花旗：中国酒店_低线城市表现优异；首选华住

Investment Rating - The investment rating for H World is "Buy" with a target price of HK$42.00 and US$54.00 based on a 2024E EV/EBITDA of 18x, which is 0.5 standard deviations above the historical average [7][10]. Core Insights - The hotel industry in lower-tier cities is outperforming, particularly during the Golden Week, benefiting H World due to its expansion in these areas [1][2]. - RevPAR (Revenue per Available Room) is expected to stabilize into 2025E, with easing pressure from 4Q24E due to easier ADR (Average Daily Rate) comparisons and supportive government policies [3][4]. - The hotel supply is projected to return to pre-COVID levels by year-end, with new supply normalizing in 2025E, allowing leading hotel chains like H World to capitalize on industry consolidation opportunities [4]. Summary by Sections Golden Week Performance - During the Golden Week, the hotel industry in China saw a 10.4% year-over-year drop in RevPAR, primarily due to a 13.4% decline in ADR, while occupancy (OCC) improved by 3.5% year-over-year [2]. - Lower-tier cities showed year-over-year improvements in both OCC and ADR, indicating strong leisure travel demand [2]. RevPAR Outlook - Following a high base in 3Q24E, RevPAR decline is expected to narrow on a year-over-year basis from 4Q24E, supported by government policies aimed at boosting service consumption [3]. Industry Supply Dynamics - The hotel industry's supply is anticipated to recover to pre-COVID levels by the end of the year, with new property supply focusing on product upgrades and differentiation [4]. - Despite short-term fluctuations in RevPAR, the hotel business remains attractive for franchisees due to stable cash flow and declining rental costs [4].