First Travel Hotel released its quarterly report for the year 2022. 2024Q1 revenue was 1,845 million yuan/YoY +11.47% /vs2019q1 -5.05%, net profit to mother was 121 million yuan/YoY +49.83% /vs 2019Q1 +63.02%, net profit after deducting non-return to mother was 97 million yuan/YoY +102.19% /vs 2019Q1 +73.90%, and net cash flow from operating activities was 596 million yuan/YoY -33.82%.
Passenger flow in scenic spots continues to reach new highs to drive growth, and the profit margin of the hotel business has improved markedly. In terms of revenue, 2024Q1's hotel business revenue was 1.64 billion yuan/year over year +11.54% /vs 2019Q1 -6.96%, and scenic spot business revenue was 206 million yuan/YoY +10.90% /vs 2019Q1 +26.75%, of which the number of visitors to Nanshan Scenic Area in 2024Q1 was 2.47 million, an increase of 17.3% over the same period in 2023. Passenger flow hit a record high, driving the scenic area business revenue to continue to grow; in terms of total profit, 2024Q1's total hotel business profit was 51.8127 million Yuan/YoY +649.82% /vs 2019Q1 -21.60%, total profit from the scenic area business was 122 million yuan/year over year +5.65% /vs 2019Q1 +36.37%. Among them, the profit margin of the hotel business improved markedly due to the optimization of direct-run stores and store restructuring.
The year-on-year improvement in 2024Q1 ADR drove growth, and direct-run stores performed well. 2024Q1 RevPAR 131 yuan/YoY +0.1%, ADR 217 yuan/YoY +1.4%, occupancy rate 60.1% /YoY -0.8pct; excluding light management RevPAR 147 yuan/YoY +2.0%, ADR 233 yuan/YoY +2.2%, occupancy rate 63.4%/-0.1 pct YoY, among them economical, high-end, and light-managed RevPars were +1.3%/-2.1%, respectively; direct-run stores performed well, direct-run stores performed well, direct-run stores RevPAR 153 yuan/year over year +7.7%, ADR 242 yuan/year over year +3.1%, OCC 63.3% /year over year +2.7 pct, steady expansion of stores, and the store structure continues to improve. 2024Q1 companies opened 205 new companies/32 new businesses, including 36/66/103 new economic/high-end management/light management companies, 2/203 new direct/franchised stores, 4/36 new direct-operated/franchised stores; 1940 stores, of which 301/599/1039 economic/high-end and light management companies were 6/1934, respectively.
Investment advice: As a leading domestic hotel, First Travel Hotel has significant advantages in scale. The brand matrix is complete. The restructuring of the middle and high-end brand matrix is expected to enhance the Group's overall brand power, and the accelerated decline of light management will open up store space. The company's revenue for 2024-2026 is estimated to be 82/89/95 billion yuan, and net profit attributable to mother is 8.9/10.6/1.25 billion yuan, respectively. The corresponding PE is 19/16/14 times, respectively, maintaining a “buy” rating.
Risk warning: Recovery falls short of expectations, store expansion falls short of expectations, high-end brand development falls short of expectations, etc.