The Hong Kong Stock Analysts Association Vice Chairman Guo Sizhi stated that as of the end of August, the market has entered the latter half of August. At the time of writing, the market's current trend is still relatively low and high. The Hang Seng Index has risen from its low of 16,441 points on the 5th to its high of 17,685 points on the 19th, with a volatility of 1,244 points within the month. Due to the continuous shrinkage of market trading and the lack of momentum, the upward trend of the market has been gradually limited. Therefore, whether there will be higher indices in the remaining trading days of August will depend on the attitude of capital inflows. In addition, the market recently retested the 250-day moving average (around 17,279 points) repeatedly. It should be noted that once the 250-day moving average is breached, the support of the 10-day moving average (around 17,234 points) and the 20-day moving average (around 17,123 points) will also face a test. Once these three sets of moving averages are lost, it indicates that the market is technically falling back into a weak trend of repeated attempts to test the bottom, with the current bottom being the low of 16,441 points on the 5th of this month.
Huazhu Group-S (01179.HK) reported its interim performance for the period ending in June, with revenue of 11.426 billion Chinese yuan, a year-on-year increase of 14.1%. Adjusted EBITDA, which can more effectively reflect the group's core business situation, was 3.5 billion yuan in the first half of this year, compared to 2.8 billion yuan in the same period last year, as the group sold its remaining Accor shares in the first quarter of last year. Observation shows that hotel industry revenues in general have declined, but Huazhu Group's performance has been relatively good, especially in the second quarter, when the group achieved revenue of 6.1 billion yuan, an increase of 11.2% compared to the same period last year. Hotel revenue reached 23.4 billion yuan, a year-on-year increase of 15.5%. The financial report shows that the average room rate for the group in the second quarter was 296 yuan, a year-on-year decrease of about 2.9%, but the group has a solid brand advantage and service advantage, so it can still maintain high-quality expansion of the hotel network in the Chinese market and further improve the occupancy rate of the hotel industry. In the second quarter, the group's hotel occupancy rate increased to 82.6%, an increase of 0.7 percentage points compared to the same period last year.
During the earnings conference call, investors expressed concerns about supply in the hotel industry. The management of Huazhu Group stated that the hotel industry is a highly market-oriented industry, and supply and demand will be market-driven. However, high-quality supply is still scarce in the market, so Huazhu Group always adheres to high quality and excellent service.
As of the end of June, Huazhu Group operates a total of 10,286 hotels worldwide, with a total of 1.002 million hotel rooms. The number of hotels awaiting opening is 3,294. The group also operates 10,150 hotels in China, with a total of 0.9743 million hotel rooms. The group will continue to invest in the scale development of hotel networks in China, reflecting the group's firm commitment to China and its bullish view on the long-term development value of the mainland hotel industry. The group will continue to focus on the development of mid-range and economy hotels in the domestic market, promoting the continuous upgrade of structure and products.
As for the overseas market, Huazhu International is also actively developing with a more aggressive attitude. As of the second quarter, the average rentable room per room for the group is 82 euros, compared to 78 euros in the same period last year. The average room rate is 120 euros, an increase of 2.6% year-on-year, and the occupancy rate is 68.3%, an increase of 1.2 percentage points year-on-year. The future development prospects of the group are bright. It is worth noting that hotels are a long-term business, so the return on investment takes a relatively long time to materialize. When the economy rebounds, the hotel industry is expected to have substantial returns, and one thing is certain: Huazhu Group's future development space will be better than its peers.
(The writer is a licensed person of the SFC)~