Recently, atour lifestyle holdings released the latest quarterly financial report. In the third quarter of 2024, revenue increased by 46.7% year-on-year to 1.899 billion yuan; net income adjusted increased by 41.2% year-on-year to 0.384 billion yuan; adjusted EBITDA increased by 40.0% year-on-year to 0.532 billion yuan.

Atour lifestyle holdings maintained high growth despite the high base, with multiple institutions such as Pu Yin International, Sinolink Securities, and HTSC giving Atour a buy rating. HTSC raised Atour's target price to $38.62.

Multiple institutions have given Atour a "buy" rating.

From the recent financial reports released by hotel groups, the hotel industry has shown a clear trend of differentiation. On one hand, the era of traditional full-service international hotels 'lying down to win' is gradually fading, with varying degrees of brand premium decline. On the other hand, Chinese local chain hotel brands have further breakthroughs in the mid-to-high-end market, showing better overall growth.

With this 'base' in the mid-to-high-end market, Atour has entered an upward cycle, exploring its own unique path in hotel network expansion, multi-brand matrix, and new business format scenes.

Policy and market dual-drive accelerate hotel network expansion.

A report from the China Development Research Institute pointed out that this year, China's service-oriented consumption is showing a trend of bottoming out and rebounding, releasing enormous growth potential. Since last year, relevant departments have been continuously exerting efforts at the policy level to promote the transformation and upgrading of the Chinese tourism market. At the same time, the proportion of time spent on hotel lodging throughout the entire journey continues to rise, with strong consumer demand.

Driven by the dual wheels of policy bullishness and market demand, Atour Hotel's network expansion accelerated further this quarter. The number of new hotels opened in Q3 reached 140, a year-on-year increase of 72.8%, once again breaking the record for the number of openings in a single quarter. As of the end of September, the number of operating hotels has reached 1533, with 732 projects in the pipeline awaiting development, and the willingness of franchisees to sign contracts continues to strengthen.

Industry experts believe that compared to the over 70% hotel chainization rate in the USA, China's hotel chainization rate is only 40.95%, still with a large penetration space. The expansion speed of mid-to-high-end chain hotels is fast, and Atour is a strong force in the mid-to-high-end brand, with ample long-term growth potential.

The brand matrix is gradually improving, creating a benign cycle of investment returns.

This quarter, Atour further improved its hotel brand matrix, and in October, it released the high-end brand, Sah Hotel. Faced with the current structural dilemma of traditional full-service high-end hotels, Sah Hotel solves the problem of low efficiency through "service selection", standardizing the most demanded personalized services for users, bringing premium and operational efficiency improvements, with the potential to create a more profitable high-end hotel UE (Unit Economics) model.

Atour 4.0's strong store expansion further consolidates Atour's leadership in the mid-to-high-end sector. Currently, 6 hotels have opened, with a rapidly increasing occupancy rate, over 60 projects in the pipeline, and an ample reserve of high-quality projects.

Atour's layout in the mid-range market also further unleashes its competitive advantages. Light Home 3.0 performed strongly in the third quarter, signing a total of 38 new projects, with the signing rate continuously exceeding 20%. As of the end of September, the number of operating Light Home 3.0 hotels has reached 76. The opportunities brought by the upgrading of core business district properties will further enhance the market space for Light Home 3.0.

With the launch of the new brand Sah Hotel, as well as the accelerated replication of Atour 4.0 and Light Home 3.0, Atour's multi-brand lineup is becoming increasingly clear, meeting the needs of different consumer groups through the combination of luxury, high-end, mid-to-high-end, and mid-range brands. Looking at the investment return cycles of its various brands, they all possess a leading advantage in the same category of brands.

Build a barrier to deep sleep experience and enhance growth certainty.

Affected by the high base brought by the strong demand for domestic summer travel last year, as well as factors such as adverse weather in the third quarter of this year, the hotel industry is facing significant pressure on its operational indicators in the third quarter of this year. Despite the performance pressure, Atour has demonstrated strong operational resilience.

The financial report shows that in the third quarter, Atour Group's RevPAR (average revenue per available room) was 380 yuan, ADR (average daily rate) was 456 yuan, and OCC (occupancy rate) reached 80.3%, with a stable occupancy rate performance.

During the reporting period, Atour's retail business GMV increased by 107.7% year-on-year to 0.566 billion yuan, and Atour Hotels and Atour Planet have recently completed the interconnection of their membership systems and point benefits. The deep sleep brand image brought by retail explosive products will promote the increase in hotel repeat stay rate; at the same time, the sticky flow brought by member interconnection will also provide a stable support for the long-term growth of the hotel business.

Atour has created a deep sleep scene ecosystem through the layout of 'hotel + retail'. Whether it is the setting of deep sleep rooms and floors in hotels; or the hot-selling Atour Planet deep sleep series pillows and duvets, creating a consistent and coherent sleep experience 'at home' and 'on the go', establishing a differentiated experience barrier.

Conclusion:

In general, the rise of domestic chain brands in China is an unstoppable trend, and focusing on user experience while balancing operational efficiency is the key to success. This is also a key reason why Atour has emerged as a rising star.

From the performance report, Atour's operational value and resilience are worthy of recognition, and its competitive barriers have been basically established. Since Atour proposed the 'China Experience' strategy, the 'China Experience' has been continuously enriched, extended, and explored in the hotel and retail sectors.

Atour Lifestyle Holdings has also actively implemented a dividend policy this year, with management delivering strong confidence to the outside world and bringing substantial returns to investors. For investors, Atour's intrinsic value is expected to continue growing in the future, which is undoubtedly a signal worth looking forward to.

Choose a 'good track', make a 'good layout', and sketch out a 'good blueprint'. In the changing market supply and demand environment, it can also open up an 'upward cycle'.