SSAW Hotels(301073) ZHESHANG SECURITIES·2025-03-14 05:39Investment Rating - The report initiates coverage with a "Buy" rating for Junting Hotel [6][14]. Core Views - Junting Hotel differentiates itself in the competitive mid-to-high-end hotel market by adopting a "one store, one product" strategy, which enhances its RevPAR and profitability per store [1][3][13]. - The company is leveraging various expansion strategies, including direct management, franchising, and external funds, to minimize risks and achieve nonlinear growth despite its smaller scale compared to competitors [1][3][13]. - The mid-to-high-end hotel market is experiencing a transformation, with domestic brands poised to emerge as leaders due to changing consumer preferences and the increasing importance of differentiated offerings [2][42]. Summary by Sections Company Overview - Junting Hotel Group is a leading operator of mid-to-high-end business and resort hotels in China, focusing on a service system that emphasizes "design selection, cultural selection, and lifestyle selection" [22][24]. - The company has undergone several phases of development, including brand optimization and expansion into high-end resort markets, culminating in its listing on the Shenzhen Stock Exchange [23][24]. Market Dynamics - The mid-to-high-end hotel market is expanding, with a growing demand for differentiated services and experiences, driven by younger consumers willing to pay a premium [2][35]. - The supply-demand mismatch in the hotel market is expected to diminish, with a projected increase in the number of mid-range hotel rooms [36][40]. Growth Strategy - Junting Hotel's growth strategy includes enhancing its direct management stores, launching a franchise model, and utilizing external funds to support expansion [3][4][12]. - The company aims to establish a thousand-store scale within three years through its franchise business, which is set to commence in 2025 [3][4]. Financial Projections - The report forecasts Junting Hotel's revenue to reach 627 million, 790 million, and 1.031 billion yuan for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 17.42%, 26.05%, and 30.42% [4][5]. - The projected net profit for the same period is expected to be 29 million, 65 million, and 144 million yuan, with significant growth anticipated in the latter years [4][5].