Financial Performance - In Q2 2025, the company reported a revenue increase of 37.4% year-on-year to 2.469 billion RMB, with net profit rising by 39.8% to 425 million RMB, and adjusted net profit increasing by 30.2% to 427 million RMB [2] - The total number of registered members reached 102 million, reflecting a year-on-year growth of 34.7% [2] - Retail business revenue grew nearly 80%, accounting for 39.08% of total revenue [2][6] Hotel Operations - The average daily rate (ADR) was 433 RMB, a decrease of 1.8% year-on-year but an increase of 3.6% quarter-on-quarter [3] - Occupancy rate (OCC) was 76.4%, down from 78.4% year-on-year but up from 70.2% quarter-on-quarter [3] - Revenue per available room (RevPAR) was 343 RMB, a year-on-year decline of 4.5% but a quarter-on-quarter increase of 12.8% [3] Expansion and Strategy - In Q2, the company opened 118 new hotels, totaling 239 openings in the first half of the year, while closing 34 hotels [5] - As of June 30, 2025, the total number of operating hotels was 1,824, with a total of 204,784 rooms, representing year-on-year growth of 29.2% and 26.7% respectively [5] - The company aims to open 500 new hotels by the end of the year and anticipates closing 70 to 80 underperforming hotels [5] Retail Business Growth - Retail business revenue increased by 79.8% to 965 million RMB, with a gross merchandise volume (GMV) growth of 84.6% to 1.144 billion RMB [6] - The gross margin for the retail business improved from 50.6% to 53.3% [6] - The company has raised its retail business growth guidance to 60% year-on-year [7] Market Outlook - The company expects RevPAR pressure to ease in Q3, with a narrower year-on-year decline anticipated [5] - The overall market is expected to face challenges due to increased supply, despite some resilience in leisure travel demand [5]

Core Insights - Atar's Q2 2025 financial performance shows a revenue increase of 37.4% year-on-year to 2.469 billion RMB, with net profit rising by 39.8% to 425 million RMB [1] - The retail business has become a significant growth driver, with revenue growth of 79.8% to 965 million RMB, accounting for 39.08% of total revenue [5] Financial Performance - Revenue for Q2 2025 reached 2.469 billion RMB, a 37.4% increase year-on-year - Net profit for the same period was 425 million RMB, up 39.8% year-on-year - Adjusted net profit increased by 30.2% to 427 million RMB - Cumulative registered members reached 102 million, a growth of 34.7% year-on-year [1] Hotel Operations - The average daily rate (ADR) was 433 RMB, down 1.8% year-on-year but up 3.6% quarter-on-quarter - Occupancy rate (OCC) was 76.4%, down from 78.4% year-on-year but up from 70.2% quarter-on-quarter - Revenue per available room (RevPAR) was 343 RMB, a decrease of 4.5% year-on-year but an increase of 12.8% quarter-on-quarter [2] Expansion and Strategy - In Q2, Atar opened 118 new hotels, totaling 239 openings in the first half of the year, while closing 34 hotels - As of June 30, 2025, Atar operated 1,824 hotels with a total of 204,784 rooms, representing growth of 29.2% and 26.7% year-on-year, respectively [4] - The company aims to open 500 new hotels by the end of the year and expects to close 70-80 underperforming locations [4] Retail Business Growth - Retail business revenue grew by 79.8% to 965 million RMB, with a gross merchandise volume (GMV) increase of 84.6% to 1.144 billion RMB - The retail business's gross margin improved from 50.6% to 53.3%, with online channels accounting for over 90% of total transactions [5] - The company has raised its retail business growth guidance to 60% year-on-year [6]

Core Viewpoint - Atour, a chain hotel brand, is planning a secondary listing in Hong Kong to raise several hundred million dollars, primarily to mitigate delisting risks in the U.S. market and to capitalize on opportunities in the Hong Kong market [2] Company Overview - Atour's market capitalization is approximately $4.66 billion, with its stock price at $33.72 as of August 6 [2] - The company has experienced a tumultuous listing journey, having previously attempted to list on A-shares and faced challenges during its U.S. IPO process [5][6] Financial Performance - Atour's rapid expansion has led to significant revenue growth, with projected revenue of 7.248 billion yuan in 2024, a year-on-year increase of 55.3% [8] - The company reported a net profit of 1.306 billion yuan in 2024, up 44.6% year-on-year [8] - In Q1 2025, Atour's revenue was 1.906 billion yuan, reflecting a 29.8% increase compared to the same period in the previous year [8] Expansion Strategy - From the end of 2020 to March 2025, Atour's hotel count surged from 570 to 1,727, with a total of over 194,000 rooms [7] - The company plans to open 471 new hotels in 2024, achieving a growth rate of 63% [7] Retail Business Growth - Atour's retail segment, particularly its sleep products, has seen substantial growth, with retail revenue reaching 2.198 billion yuan in 2024, a 126.2% increase [10] - The "Deep Sleep Pillow PRO" product alone generated 370 million yuan in sales in 2023, accounting for one-third of its hotel retail business [9] Competitive Landscape - The hotel industry is becoming increasingly competitive, with rivals like Huazhu Group launching similar products [15][16] - Atour's CEO has emphasized the need to enhance brand influence and product competitiveness to maintain market share [18] Market Trends - The Hong Kong stock market has seen a surge in new listings, with 28 companies raising a total of 77.36 billion HKD in the first five months of the year, marking a 33.3% and 707% increase year-on-year, respectively [3][4] - Major hotel groups, including Jin Jiang Hotels, are also pursuing IPOs in Hong Kong to accelerate their expansion [17]

