Core views:
The company released its quarterly report for the year 24:24Q1 achieved operating income of 1.85 billion yuan, up 11.5% from 23Q1 and 5.0% from 19Q1; net profit to mother of 120 million yuan, up 49.8% from 23Q1 and 63.0% from 19Q1; net profit after deducting non-attributable net profit of 100 million yuan, up 102.2% from 23Q1 and 73.2% from 19Q1.
Hotel profits have improved markedly. According to the company's financial report, looking at the 24Q1 business segment, (1) hotels: revenue of 1.64 billion yuan, and total profit of 50 million yuan, the same increase of 649.8%; (2) scenic spots: revenue of 210 million yuan, the same increase of 10.9%, total profit of 120 million yuan, the same increase of 5.7%. The number of visitors to Nanshan Scenic Area also increased 17.3% to 2.47 million, another record high.
RevPAR was generally flat year over year. According to the company's financial report, 24Q1's total hotel RevPAR was 131 yuan, up 0.1% from 23Q1, and recovered to about 96% in 19Q1. ADR was 217 yuan, up 1.4% from 23Q1, and recovered to about 111% in 19Q1. Occ was 60.1%, down 0.8 pp from 23Q1, and recovered to about 77% in 19Q1.
Stores are expanding steadily, and the proportion of high-end hotels continues to rise. According to the company's financial report, the 24Q1 company opened 205 new stores (36 economic+66 high-end companies+103 light management), and the number of hotels increased by 32 to 6,295; the number of middle and high-end hotels increased by 0.7 pp to 28.2% at the end of 23; as of 24Q1, the company's reserve stores were 1940, and 2,035 at the end of 23.
Acquired Huanhui Real Estate to further develop high-end hotels. According to the company's acquisition announcement, the company plans to acquire 9% of Huanhui Real Estate's shares and claims held by the controlling shareholder First Travel Group for 530 million yuan. The purpose is to participate in the construction of the Zhangjiawan complex project (located in the Global Theme Park) through Huanhui Real Estate. Part of the hotel invested in the project fully entrusts the company's wholly-owned subsidiary First Travel Anno to operate as a “Nolan” brand flagship store, and the company's high-end hotel brand system will be further enriched.
Profit forecast and investment advice: The company's net profit for 24-26 is estimated to be 9.2 billion yuan, 10.3 billion yuan, and 1.13 billion yuan, respectively. The year-on-year growth rates are 15.2%, 12.6%, and 10.0%, respectively, maintaining the judgment of a reasonable value of 20.50 yuan/share and maintaining a “buy” rating.
Risk warning: macroeconomic fluctuations; increased industry competition; progress in store expansion falls short of expectations.