Investment Rating - Maintains an "Outperform" rating for Huazhu Group-S (1179 HK) [1][16] Core Views - Q3 2024 revenue increased slightly by 2 4% to RMB 6 44 billion, within the lower range of the guidance (2-5% growth) [1][7] - Adjusted net profit declined by 10 8% YoY to RMB 1 37 billion, and adjusted EBITDA decreased by 9 5% to RMB 2 11 billion, slightly below Bloomberg consensus estimates [1][7] - Domestic hotel RevPAR declined by 7 9% YoY to RMB 256, impacted by high base effects and weather disruptions [1][8] - Overseas hotel revenue grew by 8 9% YoY to RMB 1 28 billion, with a net loss of RMB 89 million due to restructuring costs [1][11] Domestic Hotel Operations - Domestic hotel RevPAR for mature stores decreased by 10 3% YoY to RMB 258, with ADR down 8 4% and occupancy rate down 1 8 percentage points [1][8] - 774 new hotels opened in Q3 2024, with a net increase of 557 hotels, bringing the total domestic hotel count to 10,707 by the end of Q3 2024 [1][8] - Domestic revenue grew by 1 0% YoY to RMB 5 162 billion, with franchised revenue up 14 7% and direct-operated revenue down 10 4% [1][8] Overseas Hotel Operations - Overseas DH RevPAR increased by 3 7% YoY, driven by a 2 5% increase in ADR and a 0 8 percentage point increase in occupancy rate [1][11] - The company exited 14 self-operated hotels in Denmark and fully took over the Zleep brand, with restructuring costs of RMB 81 million [1][11] Future Outlook - Q4 2024 revenue is expected to grow by 1-5%, with RevPAR expected to decline in the mid-single digits but with a narrowing YoY decline [1][12] - The company plans to accelerate its expansion in lower-tier cities, upgrade its mid-to-high-end hotel brands, and strengthen direct sales capabilities [1][12] - Overseas operations are expected to improve in 2025 due to ongoing asset-light optimization and operational enhancements [1][12] Financial Forecasts - Revenue for 2024E is projected at RMB 23 305 billion, with adjusted net profit of RMB 3 935 billion [4] - Adjusted EPS for 2024E is forecasted at RMB 1 23, with a PE ratio of 19 8x [4] - ROE is expected to be 25 2% in 2024E, with an EBIT margin of 16 9% [4]
华住集团-S：高基数下营收平稳增长，国内开店提速国外加速整合