65.09%, a decrease of 8.19 percentage points [2] Store Expansion and Market Dynamics - The company opened 8 new direct stores, contributing to revenue growth, but the ramp-up period for these new stores is longer than anticipated due to low business travel demand [2] - The company is focusing on improving efficiency to enhance the contribution from new store openings [2] - The high base effect, sluggish business travel demand, and the pricing pressure on mid-to-high-end positioning have significantly impacted the company's performance, leading to a noticeable decline in gross margin [2] Financial Forecasts - Revenue is projected to grow from 534 million yuan in 2023 to 667 million yuan in 2024, reflecting a growth rate of 24.9%. The net profit attributable to shareholders is expected to increase from 31 million yuan in 2023 to 68 million yuan in 2024, representing a growth of 124% [8] - The company’s EPS is forecasted to rise from 0.16 yuan in 2023 to 0.35 yuan in 2024, with a projected PE ratio of 46.16 based on the current price [10][11]