It focuses on the operation and management of selected mid-range and high-end hotels, and its brand stores have achieved nationwide coverage. The company can be traced back to the Junlan Zhejiang World Trade Hotel in 1997. The Junting brand was founded in 2007, Junting and Junlan were integrated and listed on the New Third Board in 2016. The high-end brands Pagoda Junting and Yobari Junting were launched the following year, and listed on the Shenzhen Stock Exchange in 2021. As of Q3 2023, the company has opened a total of 213 hotels, including 113/63/37 Junlan/Junting/ Jinglan brand stores respectively, with a total guest room capacity of over 40,000 rooms.
“One store, one product” creates high premium capacity and low alternative hotel products. Over the years, the company has continuously optimized its brand positioning in multiple paths such as property, products, technology, and management. Cultural characteristics have been divided at multiple levels, and the advantages of differentiation are obvious, forming a high brand premium.
Take the lead in entering the asset management model and accelerate the pace of expansion. The company established Shanghai Jundacheng Commercial Development Co., Ltd. in March 2023, began exploring asset management models, and set up a number of industrial private equity funds for early investment in hotel development in December of the same year, combining core hotel management capabilities with pre-REITs and industrial merger and acquisition funds, which is expected to accelerate the expansion of the company's mid-range and high-end selected service hotels.
After the climbing period, new directly-managed stores were added in 2023, and the results are expected to be released in 2024. Affected by pre-opening investment and asset disposal of directly-managed hotels, the profit side was greatly squeezed in 2023. The opening of a new store in 2024 is expected to release results after going through the climbing period.
Profit forecast: The company is expected to achieve revenue of 5.9/9.3/ 1.10 billion yuan in 2023-2025, up 73.3%/56.8%/17.9% year on year, and achieve net profit of 0.47/1.51/229 million yuan, up 58.4%/220.2%/51.9% year on year. Considering that the company is in a period of rapid growth and has strong mid-range and high-end hotel management and development capabilities, the product is irreplaceable, covered for the first time, and given a “gain” rating.
Risk warning: store expansion falls short of expectations; demand recovery falls short of expectations; public opinion risk; other risks