BTG Hotel (600258) Interim Review: Steady Growth and Continuous Upgrade

BTG Hotel (600258) Interim Review: Steady Growth and Continuous Upgrade

BTG Hotel (600258) Interim Review: Steady Growth and Continuous Upgrade
Event: BTG Hotel released its 2019 Interim Report, and the company’s revenue in 19H1 was 39.90 billion / -0.30%, net profit attributable to mother 3.6.8 billion / + 8.14%, net profit after deducting non-return to mother 3.36 billion / + 6.22%, non-recurring gains and losses mainly come from government subsidies and investment income related to comma Cayman.In Q2, the company achieved revenue of 20 in a single quarter.4.7 billion / -1.5%, net profit attributable to mother 2.9.4 billion / + 11%, net profit after deduction to mother 2.79 billion / + 8.31%. Opinion: During the asset-light expansion period, the growth rate of profit is greater than the growth rate of revenue.Revenue: 19H1 company achieved 39 revenue.90 billion / -0.30% of which hotel 37.400 million / -0.48% (such as home contribution 33.1.2 billion / -0.57%), attractions 2.50 billion / + 2.55%.Total profit: 19H1 company realized total profit 5.5.7 billion / + 5.88%, of which hotel 4.3.8 billion / + 5.67% (4 as home contribution.9.8 billion / + 5.54%), attractions 1.19 billion / + 6.66%.Net profit attributable to mother: 19H1 company achieved net profit attributable to mother 3.6.8 billion / + 8.14%, of which Home Inns contributed 3.5.2 billion / + 6.89%, Nanshan Scenic Area contributed 66.85 million equity profits / + 6.13%.(1) Due to the acceleration of the franchise opening of the hotel business, which is directly managed by the net closing of the hotel business, the hotel revenue is basically flat, but the profit is growing steadily.(2) Financial expenses continued to decline, accounting for 68.75 million yuan / -21 in 19H1.14%, financial expense ratio 1.7% /-0.33 points. There were 159 new stores opened in Q2, and 234 new stores opened in H1. 29 of the gradual opening plans were completed.3%. In Q2, 2/157 new stores were opened directly under the direct management / joining, and 28/43/36/52 were opened in economy / mid-end / cloud hotels / others; 103 were closed, including direct management / joining13/90 closed stores, 63/12/5/23 closed economy / mid-to-high end / cloud hotels / others; 56 open stores, of which 11/67 opened directly / joined, economical/ High-end / Cloud Hotel / Other net opening -35/31/31/29 respectively.The company opened its stores with high-profit franchise mid-end stores as its participation (29 net openings in Q2) and closed stores with its franchise economy stores as its participation (24 net closings in Q2).As of 19Q2, the company had a total of 4,117 hotels and 689 reserve stores; the company’s mid- to high-end accounted for 18.3% / QoQ increased by 0.1pc, direct sales accounted for 22.1% / QoQ decreased by 0.6 points. The same-store RevPAR continued to decrease, and the decrease in retention rate narrowed month-on-month.The company changed the data display caliber, merged all the hotels of BTG Rujia to copy the overall operation data (separately copied the operation data of the stores such as Jiajia and BTG stores), and separately copied the operation data of cloud hotels.According to the latest disclosure caliber, the same store RevPAR decreased by 3 in 19Q2.6% (Economy / Mid-end / Cloud Hotel decreased by 3 respectively.9% / 3.2% / 5.1%), with house prices falling by 1.1% (Economy / Mid-end / Cloud Hotel decreased by 1 respectively.3% / 1.3% / 1%), the occupancy rate decreased by 2.1pct (Economy / Mid-end / Cloud Hotel decreased by -2 respectively.2pct / -1.4pct / 3.1pct).Sino-U.S. Trade wars have been repeated, and the macroeconomic growth rate has been affected by the high base of 18H1. The growth rate of the same store RevPAR continued to shift, but the dwell rate decreased and narrowed compared with Q1. Home Inn NEO continued to upgrade and 杭州桑拿网 cooperated to launch new brands.(1) As of 19H1, the company has completed Home Inn NEO3.0 Renovation of 286, of which 236 directly operated stores / 33 of the total number of economic direct stores.6%, 50 franchise stores.(2) The company cooperated with Hyatt to launch a new mid-to-high-end brand “Yiyi”. The first batch of direct-operated stores is expected to open in the first half of 2020.(3) In cooperation with Chunqiu Group, the airport chain hotel brand “Jiahong” with aviation and travel characteristics was jointly established. The first flagship store was officially opened at Hongqiao Airport at the end of June. Investment suggestion: Hotel leader’s safety margin is strong & investment value is increasing.In terms of value, the hotel leader has barriers, large growth space and strong certainty; from the point of view 无锡桑拿网 of price, it is currently estimated to be at the bottom of history and cost-effective; from the point of cashing in, the economic stabilization is expected to catalyze the hotel stock market and recommend layout.It is estimated that the company’s revenue in 19-21 will be 86.7.1 billion / 89.3.1 billion / 93.3.5 billion, net profit attributable to mothers was 9 respectively.3.9 billion / 11.07 billion / 13.4.2 billion, corresponding to PE is 17 times / 14 times / 12 times.Maintain “Buy” rating. Risk warning: Macroeconomic risks, store development is less than expected.