Shenwan Hongyuan Securities·2025-11-19 13:55Investment Rating - The report maintains a "Buy" rating for Huazhu (HTHT) [2][5] Core Insights - Huazhu's third-quarter performance exceeded expectations, with revenue reaching RMB 7 billion, a year-on-year increase of 8.1%, surpassing previous guidance of 2%-6% [5] - The company continues to expand its light-asset model, with a significant increase in revenue from management and franchise operations, which grew by 27.2% to RMB 3.3 billion [5] - The introduction of the new mid-to-high-end brand "Quanjing Daguan" aims to enhance the company's brand portfolio [5] Financial Data and Earnings Forecast - Revenue projections for Huazhu are as follows: - 2023: RMB 21,882 million - 2024: RMB 23,891 million - 2025E: RMB 25,378 million - 2026E: RMB 26,562 million - 2027E: RMB 28,011 million - Net profit forecasts are: - 2023: RMB 4,085 million - 2024: RMB 3,048 million - 2025E: RMB 4,740 million - 2026E: RMB 5,742 million - 2027E: RMB 6,259 million - The gross margin is expected to improve from 34% in 2023 to 41% by 2027 [4][6] Operational Highlights - As of the end of Q3 2025, Huazhu operates 12,702 hotels globally, with a total of 1.246 million rooms [5] - The company opened 749 new hotels in Q3 2025, aiming for a total of 2,300 new openings for the year [5] - The domestic RevPAR for Q3 2025 was RMB 256, showing a slight decline of 0.1% year-on-year, while the overseas RevPAR improved by 6.1% to €87 [5] Strategic Developments - The company is focused on enhancing its mid-to-high-end offerings and has launched the "Quanjing Daguan" brand to diversify its product line [5] - A dividend payment of approximately RMB 1.8 billion in Q3 reflects the company's confidence in future cash flows and commitment to shareholder returns [5]