JINJIANG HOTELS(600754)2024-11-04 07:39Investment Rating - The report maintains a "Hold" rating for Jin Jiang Hotels (600754.CH) with a target price of RMB 28.1, indicating a potential upside of 5.6% from the current price of RMB 26.6 [2][5][6]. Core Insights - Jin Jiang Hotels reported a revenue of RMB 38.98 billion in Q3 2024, a year-on-year decline of 7.1%, and a net profit attributable to shareholders of RMB 2.6 billion, down 43.1% year-on-year. The significant drop in net profit is attributed to a normalization of post-pandemic travel demand, negative operating leverage, and one-time factors such as increased effective tax rates [2][3]. - The company is expected to exceed its annual store opening target, having opened 1,149 new stores in the year to date, with a total of 13,186 stores as of Q3 2024. The proportion of mid-to-high-end hotels has increased by 2.7 percentage points to 59.7% [2][3][4]. Financial Performance Summary - Revenue and Profit Forecasts: The revenue for 2024E is projected at RMB 14.008 billion, reflecting a decrease of 4.4% year-on-year. The net profit attributable to shareholders is forecasted to be RMB 1.176 billion, a decrease of 20.8% from previous estimates [7][12]. - RevPAR Performance: In Q3 2024, the domestic RevPAR for full-service and limited-service hotels decreased by 18.2% and 8.4% year-on-year, respectively, primarily due to significant declines in average room rates [3][11]. - Operating Efficiency: The overseas business showed slight improvement with revenues of RMB 12.5 billion in Q3 2024, a year-on-year increase of 1.9%, driven by a 6.3% increase in average room rates due to events like the Paris Olympics [2][3]. Store Expansion and Structure - Jin Jiang Hotels has maintained a high pace of store openings, with 469 new stores added in Q3 2024 alone. The company is on track to exceed its target of opening 1,200 new stores by the end of the year [2][3][4]. - The ongoing optimization of store structure, with an increasing share of mid-to-high-end hotels, is expected to enhance profit margins [2][3].