BTG Hotels (600258) Q1 2019 Review: Q1 operating data accelerates downward and short-term pressure is still expected to improve in the second half of the year

BTG Hotels (600258) Q1 2019 Review: Q1 operating data accelerates downward and short-term pressure is still expected to improve in the second half of the year
Key Investment Events: The company announced operating income for the first quarter of 1919.44 ppm, an increase of 0 in ten years.99%, net profit attributable to mothers was 73.96 million yuan, a year-on-year decrease.9%, net profit after deduction is 56.24 million yuan, and it will decrease by 3.04%, blacks earn 0.At 08 yuan, there were 75 new stores opened in 19Q1. The overall RevPAR and same-store RevPAR dropped by 0.5% and 3%.  Opinion: Q1RevPAR accelerates the downward impact of overlapping store closures and upgrades, and both revenue and profit growth occur.At the core of the report, the company achieved revenue 19.44 ppm, an increase of 0 in ten years.99%, the earlier 18Q3 / Q4 growth rate declined; of which, the hotel segment achieved revenue of 17.73 ppm, a ten-year increase of zero.67%, such as the home and first travel stock hotel revenue increased by 0.42% and 2.57%, each income ratio is 88.07% and 11.93%, such as the new home opened a contribution of 35.14 million yuan, but affected by closed stores and upgrades, direct sales revenue decreased by 28.64 million yuan; benefit from the attraction ticket retention ratio increased from 40% to 50% and attractions ticket purchases increased by 1.9%, the Scenic Spot realized revenue 1.700 million, an annual increase of 4.49%.Company maximizes profits1.580,000 yuan, an increase of 2.56 million yuan, an annual increase of 1.65%, incremental composition: 1) hotel business decreased by 6.96 million yuan, 2) attractions business contributed 9.52 million yuan, 3) repayment of bank loans saved financial expenses and contributed 10.4 million yuan; Home Inns Group achieved net profit reduction of 98.37 million yuan in 19Q1,The earliest drop is 7.85%, mainly due to the decline in RevPAR, is also the first quarterly profit margin for the first time since privatization; 19-year revenue target is expected to be 86-88 trillion, a growth rate of 0.71%?3.06%, and strive for the company’s mid-to-high-end hotel revenue to account for 35% of the hotel sector (18 years’ ratio was 32.6%).  Q1 The new store opening is stable, and the gradual opening is expected to accelerate.As of the end of 19Q1, the number of company hotels was 4,061 (including 1 overseas), with 398,357 rooms; 75 new stores opened in 19Q1 (84/135/156/247 for 18Q1 / Q2 / Q3 / Q4 respectively), with a net opening of 12 (18Q1 / Q2 / Q3 / Q4 are 21/55/70/191 respectively), of which 4 are direct-operated stores, 13 are economical / 28 mid-to-high-end / 34 are managed and exported, such as newly opened stores and net opened stores, respectivelyThere were 70 and 10 stores; the proportion of the company’s directly-operated stores further decreased to 22.7%, a decrease of 0 from the beginning of the year.15pct; the number of high-end hotels is 741, accounting for 18.2%, the number of rooms accounts for 22.4%, an increase of 0 from the beginning of the year.49pct; As of 19Q1, the number of contracted and unopened stores is 568, an increase of 38 earlier.  The overall RevPAR in Q1 showed an accelerated bottom, and it is expected that the second half of the year will usher in improvement.The operating data for the first quarter did not improve. It is expected to be related to the lag in business activities. The economy is stabilizing. The economic performance is mid-range, the dwell rate is accelerating downward.Looking at the quarterly data, 17Q1 / Q2 / Q3 / Q4 / 18Q1 / Q2 / Q3 / Q4 / 19Q1 RevPAR increased by 4 respectively.5% / 6.7% / 8% / 7.2% / 4% / 5.6% / 4.1% / 2.8% /-0.5%, same-store RevPAR increased by 2 respectively.90% / 2.50% / 4.90% / 5.90% / 6.50% / 4.30% / 2.4% / 1.4% /-3%; in terms of types, both stores have negative growth, the economic type is relatively small, and the mid-to-high-end rapid expansion and regional sinking have been negative growth for six consecutive quarters, and the same store growth has cracked; the original stock of BTGHotel RevPAR increased slightly by 1.6%, mainly due to the increase of 12 in the budget hotel RevPAR.6%.  In 19 years, three major trends were favorable.1) The joint venture with Hyatt Hotel Group focused on the mid-to-high end consumer market will make up for the shortcomings of Home Inns in this field; 2) The launch of the Beijing State-owned Assets Supervision and Administration 南京夜网 Commission, which has been approved to expand the stock incentive plan, is adopted in principle, covering a wide range of incentive objects and a long time spanIt is conducive to fully mobilize employees’ enthusiasm and enhance competitiveness during the transition period of the hotel industry; 3) Speed up the development team member size and incentives, and the 19-year store opening plan has significantly accelerated.  Earnings forecast and investment grade: Q1 operating data has not improved, quarterly China Living Q1 same-store existing indicators are expected, and the first quarter of economic data is stabilized and warmed up. It is expected that the operating data in the second half of the year is expected to stabilize and rebound, and the overall RevPAR is integrated in the mid-to-high-end ratio.Under the background of improvement and housing price growth, it is expected to maintain an upward growth trend. At the same time, new and net openings will accelerate significantly and will increase in 19 years, effectively hedging the reduction in occupancy rate. In 19 years, direct-operated stores entered the transformationThe operating efficiency of the upgrade cycle increased, the proportion of high-end and franchise income increased, and the net interest rate steadily increased. In 19 years, Beijing will usher in a six-month World Horticultural Expo, which is expected to boost the hotel industry in the region; therefore, the company’s equity incentive assumptions have been successfully implemented.Mobilize the enthusiasm of employees, improve competitiveness and operating efficiency during the transformation of the hotel industry, and cooperate with Hyatt to make up for the short-term brand’s short board. EPS is expected to be 0 in 19-21.96/1.13/1.29 yuan, the corresponding PE on April 29 is 21/18/16 times respectively, maintaining the “prudent increase” rating.  Risk reminders: Macroeconomic growth rate, store expansion and revpar growth rate are less than expected, management improvement and internal integration are not progressing as expected, goodwill impairment losses, state-owned enterprise reform progress is less than expected, shareholders reduce risk, etc.


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