BTG Hotels(600258)2024-11-01 08:30Investment Rating - The report maintains a "Hold" rating for Shoulv Hotel (600258.CH) and raises the target price to RMB 15.5, indicating a potential upside of 11.5% from the current price of RMB 13.9 [4][12]. Core Views - The report highlights that Shoulv Hotel's RevPAR (Revenue per Available Room) faced pressure in Q3 2024, declining by 7.8% year-on-year due to a high base from the previous year. This decline in RevPAR led to a 6.4% decrease in revenue and a 2.3 percentage point drop in gross margin [2][3]. - Despite the current performance challenges, the company is optimistic about its store expansion plans, aiming to open 7000 operating stores by the end of the year, with a target of reaching 10,000 stores by 2026 [2][3]. - The report notes that the company’s performance during the National Day holiday showed a positive trend, with RevPAR increasing by 4.5%, which may support a better performance in Q4 2024 [2][3]. Financial Summary - Revenue for 2024E is projected at RMB 7,821 million, with a slight year-on-year increase of 0.4%. The net profit is expected to be RMB 857 million, reflecting a 7.7% increase [3][6]. - The report provides a detailed financial forecast, indicating a gradual increase in revenue and net profit through 2026, with revenue reaching RMB 8,879 million and net profit reaching RMB 1,201 million by 2026 [3][6]. - The operating profit margin is expected to improve from 19.7% in 2024E to 22.2% in 2026E, indicating a positive trend in operational efficiency [3][6]. Operational Insights - The report indicates that the company opened 385 new stores in Q3 2024, an increase of 48 stores compared to the same period last year, contributing to an improved store structure with a higher proportion of economy and mid-to-high-end hotels [2][3]. - The average daily rate (ADR) for Q3 2024 decreased by 5.5% year-on-year, contributing to the overall decline in RevPAR [2][3]. - The management is confident that the ongoing optimization of the store structure will enhance the hotel’s profitability in the future [2][3].