华住集团（HTHT）：每间可售房收入（RevPAR）改善趋势；休闲旅游是关键驱动因素

2023A2024A2025E23,891.024,775.06,874.06,820.07,686.0 2026E26,291.08,401.0 Thomas Chong * | Equity Analyst852 3743 8016 | thomas.chong@jefferies.comZoey Zong * | Equity Analyst852 3743 8163 | zoey.zong@jefferies.com The Long View: H World GroupInvestment Thesis / Where We Differ•H World is a leading hotel operator in China, and its shares trade at ameaningful premium over peers on its strong track record of deliveringorganic growth and industry-leading RevPAR.•The company remains determined to develop soft brand hotels withstronger alignment with H World standards and penetrate lower-tiercities, while digitalizing its Europe business.•We expect the company to ride on the recovery trend post pandemic.Base Case,$43.00, +18%•H World makes progress in the upscalesegment. A fast rebranding pace helps HWorld to increase penetration in the high-endsegment to capture market share.•Recovery trend in the macro environment.•PT of USD43/HKD34 based on DCF valuation.Sustainability MattersTop Material Issue(s): 1) Ecological Impacts are the top ESG issue for hotels.The influx of touristand waste generated post risk to ecosystem and environment which may diminish the attractions fortourists. Environmental protection practices are key.2) Labor practice.Hotel is highly reliant on laborto operate the facilities. Low job satisfaction and high turnover could lead to increased expenses forhotels. It is crucial to provide a healthy and safe working environment.Company Target(s): 1)Continuously pay attention to global climate change, assess risks in a timelymanner, and take countermeasures to actively respond to a series of goals and plans, such as China’scarbon peak by 2030 and carbon neutrality by 2060.2)Aiming to reduce the environmental footprintof the business and to contribute the construction of a low-carbon society.3)Achieving sustainabledevelopment goals by enhancing corporate governance and decision-making capabilities.Qs to Mgmt: 1)What is the margin effect of the energy conservation measures?2)What steps haveyou taken or plan to take to safeguard employee rights and interests?Please see important disclosure information on pages 7 - 12 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Upside Scenario,$58.50, +60%•Meaningful recovery in RevPAR from astronger macro environment.•Continued strong hotel pipeline and faster-than-expectedramp-up in China hotelfranchising rate.•PT of USD58.5/HKD46.8 based on DCFvaluation. Risk/Reward - 12 Month View6055504540353025201520252024Downside Scenario,$20.00, -45%•Meaningful decline in RevPAR from anindustry oversupply situation.•Continued macro weakness and improvedindustry sentiment.•PT of USD20/HKD16 based on DCF valuation.Catalysts•Stronger-than-expected RevPAR growth.•Earlier-than-expected recovery for overseasbusiness.•Stronger-than-expected hotel developmentpipeline. 2 Key takeaways from conference call (continued).(9) 1Q25 is impacted by DH restructuring.HTHT highlights restructuring benefits to the group in the medium-to-long term. (10) Productupgrade leads to better blended RevPAR than same-store RevPAR. (11) Key strategies includehigh quality and scale. Hotel quality is more important than scale alone. (12) With good hotelsign-up and openings in 1Q, HTHT does not adjust its full-year opening target. (13) HTHT seesopportunities to reform the traditional mid-upper hotel segment. It focuses on tier 1-2 cities inorder to strengthen its brands. (13) Intercity Hotel number to reach over 100 by end of the year,and it pursues a multi-brand strategy in the mid-upper segment.Valuation and risks.We maintain our Buy rating and adjust PT to USD43/HKD34 (prior USD45/HKD36). Key risks include: 1) slower-than-expected RevPAR recovery; 2) slower-than-expectedEBITDA margin recovery; and 3) changes in the macro environment.Please see important disclosure information on pages 7 - 12 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Exhibit 1 - HTHT US: Income Statement.Income Statement (HTHT US)RMBmnTotal RevenueYoY % changeCost of revenueGross profitGross marginSales and marketing expenseGeneral and administrative expensePre-opening expensesNon-GAAP EBITDAYoY % changeNon-GAAP EBITDA marginNon-GAAP net incomeYoY % changeNon-GAAP net marginSource: Company, Jefferies estimatesPlease see important disclosure information on pages 7 - 12 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Exhibit 2 - HTHT US: Balance Sheet.Balance Sheet (HTHT US)RMBmnCash and cash equivalentsRestricted cashShort investmentAccounts receivablesAmount due from related partiesLoan receivablesPrepaid rentInventoriesOther current assetsTotal current assetsProperty and equipment, netIntangible assets, netLand use rightsLong-term investmentsGoodwillLoan receivablesOperating lease right-of-use assetsOther assetsDeferred tax assetsTotal non-current