Jinjiang Co., Ltd. (600754) 2019 Interim Report Review: Newly opened stores and contracted stores speed up and set a new high and mid-end Q2 improvement. The rate of improvement improved significantly.
Event: Company Announcement: Revenue of 71H1 reached 71.43 ppm, a ten-year increase2.93%, of which Q1 / Q2 growth rate is 2 respectively.66% / 3.18%; net profit attributable to mother 5.68 ppm, an increase of 12 in ten years.78%; net profit deducted from non-return to mother 3.580,000 yuan, an increase of 13 in ten years.48%, of which, Q1 / Q2 growth rate is 2 respectively.45% / 16.58%; net cash flow from operations 6.49 trillion, down 57 each year.90%, EPS is 0.59 yuan / share.The abbreviation of the company will be changed from “Jinjiang Hotel” to “Jinjiang Hotel” to “Jinjiang Hotel”, and the abbreviation of the Hong Kong-listed company of the controlling shareholder of the company will be changed from “Jinjiang Hotel” to “Jinjiang Capital”. Opinion: Affected by the decrease in same-store operating data, revenue growth indicators, improved operating efficiency and reduced financial expenses improve profitability.At the core of the report, the company realized revenue 71.4.3 billion / + 2.93%, deducting non-attributed net profit3.58 ppm / + 13.48%, EBITDA is 13.68 ppm / + 4.96%; limited service hotel business realized income of 70.26 ppm / + 2.94%, of which, income in mainland China reached 50.6.5 billion / + 4.49% (upfront service fee income / +1.37%, continued franchise fee income / +18.93%), income from mainland China19.61 ppm / -0.85%, food and catering business income1.17 ppm, a ten-year increase2.78%; 19H1 hotel data by series: In terms of revenue, Louvre Asia -0.13% / Jinjiang Star / -11.39% / fashion journey-3.5% / Louvre-0.08% / platinum 3.27% / Vienna 15.65%; in terms of net profit attributable to mother, Louvre Asia 147.55% / Jinjiang Star / -35.20% / Fashion Journey -31.85% / Loufl-21.91% / platinum 118.16% (excluding the expected increase in fair value changes of Yilong with the same process) / Vienna14.60%. Judging from the consolidated income statement data of the limited service hotel business segment, the company’s franchise revenue accounted for a rapid increase and its expense ratio improved.19H1 franchise revenue accounted for 37.42%, an increase of 1 per year.36pct, 19H1 Due to the increase of costs such as labor costs, the gross profit margin decreased by 1.01pct, revenue decreased and sales management expenses decreased, net margin was 8.16%, an increase of 1.39 points. In 19H1, new stores and contracted stores accelerated, and mid- to high-end brands continued to make efforts, and core mid-to-high-end brands opened stores faster.In total, the company reported 660 newly opened hotels (548 in the same period last year), 254 hotels opened and withdrawn, and a net increase of 406 hotels (341 in the same period last year). Of these, 15 were directly-managed hotels and 421 were added to franchise hotels.The number of models decreased by 39, and the number of mid- to high-end increased by 445. At the end of 19H1, there were 997 directly operated stores, with 113,509 rooms and a space ratio of 14.56%, down 1 from the beginning of the year.19pct; 2,908 mid-range hotels, with 355,279 rooms, with mid-range hotel rooms accounting for 45.58%, an increase of 3 earlier.03pct; 4,035 stores have not been opened (437,762 rooms). It is expected that over 80% of the rooms will be mid- to high-end, which will provide protection for new stores in the future. In 19Q2, the overall operating data in China continued to decline, and the improvement in the occupancy rate narrowed. The number of overseas hotels increased substantially, and Q2 improved.In 19H1, the overall annual RevPAR of hotels in China increased by zero.68%, mid- to high-end and economical RevPAR decreased by 4 respectively.94% and 6.22%, the overall RevPAR growth is mainly increased by the proportion of high-end ADR mid-range rooms; 19Q1 / Q2 overall RevPAR increased by 1.15% / 0.26% (ADR increased by 7.2都市夜网8% / 4.94%, OCC ranked 4th.27 points / 3.55pct); From the same store data, the decline rate of 19Q2 time growth rate has narrowed compared with Q1, 19Q2 same store ADR continued to decline, 19Q2 mid-range same store RevPAR reduced and narrowed, the economy was affected by the same store ADR growth negatively affected the same store RevPAR acceleratedDownward, the overall same-store RevPAR benefited from the improvement of the mid-range and the increase in the proportion. The decline in Q1 narrowed earlier; the overseas hotels, overall, grew relatively steadily, and Q2 improved. Profit forecast and investment grade: 19H1’s new stores and contracted stores have improved compared with the same period of the previous year, with outstanding performance and a new high. The same-store data in 19Q2 has improved with the improvement of the mid-to-high-end margin and the proportion of the company.Proportion of high-end guest rooms and significant advantages in brand and geographical distribution; carry out the construction of “one center, three platforms”, optimize resource allocation, promote deep integration, and steadily advance internal integration; in addition, good cash flow continues to be used to repay and still reduce financial expenses and reporting expensesExpenditure has improved, and profitability has improved. We slightly raised our profit forecast for 19-21, and we expect EPS for 19-21 to be 1.25/1.43/1.69 yuan, PE corresponding to the closing price on August 30, 19 were 19/17/14 times, maintaining the level of “prudent increase”. 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.