Beijing Brigade Hotel (600258) Third Quarterly Review

Beijing Brigade Hotel (600258) Third Quarterly Review
Event: The company released the third quarter report of 2019, and the company achieved revenue of 62 in the first three quarters.300 million, down 2 a year.2%, of which the hotel operator realized revenue of 47.500 million, down 4 every year.8% of the hotel management business achieved revenue 11.5 ‰, an increase of 9 in ten years.5%, the scenic area operation business realized revenue 2.5 ppm, a ten-year increase of 2.6%.The company maximizes profits10.4 ‰, a decrease of 10 per year.3%, of which the total profit of the hotel business is 9.0 ‰, a decrease of 12 per year.1%, the profit of the scenic spot business is maximized1.4 ppm, an increase of 3 per year.7%.The company achieved net profit attributable to its mother in the first three quarters.200 million, down 10 a year.3%, realized non-net profit attributable to mother 6.90,000 yuan, an increase of 3 in ten years.8%, EPS is 0.73 yuan / share. Opinion: The sales + management expense ratio is flat month-on-month.In Q3 2019, the company’s sales management fee subsidized TTM sales + management fee subsidy 77.8%, the same as Q2’s TTM sales + management expense ratio.We previously judged that the company’s TTM sales + management expense ratio in the hotel boom performance gradually decreased to zero every quarter.7%. Now that the industry has passed the boom period, the revenue growth rate has suddenly even declined.Although the company controls costs through some methods, such as using technology to optimize the ratio of people to housing, closing stores to reduce labor costs, and saving energy costs, etc., it remains to be seen whether the company’s expense rate will continue to decline in a downward industry environment. The overall RevPAR of the company is reduced, and structural optimization is expected to improve performance.RevPAR for all hotels in the company’s Q3 decreased by 3 year-on-year.7%, of which the direct-operated hotel RevPAR dropped by 2.At 7%, the franchise-managed hotel RevPAR dropped by 4.2%.Budget hotel RevPAR drops by 5 per year.7%, mid-to-high end dropped 9.0%, the cloud hotel dropped by 10.3%.The company’s overall average house price rose slightly (+0.2%), the occupancy rate fell by 3.4%. According to mature store data, RevPAR of all hotels in the company’s Q3 dropped by 6.1%, of which directly operated RevPAR dropped by 5.At 5%, RevPAR for franchise management dropped by 6.3%.The Q3 company’s budget hotel RevPAR dropped by 6 year-on-year.At 5%, RevPAR for mid- to high-end hotels dropped by 5.2%.The average house price of mature stores has dropped by 2.6%, the occupancy rate fell by 3.1%.Affected by macroeconomics, we judge that RevPAR will continue to decline in the future in the restructuring of the hotel industry. The structural improvement of the hotel group will help the company’s RevPAR performance. Continue to develop mid- to high-end businesses and take the asset-light route.The company opened 197 new hotels in Q3 2019, including 190 franchise stores, accounting for 96.4%, 73 new high-end hotels were opened, accounting for 37.1%, mid-to-high-end, franchise business continued to grow.In the first three quarters, the company opened a total of 431 newly opened hotels (75 newly opened in Q1 and 159 newly opened in Q2). There are 663 non-opened and under contracted stores. The company will basically complete the guidelines for newly opened 800 new hotels. As of September 30, 2019, the company had a total of 4,174 hotels (1 overseas), with a total of 402,158 opened, and the mid- to high-end ratio reached 24 based on the number of rooms.2%, the proportion of franchising reached 79.4%. In July 2019, the company’s joint-stock company, Comma Cayman, completed the transaction of comma apartment assets to replace the equity of Shanghai Ruiying Enterprise Management Co., Ltd. In the future, 47 stores of Comma Apartment will no longer replace the company’s hotel statistics. Increased industry risks.Beginning in 2016, the contraction of the hotel industry’s supply side and the growth of 西安耍耍网 the demand side are leading the upward movement of the hotel cycle.At present, the hotel’s supply side maintains relatively stable growth, and the demand side’s growth rate continues to decrease. As a result, the national hotel market has seen that the demand growth rate has been lower than the supply growth rate, and the industry has approached from “supply and demand” to “oversupply.”We judge that the trend of demand growth of conventional hotel industry over supply growth has been formed. The duration of the transition, coupled with hotel accommodation rates, average room rates, and the average of three operating parameters of RevPAR have shown negative growth, so the hotel industry is already in a downward cycle.In the industry’s down cycle, increasing the proportion of franchising and franchising will resist industry risks to a certain extent.The company’s overall franchise room accounted for 79.4%. Profit forecast and rating: Affected by the macro economy, the high-speed growth period of the hotel industry’s RevPAR has ended, so we adjusted our forecast for the industry’s RevPAR growth rate in the next 4 years. After adjusting for 2019?In 2022, they will be -4% /-5% / 0/0 (the original assumption was 0 / -5% 0/0).We expect the company to achieve operating income of 81/81/80 trillion in 19/20/21 and net profit attributable to mothers7.8/7.8/7.10,000 yuan, the corresponding diluted EPS is 0.79/0.79/0.72 yuan / share, maintaining the “overweight” rating. Risk factors: the risks of macroeconomic growth fluctuations and the industry’s slower growth than expected (including policy risks), inflation risks, industry competition risks, franchise store risks, exchange rate risks, and other force majeure factors.

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