BTG Hotels (600258): Mid- to high-end hotels continue to look forward to the stabilization of Q4 operating data

BTG Hotels (600258): Mid- to high-end hotels continue to look forward to the stabilization of Q4 operating data
Report Summary: Events: The company released the third quarter report of 2019, and the company achieved operating income in the first three quarters of 62.3 ppm / -2.16%, attributable net profit 7.19 ppm / -10.27%, net profit after deduction 6$ 8.9 billion / + 3.75%, budget benefit 0.73. The increase in the proportion of mid- to high-end continues to support revenue, and the speed of opening stores in 2020 will not decrease.At the end of September, the number of mid- to high-end hotels opened by the company was 814, with a total of nearly 100,000 rooms, and the proportion of mid-to-high-end rooms was 24.2% / + 4.5 points., Middle- and high-end revenue accounted for 38% / +5.One, the three main products of mid-to-high end include Heyi Hotel, Home Inn Select and Home Inn Business Travel. The total number of mid-to-high end will be close to 1,000 by the end of the year.The company aims to open 800 stores in 2019, including 500 core brands. The company opened a total of 430 stores from January to September, closed 257 stores, and opened a net of 173. It is basically confirmed that this year’s opening plan will be successfully completed.The decrease in the number of stores closed in the first three quarters was mainly due to the transfer of statistical caliber of 47 stores of the company’s comma apartment and the termination or renovation of hotel properties.The number of stores to be opened in 2020 will not be less than that in 2019, and the specific needs to be adjusted according to market conditions, but the company’s focus on exhibitions will still focus on core brands. Q3 is still under pressure under multiple influences, and we expect Q4 operating data to stabilize.Q3’s overall same store Occ / ADR / RevPAR is -3.1 / -2.6% /-6.1% qoq Q2 such as home caliber operating data (-2.1 / -1.1% /-3.6%) continued to decrease.The operating pressure of Q3 comes from two aspects: the general environment and eventual factors. The hotel industry’s prosperity has weakened against the background of a weak macro economy. In particular, 重庆耍耍网 the demand for high-proportioned business and tourist sources is weak, and the overall business scale is severe.A celebration in Beijing caused some hotels in Beijing to fail to open, which affected RevPAR to a certain extent, and the high base effect brought about by the football incident that existed in the same period last year put pressure on Q3 performance.The company currently has 3314 franchised stores, accounting for 79.4% / + 2.9 points.Along with the increasing number of franchise stores, the company’s anti-cyclical capability has been continuously enhanced, and there is an internal performance end in the industry’s down range. To some extent, the direct-operated stores have been affected by the general environment.Since October, the company’s operating data is in a stable range, stronger than Q3 but still weaker than Q2. Considering that the weak data in 2018 occurred in November and December, the effect of the low base of Q4 is more obvious.There is a contradiction in data stabilization probability. Actively carry out work to improve efficiency and reduce fees, stabilize cash flow and reduce debt burden.The Q3 company’s sales / management / financial expense ratios decreased by 0.3 points / 0.1/0.39 points., The cost side presents a variety of aspects to varying degrees of inclusion.Stable and healthy operating cash flow effectively reduced the company’s increase in revenue; the company’s occupancy ratio gradually decreased with the support of technical upgrades, and the closed stores also reduced labor costs accordingly; the promotion of system automation has made the company to some extentCompression: Considering that the company’s old store upgrade and reconstruction project continues to advance, the maintenance cost is relatively reduced. Investment suggestion: Considering that the company’s proportion of mid- to high-end hotels continues to increase, and the number of consolidated franchise stores is increasing, the company’s anti-cyclical ability is constantly increasing, and its performance is somewhat influenced by the large environmental impact, and the industry’s concentration is optimistic under macro pressureSpeed up.With the background of underestimation and leading market share continuing to increase, we expect the company to achieve operating income of 88 in 2019-2021.13, 92.69, 101.9.8 billion; net profit attributable to mothers was 9.48, 10.97, 13.1.5 billion, EPS is 0.96 yuan, 1.11 yuan, 1.33 yuan, the corresponding PE is 17 respectively.46X, 15.09X, 12.59X.Maintain the “Recommended” level. Risk reminders: 1. Macroeconomic downturn 2. New store expansion slower than expected 3. Risk of franchise management