Incident: Jin Jiang Hotel released its 2024 quarterly report. In the first quarter of 2024, the company achieved operating income of 3.26 billion yuan, a year-on-year increase of 6.77%, a net profit of 190 million yuan, an increase of 34.56% over the previous year, and realized deducted non-net profit of 62.23 million yuan, a year-on-year decrease of 31.19%. The company recounted the financial data for 2023. The data after the restatement included the financial data of Wehotel and Jinjiang Liquor Management.
Domestic hotel operations declined slightly year over year, putting pressure on the short term. In the first quarter of 2024, the limited service hotel chain business in mainland China achieved revenue of 2,215 billion yuan, +5.97% year over year, of which upfront service fee revenue was 123 million yuan, an increase of 121.58% year on year, and revenue from continuous franchise and labor dispatch services was 963 million yuan, +7.58% year over year. The domestic limited-service hotel RevPar was 145.25 yuan/room, -1.55%; ADR was 242.41 yuan/room, +1.3% year over year; OCC was 59.92%, -1.74 pcts year on year. The full-service hotel RevPar was 209.59 yuan/room, -5.36%; ADR was 500.09 yuan/room, +5.88% year over year; OCC was 41.91%, -4.98pcts year on year.
The number of stores opened has rebounded year on year, and the number of newly opened stores is mainly mid-range. In the first quarter of 2024, 222 new hotels were opened, 75 hotels were opened and withdrawn, a net increase of 147, including 1 new full-service hotel.
Among the net increase in stores, there are 5 budget hotels and 141 mid-range hotels, accounting for 95.92% of the mid-range stores. Huanpeng, Lifeng, and Vienna international brands account for a relatively high number of stores. Considering the company's net increase of 111 stores in the first quarter of last year, the pace of store expansion has picked up somewhat. (1,200 new businesses are planned to be opened in 2024) The series of reforms continues to advance, and the progress of implementation of the reforms is worth paying attention to. Since the second half of 2023, the company has continued to promote a series of reforms, including optimization of overseas debt structures, comprehensive membership system upgrades, internal organizational structure adjustments, etc., which are expected to promote the high-quality development of the company.
Profit forecast: The company is expected to achieve revenue of 168.5/182.6/19.26 billion yuan in 2024-2026, an increase of 15%/8.4%/5.5% year-on-year, and achieve net profit of 12.5/15.0/ 1.67 billion yuan, an increase of 24.6%/20.0%/11.2% year-on-year. Considering that the company is in a critical period of a series of reforms, if the reforms are successfully completed, the company's performance is expected to further improve and maintain the “gain” rating.
Risk warning: store expansion falls short of expectations; demand-side recovery and growth falls short of expectations; other risks