Core Viewpoint - The domestic hotel industry is experiencing a paradox where, despite a booming tourism market in 2024, hotel profitability is declining due to increased competition and cost pressures, leading to a decrease in key performance metrics such as RevPAR, ADR, and occupancy rates [1][4][6]. Industry Overview - The domestic tourism market is thriving, with significant increases in travel volume and spending, yet the hotel industry is facing challenges with declining revenue per available room (RevPAR) across all hotel tiers [3][4]. - In 2023, the hotel industry transitioned from a high base to a normalized state, with many companies struggling due to intense competition and rising costs [6]. Financial Performance - Major hotel chains like Huazhu Group reported a revenue of 23.89 billion yuan, with a net profit of 3.048 billion yuan, reflecting a year-on-year revenue growth of 9.18% but a profit decline of 25.39% [7]. - RevPAR for Huazhu was 235 yuan, with an average daily rate (ADR) of 289 yuan, both showing declines of 3% and 3.2% respectively, while occupancy rate (OCC) slightly increased to 81.2% [8]. - Other hotel brands also reported similar declines in RevPAR and ADR, indicating a widespread trend across the industry [8]. Market Dynamics - The hotel market is shifting towards a supply-demand imbalance, with the number of hotels exceeding pre-pandemic levels while tourism numbers remain below 2019 figures [15]. - The total number of hotels in China surpassed 360,000 in 2024, representing 109% of the 2019 hotel count, while domestic tourism was only at 90% of 2019 levels [15]. Expansion Strategies - Despite the challenging environment, hotel companies continue to expand aggressively, with Huazhu Group planning to open 2,300 new hotels in 2025, maintaining a strong growth trajectory [13]. - Huazhu's expansion strategy focuses on a franchise and licensing model, with over 90% of new hotels opened under these models, allowing for a lighter asset operation [14]. - Other hotel chains like Jinjiang and Shoulv also reported significant new openings, indicating a competitive push for market share [12]. Emerging Trends - The hotel industry is increasingly targeting lower-tier cities for growth, as these areas show potential for higher revenue due to rising disposable incomes [15]. - The shift from a seller's market to a buyer's market is evident, with high-end hotels being put up for sale and increased competition leading to price reductions in hotel supplies [16]. Challenges and Risks - The rapid expansion of hotel chains may lead to intensified price wars and further pressure on profitability, as evidenced by declining ADR and RevPAR across the board [15]. - Companies like Atour are also diversifying into retail, with significant revenue from products like sleep pillows, but face increasing competition from other brands entering the retail space [20].

Core Viewpoint - The domestic hotel industry is facing significant challenges despite a booming tourism market, with declining revenue per available room (RevPAR), average daily rate (ADR), and occupancy rates, leading to increased pressure on hotel operators [1][2][4]. Industry Overview - In 2024, the domestic tourism market is thriving, with significant increases in travel volume and spending, yet the hotel sector is experiencing operational difficulties [2][4]. - The overall RevPAR for the hotel industry decreased by 9.7% year-on-year, with ADR down by 5.8% and occupancy rates down by 2.5% [5][9]. Company Performance - Huazhu Group reported a revenue of 23.89 billion yuan, with a net profit of 3.048 billion yuan, marking a year-on-year growth of 9.18% in revenue but a decline of 25.39% in profit [4]. - Huazhu's RevPAR was 235 yuan, ADR was 289 yuan, and occupancy rate was 81.2%, showing a decline in RevPAR and ADR by 3% and 3.2% respectively [5]. - Jinjiang Hotels and Shoulv Hotels also reported declines in RevPAR, ADR, and occupancy rates, indicating a trend across the industry [5]. Market Dynamics - The hotel market is transitioning to a "stock era," with increased competition and cost pressures leading to a buyer's market [12]. - The supply-demand imbalance is evident, with over 360,000 hotels in China, surpassing pre-pandemic levels, while tourism numbers remain below 2019 figures [9][10]. Expansion Strategies - Despite the challenges, hotel companies are aggressively expanding, with Huazhu planning to open 2,400 new hotels in 2024, and other brands like Jinjiang and Atour also increasing their hotel counts [7][19]. - The shift towards a franchise and management model is prevalent, with over 90% of Huazhu's new hotels opened under these models [7]. Emerging Trends - The focus is shifting towards lower-tier markets, with significant growth potential in county-level cities, where hotel chain penetration is still low [10][11]. - Atour Group is also diversifying its revenue streams, with retail business contributing approximately 30% to its total revenue in 2024 [16]. Competitive Landscape - The competitive landscape is evolving, with Huazhu leading in revenue but Jinjiang still ahead in the number of hotels [19]. - Atour Group is also gaining ground, with a revenue of 7.248 billion yuan, narrowing the gap with Shoulv Hotels [19].