Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company reported a significant decline in net profit due to high base effects from the previous year, but the non-recurring net profit showed a year-on-year increase [3][4] - The company is progressing well with its store opening plans, having opened 673 new hotels in the first half of 2025, with a net increase of 380 hotels [6] - The company is focusing on a light-asset model, with a significant increase in franchise hotels while reducing directly operated hotels [6] Financial Performance - In H1 2025, the company achieved operating revenue of 6.526 billion yuan, a year-on-year decrease of 5.31%, and a net profit attributable to shareholders of 371 million yuan, down 56.27% [3] - The non-recurring net profit for H1 2025 was 409 million yuan, reflecting a year-on-year increase of 5.17% [3] - The gross profit margin for H1 2025 was 36.28%, a decrease of 3.57 percentage points year-on-year, primarily due to declining room rates [5] RevPAR Analysis - The RevPAR for limited-service hotels in H1 2025 was 146.0 yuan, down 5.10% year-on-year, with average room rates decreasing by 6.15% [4] - The RevPAR for full-service hotels in H1 2025 was 215.67 yuan, down 10.23% year-on-year [4] - The company’s overseas limited-service hotels achieved a RevPAR of 38.88 euros, a year-on-year decrease of 1.67%, but the average room rate increased by 2.27% [5] Store Opening Strategy - The company plans to open 1,300 new hotels in 2025 and has signed contracts for 2,000 new hotels [6] - The franchise strategy is being deepened, with a net increase of 414 franchise hotels in H1 2025 [6] Profit Forecast and Valuation - The profit forecasts for 2025-2027 have been adjusted downwards, with net profit estimates of 1.006 billion yuan, 1.205 billion yuan, and 1.412 billion yuan respectively [6][7] - The current stock price corresponds to a P/E ratio of 25 for 2025, 21 for 2026, and 18 for 2027 [6][7]

Core Insights - The company reported a revenue of 6.53 billion yuan, a year-on-year decrease of 5.3% [1] - The net profit attributable to shareholders was 371 million yuan, down 56.3% year-on-year [1] - The net profit excluding non-recurring items was 409 million yuan, an increase of 5.2% year-on-year [1] - The net operating cash flow was 1.331 billion yuan, a decline of 35.1% year-on-year [1] Operational Performance - During the reporting period, the company opened 673 new hotels and closed 293, resulting in a net increase of 380 hotels, bringing the total to 13,796 hotels with 1.3329 million rooms by the end of June [1] - The company has a signed hotel reserve of 17,771 hotels, with 663 new limited-service hotels opened, and the franchise model's share increased, with the main brand's new openings accounting for 86%, up 3 percentage points from the previous year [1] Cost Control - The company implemented a flat organizational structure reform, streamlining the domestic limited-service hotel segment into 13 departments and 2 business units, which reduced the management expense ratio to 15.62%, a decrease of 2.66 percentage points year-on-year [1] - The domestic full-service hotel business achieved a revenue of 122 million yuan, an increase of 18.16% year-on-year [1]