Atour Lifestyle (ATAT) 第一上海证券·2024-11-10 05:35Investment Rating - The report assigns a "Buy" rating to Atour Lifestyle Holdings Limited (ATAT US) with a target price of $32 5, representing a 23 1% upside from the current price [1] Core Views - Atour is a leading player in China's mid-to-high-end hotel industry, with a strong brand and high-quality service [1] - The company has achieved rapid expansion through a light-asset franchise model, with 1,412 hotels and 161,686 rooms as of FY24Q2 [1] - Atour has developed a robust membership system, with over 76 million members and a member repurchase rate increasing from 45% in 2019 to 58% in 2022 [1] - The company's recovery from the pandemic has been industry-leading, with RevPar reaching 114% of 2019 levels [1] - Atour's retail business, Atour Market, has become a significant growth driver, contributing 20 8% of total revenue in 2023 [1] Company Overview - Atour operates six hotel brands and a retail brand, Atour Market, with 1,412 hotels and 161,686 rooms as of FY24Q2 [1][2] - The company has a strong customer satisfaction record, ranking first among six major mid-to-high-end hotel chains since 2017 [2] - Atour's brands include Atour, Atour S, Atour Light, Atour X, Z Hotel, and A T HOUSE, catering to different market segments [3] Business Model - Atour primarily uses a franchise model for expansion, with 98% of its hotels being franchised as of FY24Q2 [10] - The company's revenue is mainly driven by franchise fees, with franchise hotel revenue accounting for 58% of total revenue in 2023 [12] - Atour's retail business has seen rapid growth, with revenue increasing from RMB 69 million in 2019 to RMB 972 million in 2023 [13] Industry Overview - China's hotel industry is undergoing structural changes, with the mid-to-high-end segment growing rapidly [1] - The industry's chain rate has increased from 20% in 2017 to 41% in 2023, with further growth expected to 47 8% by 2026 [17][18] - The mid-to-high-end hotel market is the fastest-growing segment, with total revenue increasing from RMB 19 5 billion in 2016 to RMB 65 9 billion in 2021 [27] Competitive Advantages - Atour has a strong focus on customer experience, with a well-designed service process and a unique "peak-end" service concept [36][37] - The company's membership system is highly effective, with a low entry barrier and attractive benefits, leading to high member loyalty [39][42] - Atour's retail business has become a significant growth driver, with GMV reaching RMB 1 14 billion in 2023, up 253% YoY [48][51] Operational Performance - Atour's operational recovery has been industry-leading, with RevPar reaching 114% of 2019 levels [1] - The company's occupancy rate in 2023 was 78%, close to the industry leader Huazhu Group [53] - Atour's retail business has seen rapid growth, with revenue increasing from RMB 69 million in 2019 to RMB 972 million in 2023 [13]