JINJIANG HOTELS(SH:600754) HTSC·2025-09-01 11:31Investment Rating - The report maintains a "Buy" rating for the company [7][5]. Core Views - The company has shown initial results in cost reduction and efficiency improvement, with a focus on high-quality development [1]. - The hotel business performance has been flat, but there are signs of marginal improvement in the second quarter [2]. - The overseas operations are showing signs of recovery, although adjustments in management are still needed [3]. - The company is actively expanding its hotel network and enhancing its competitive edge through digital transformation and member system improvements [4]. Summary by Sections Financial Performance - In H1 2025, the company achieved revenue of 6.526 billion RMB, a year-on-year decrease of 5.31%, and a net profit attributable to shareholders of 371 million RMB, down 56.27% [1]. - The second quarter saw revenue of 3.585 billion RMB, a decrease of 2.74% year-on-year, with a net profit of 335 million RMB, down 49.12% [1]. Hotel Business Operations - The hotel business revenue for H1 2025 was 6.422 billion RMB, down 5.14% year-on-year, with a net profit of 240 million RMB, down 66.16% [2]. - The domestic hotel business revenue was 4.575 billion RMB, down 4.25% year-on-year, primarily due to a subdued business travel environment [2]. Overseas Operations - In H1 2025, overseas limited-service hotel revenue was 2.37 billion EUR, down 9.02%, with a net loss of 45.15 million EUR [3]. - The company is focusing on debt restructuring and improving profitability through various financial strategies [3]. Expansion and Strategy - As of H1 2025, the company operated 13,796 hotels, with 673 new openings and 293 closures, resulting in a net increase of 380 hotels [4]. - The company has signed contracts for 17,771 hotels, with a reserve of 3,975 hotels, indicating strong market share growth [4]. Profit Forecast and Valuation - The report maintains profit forecasts with expected EPS of 0.95, 1.17, and 1.33 RMB for 2025, 2026, and 2027 respectively [5]. - The target price is set at 27.55 RMB, based on a 29x PE for 2025 [5].