On August 30, 2023, Morgan Stanley released its first coverage report. In the research report, Damo stated that Yaduo is the number one high-end hotel brand, and its growth rate far exceeds that of its peers.

First, in terms of the number of hotels, as of June 2023, Yaduo has opened more than 1,000 hotels, which is a significant leader in scale (only about 300 in the second place in the industry); secondly, Yaduo adds more than 200 hotels every year, while other high-end brands can only add 50-100, demonstrating the strong competitiveness of the Yaduo brand. From 2019 to 2022, the compound growth rate of the number of Yaduo guest rooms reached 32%, and it is expected that the compound annual growth rate from 2022 to 2025 will remain at 28%, which is three times the growth rate of other domestic and foreign hotel brands (the growth rate in the same industry is about 10%).

Meanwhile, according to AlphaWise's geographical location data, Damo estimates that in the future, Yaduo will cover 270 cities in China. With the flagship brand Yaduo alone, the number of stores is expected to exceed 2,400.

After years of product upgrades and iterations, Yaduo already has mature hotel products with high return certainty, which will drive healthy growth in profit levels and cash flow. Since its establishment in 2013, Yaduo has covered all 31 provincial capitals in China and has rapidly expanded to surrounding cities. Damo believes that at present, Yaduo no longer needs to display brands through direct management or asset-heavy investment; in the future, it is entirely possible to achieve rapid network expansion through an asset-light model.

Damo expressed full confidence in Yaduo's scale expansion and profit growth. It expects revenue of 6.04 billion dollars in 2025 and an EBITDA of 1.73 billion yuan in 2025. The target price is 36 US dollars, corresponding to 18x 2025 EV/EBITDA, and a 20% premium over Huazu 15x 2025 EV/EBITDA.