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BTG Hotel (600258): Affected by the economy in the second half of 18 years, opening stores in 19 years to accelerate expansion and growth

BTG Hotel (600258): Affected by the economy in the second half of 18 years, opening stores in 19 years to accelerate expansion and growth
Investment highlights: The company announced its 2018 report: the company achieved revenue of 85 in 2018.39 ppm, an increase of ten years.45%, slightly lower than the 870,000-88,800 yuan of the 2017 guidance; net profit attributable to mothers8.5.7 billion (+35.84%), basically in line with our navy’s expectations (8.7.8 billion); deduct non-net profit 6.900 million (+15.99%), the non-recurring income is mainly from the sale of Yanjing Hotel and Shouqi shares1.400 million investment income.Q4 single quarter revenue +3.1%, deducting non-net profit -48.41%, mainly due to the company’s provision of RMB 81.9 million for impairment of Nanyuan shares.The company’s financial expenses improved significantly in 2018, reducing 50.58 million yuan in 2017, the company’s cash flow is excellent, and the expense ratio after repayment of the loan at the time of acquisition has improved significantly. Rujia basically met expectations in 2018, and its operations were affected by the economy in the second half of last year.Home income in 2018 was 71.540,000 yuan, +1.45%, achieving a net profit of 8.110,000 yuan, +25.54%, our democratic expectation is 8.4 billion, basically in line with expectations, of which the net profit of homecoming mothers in the second half of the year +20.3%, 34% in the first half.2%.Q4 Same-store data economy RevPAR + 1.5%, high-end +0.3%, while Q3 is 2 respectively.4% / 1.4%, including mid-to-high end ADR-1.5%, indicating the relative error of the impact of weakened business travel activities on the itinerary of mid- to high-end hotels.In terms of ADR, economical +3.7%, high-end +3.2%, the sustained increase in economic prices, high-end and Q3 basically unchanged.Therefore, we observe Q4 same-store data economy OCC-1.9%, middle and high end -2.4%, the economic housing rate has been reduced and narrowed, and the mid-to-high end continues to accelerate the transition. The change in the stay rate is obviously related to the different price increases of the economy and mid-to-high end. The company plans to accelerate store openings in 2019, with mid- to high-end accounting for more than 50%.In 2018, the company opened 622 new stores, of which 40% were mid- to high-end (if the management output hotels were demolished, 52% were newly opened mid-to-high-end stores, and 50% of mid-to-high-end plans in 2017 were completed), with a net opening of 337.In 2019, we plan to open 800+ stores, 50% + of which are high-end.The store opening guidelines exceeded expectations and the mid- to high-end speeded up, but at the same time the company stated that it would increase the conversion of existing hotels, so it is expected that the number of closed stores will also increase, and the net opening is expected to be around 400-450.As of the end of 2018, mid- to high-end accounted for 19.23% (+5.01pct). At present, the proportion of mid- to high-end in the three major hotel groups is still at a relatively relative level, and the conversion space ratio.The company’s latest announcement plans to create a new hotel brand with a joint venture with Hyatt. The first 武汉夜生活网 batch of direct-operated stores (Beijing, Shanghai) is planned to land in 2019. It is expected to open in the first half of 2020. We think it will complement the company’s competition in the mid-marketforce. Profit forecast and investment suggestions: The hotel operating data for January-March has not significantly improved, and the first quarter report is expected to be flat.The good transfer of financial and economic data into the market is expected to heat up the hotel industry in the second half of the year, and it is currently in the expected upgrade stage. Therefore, the poor annual and quarterly reports have been largely accepted by the market.In 2019, the planned revenue is 860,000-88,000 yuan, and 800+ stores will be opened, of which 50% + are mid-to-high end.As the company plans to accelerate the opening of stores, and it is expected to stabilize in the second half of the year, we raised the 2019/2020 forecast and added a profit forecast for 2021. It is expected that the company will achieve net profit attributable to mothers in 2019-2021.91/12.38/15.2.6 billion (originally expected to be 9 in 2019/2020.60/11.06 million yuan), EPS is 1.01/1.26/1.56 yuan, corresponding to PE is 22/18/14 times, the company’s equity incentive plan has been approved by the SASAC, the company’s operating efficiency is expected to further improve, maintaining the “overweight” rating.