BTG Hotels(SH:600258) Haitong Securities·2024-03-19 16:00Investment Rating - The investment rating for the company is "Outperform the Market" [2][17]. Core Viewpoints - The company is a leading hotel management group backed by state-owned resources, focusing on both mid-to-high-end upgrades and rapid expansion in the light management segment [4][5][9]. - The hotel industry exhibits both cyclical and growth characteristics, with growth driven by increased chain rates and structural upgrades [5]. - The company has shown significant revenue recovery, with projected revenues of 80.8 billion, 88.6 billion, and 92.2 billion yuan for 2023, 2024, and 2025 respectively, alongside a substantial increase in net profit [17][30]. Summary by Sections Investment Rating - The company is rated "Outperform the Market" with a target price range of 18.49 to 23.11 yuan based on a PE ratio of 20-25x for 2024 [17][30]. Market Performance - The company has experienced a significant recovery in revenue and profit margins, with a projected revenue growth of 58.7% in 2023 and a net profit growth of 239.4% [17][30]. Industry Characteristics - The hotel industry is characterized by a lag in supply adjustment, with new hotel supply expected to meet demand by 2023. The chain rate in the hotel industry increased from 26% at the end of 2019 to 39% at the end of 2022 [5]. - The company has established a comprehensive product line from economy to high-end hotels, benefiting from state-owned financing and resource support [5][30]. Competitive Advantages - The company has built brand barriers through years of industry experience and has achieved significant scale through acquisitions, including the purchase of Home Inn in 2016 [5][30]. - The company has successfully expanded its mid-to-high-end hotel offerings, increasing the number of such hotels from 945 in 2019 to 1517 in 2022, with a CAGR of 17.1% [5][9]. Current Highlights - The company is focusing on a dual strategy of upgrading mid-to-high-end offerings while expanding into lower-tier markets through light management models [5][9]. - The number of light management hotels has grown from 510 in 2019 to 2451 in 2022, representing a CAGR of 68.8% [5][9]. Financial Forecast - The company forecasts total revenues of 80.8 billion, 88.6 billion, and 92.2 billion yuan for 2023, 2024, and 2025, with net profits of 8.1 billion, 10.3 billion, and 12.2 billion yuan respectively [17][30]. - The projected gross margin is expected to improve from 38.2% in 2023 to 41.4% in 2025 [21].