逆势拓店彰显争先决心，曙光将至业绩弹性可期

BTG Hotels (Group) Co., Ltd.（600258） Equity Research·Company Research·Hotel & Catering 1 / 9 东吴证券（香港） 请务必阅读正文之后的免责声明部分 [Table_Main] BTG's expansion in the industry downturn shows its determination, and its high profitability elasticity is going to manifest during consumption recovery Outperform (Maintain) Forecast & Valuation 2021A 2022E 2023E 2024E Revenue (RMB mn) 6,153 5,281 6,803 8,113 Growth (YoY %) 16% -14% 29% 19% Net profit (RMB mn) 56 -297 831 1,205 Growth (YoY %) 111% -633% 380% 45% EPS (RMB) 0.05 -0.27 0.74 1.08 P/E (X) 466.62 - 31.26 21.57 Key words: # reversal effect # market share increase Investment Thesis ◼ The third largest hotel group in China: affiliated with BTG Group of Beijing SASAC, BTG Hotels (group) is a listing platform for its strategic hotel business. After the privatization of Home Inns in 2016, BTG Hotels gained complementary advantages and resource integration in the cooperation with Home Inns, bringing upgrades to its overall business. Through subsequent M&A, asset replacement, independent & cooperative launch, and other forms of hotel brand expansion, BTG Hotels currently owns a total of 34 hotel brands by Sep 2022, fully covering high-end, middle & high-end, middle-end, economy, leisure & vacation, and other hotel products. BTG Hotels operates and manages 5,888 hotels with 193,000 rooms in China, being the third largest hotel group in China. ◼ We expect demand recovery of hotel industry in the post-pandemic era, after the shrink of supply-side capacity during the pandemic. Hit by recurring pandemic, the total number of hotels/rooms significantly declined since 2020, and the total number of hotels declined to 279,000/252,000 (-17%/-10% yoy) in 2020/2021. Individual hotels generally are less resilient towards risks than chain hotel groups. The temporary or permanent quit of individual hotels is likely to strengthen the management and referral traffic of chain hotel groups. We see the market share rise of both chain hotels in the hotel industry and leading hotel groups in the chain hotel market. From 2019 to 2021, the market share of chain hotels rose from 26% to 35%, with CR3 of hotels/rooms increasing from 5.5%/10.4% to 9.7%/16.9%. As per the operating data of three major hotel groups in 2022, when OCC (Occupancy rate) only recovered to 70-80% of 2019, the ADR (Average Daily Rate) already recovered to 90-100% of 2019, confirming a significant improvement of the competitive landscape. We expect profitability elasticity of ADR in the post-pandemic era with the demand recovery, driving BTG hotels to significantly exceed the pre-pandemic performance. ◼ With higher proportion of self-operated hotels, BTG enjoys a higher profitability elasticity than peers. The share of self-operated hotels for BTG reaches 11.9%, ranking the highest among three leading hotel groups. Hotel operating income accounted for nearly 70% of BTG's overall revenue during the pandemic, leading to higher profitability elasticit