Investment Rating - Maintain "Recommend" rating [1][2] Core Views - The company achieved a significant turnaround in 2023, with revenue reaching 21.9 billion yuan, a 57.9% YoY increase, and net profit attributable to the parent company of 4.085 billion yuan, compared to a loss of 1.8 billion yuan in 2022 [1] - RevPAR exceeded 2019 levels, driven by ADR growth, with Huazhu-branded hotels achieving a 229 yuan RevPAR in Q4 2023, up 43.8% YoY and 20.0% compared to 2019 [1] - Steady expansion with 460 new openings in Q4 2023, bringing the total number of operating hotels to 9,394 globally, with a strong pipeline of 3,061 hotels [1] - The company is leveraging its competitive advantages in product structure, brand effectiveness, and membership systems, with operational cost reductions and efficiency improvements driving high performance elasticity [1] - Expected net profit attributable to the parent company for 2024-2026 is 4.389 billion, 4.955 billion, and 5.399 billion yuan, respectively, with corresponding P/E ratios of 24x, 21x, and 19x [1][2] Financial Performance - 2023 revenue: 21.882 billion yuan, +57.9% YoY [2] - 2023 net profit attributable to parent: 4.085 billion yuan, +324.3% YoY [2] - 2023 EPS: 1.25 yuan, with a P/E ratio of 25x [2] - 2024E revenue: 23.396 billion yuan, +6.9% YoY [2] - 2024E net profit attributable to parent: 4.389 billion yuan, +7.5% YoY [2] - 2024E EPS: 1.34 yuan, with a P/E ratio of 24x [2] Operational Metrics - Huazhu-branded hotels: Q4 2023 RevPAR of 229 yuan, +43.8% YoY, +20.0% vs 2019; ADR of 284 yuan, +18.3% YoY, +22.5% vs 2019; OCC of 80.5%, +14.3pct YoY, -1.7pct vs 2019 [1] - Deutsche Hospitality: Q4 2023 RevPAR of 73 euros, +1.3% YoY, +10.6% vs 2019; ADR of 115 euros, -5.9% YoY, +18.6% vs 2019; OCC of 63.8%, +4.5pct YoY, -4.2pct vs 2019 [1] - Total operating hotels: 9,394 globally, with 9,263 Huazhu-branded hotels and 131 Deutsche Hospitality hotels [1] - Pipeline: 3,061 hotels, including 1,121 economy, 1,503 mid-scale, 397 upper mid-scale, and 69 upscale hotels [1] Strategic Focus - Continued focus on mid-to-high-end brand expansion, with Han Ting and Quan Ji hotels growing by 10.5% and 24.9% YoY, respectively [1] - Emphasis on high-quality lean growth, with ongoing optimization of hotel quality and development [1] - Integration of membership and supply chain platforms to further enhance operational efficiency and performance [1]
2023年年报点评：全年经营超预期，持续推进门店结构中高端升级