JINJIANG HOTELS(SH:600754) Changjiang Securities·2025-08-31 08:43Investment Rating - The investment rating for the company is "Buy" and is maintained [8] Core Insights - In the first half of 2025, the company achieved operating revenue of 6.526 billion yuan, a year-on-year decrease of 5.31%, and a net profit attributable to shareholders of 371 million yuan, down 56.27% year-on-year. However, the net profit excluding non-recurring items was 409 million yuan, an increase of 5.17% year-on-year [2][6] - The company plans to continue a high opening strategy, expecting to add 1,300 new hotels and sign 2,000 new hotels in 2025. The long-term outlook is positive based on the company's "12+3+1" brand development strategy. Projected net profits attributable to shareholders for 2025-2027 are 1.048 billion, 1.301 billion, and 1.499 billion yuan, with corresponding P/E ratios of 23, 19, and 16 times [2][6] Summary by Sections Financial Performance - In Q2 2025, the company reported operating revenue of 3.585 billion yuan, a year-on-year decrease of 2.74%, and a net profit attributable to shareholders of 335 million yuan, down 49.12% year-on-year. The net profit excluding non-recurring items was 382 million yuan, an increase of 17.11% year-on-year [6] - The significant decline in net profit is primarily due to the previous year's completion of the sale of 100% equity in a hotel management company and strategic exits from several properties, which generated disposal gains [6] Operational Insights - The company opened 673 new hotels in the first half of 2025, including 10 full-service hotels and 663 limited-service hotels. A total of 293 hotels were closed, resulting in a net increase of 380 hotels. By the end of June 2025, the total number of opened hotels reached 13,796, with a continued optimization in structure [6] - The average daily rate (ADR) for full-service hotels in mainland China decreased by 9.78%, while the occupancy rate (OCC) saw a slight decline of 0.24%. Limited-service hotels experienced a 6.15% drop in ADR, but a 0.7 percentage point increase in OCC [6] Profitability - The company's gross margin decreased by 3.57 percentage points to 36.28% in the first half of 2025. However, cost reduction efforts were evident, with significant declines in sales, management, and financial expense ratios [6] - The overall net profit margin fell by 8.2 percentage points to 6.18% due to the impact of one-time asset disposals [6]