BTG Hotel (600258): Home-like business fell off in the off-season, focusing on industry marginal improvement

BTG Hotel (600258): Home-like business fell off in the off-season, focusing on industry marginal improvement
Event: On April 29, BTG Hotel released the first quarter report of 2019, and the company achieved operating income of 19 in Q1 of 2019.4 ppm / increase of 0.99%, attributable net profit of 73.96 million yuan / down 1.9%, net profit after deduction is 56.24 million / down 3.0%, budget benefit is 0.08 yuan / down 1.8%. Comments: 1. The hotel demand is weak in the off-season, and the performance is flat for many years.Q1 revenue increased slightly by 1%. As the company closed some of its direct-operated stores, most of the newly opened hotels were franchised stores, and some economical stores were closed and upgraded; net profit attributable to mothers was 7,396 million / down1.9%, decreased by 3 after deduction.0%, mainly due to Q1 is the off-season of the hotel, demand transformation breakthroughs, and economic consumption has not yet recovered, RevPAR extended a period. 2. The performance of Home Inns declined slightly, and the profit during the off-season reform was under pressure.Home Inns Group achieved revenue of 15 in Q1.600 million / increase 0.4%, profit budget 98.37 million yuan / down 7.85% is mainly due to the offset of Revega ‘s same-store and mid-range hotels with the same store RevPAR. Considering that Ruoji implemented 100 directly operated stores in Q1 to shut down and upgrade, the company ‘s operating potential has yet to be released. 3. The highest occupancy rate is the same, and the economical mid-range RevPAR is the lowest.For example, the same-hotel occupancy rate / average room rate / RevPAR of mature hotels that have been open for 18 months in Q1 has increased by -2.5pct / 0.1% /-3.0%, compared with the first four quarters (-1.9 points / 3.7% / 1.4%) again gradually.At least, Q1 is the off-season of hotel operation. Holidays have disrupted the demand for accommodation. Restructuring. Since the second half of 2018, the growth trend of economic consumption has not recovered.In terms of grades, the same-store RevPAR in the economy Q1 dropped by 2.4%, lower than Q4 (+1.5%), mainly due to the decline in occupancy rate; mid-to-high-end Q1 same-store RevPAR decreased by 6.8, below Q4 (+0.3%), both housing rate and house price are incorporated. 4, Q1 opened a stable store, the overall development towards the mid-range and franchise direction.Q1 company opened 75 new hotels (4 directly operated, 71 joined), sometimes slightly reduced, of which 13 were economical, 28 high-end, and 34 in other categories.Among the 28 newly opened mid-to-high-end hotels of the company, 1/3/19 of Yiyi / Home Inns Select / Home Inns & Travel respectively.As of the end of March 2019, the company had signed 568 unopened and contracted stores, and the new store had sufficient reserves. 5. The hotel business of the Headquarters of BTG is stable, and the profit of Nanshan Company has increased significantly.Q1 First Traveller Hotel contributed revenue 2.100 million US dollars, an annual increase of 2.At 6%, the economical RevPAR performed well.Q1 Nanshan Scenic Area has 193 visitors.540,000 people / increase 1.At the same time, the retention ratio of ticket income increased from 40% to 50%, and realized a profit increase of 9,878 million, and then an increase of 10.66%. 6, Q1 gross profit margin, financial expenses decreased sequentially.The company’s Q1 gross profit margin was 93.9% / down 0.6pct, selling expense ratio 70.6% / down 0.4pct, management expense ratio 13.2% / year is the same, Q1’s financial expenses are 3765 million US dollars, a decrease of 6.26 million times per year, and a decrease of 12.08 million yuan from the previous month. The main reason is that the company uses operating cash flow to repay some loans, and the income continues to decrease.The off-season of consumption and the economy has not yet recovered, to a certain extent, it has affected the growth of RevPAR, and at the same time, Home Inns has promoted the direct store upgrade plan, resulting in a slight decline in performance.RevPAR in the hotel industry grew rapidly in March-April, and Q2 is still expected to be under pressure. We believe that the real 南宁桑拿 improvement of the industry fundamentals will not be released until the second half of the year. For example, the economic upgrade and mid-range shop opening cannot be released, and the future growth momentum is rich.We slightly cut our profit forecast for 2019-2021 to 9.3/11.0/12.5 billion, an increase of 8% / 19% / 14% (after deducting the non-growth 24% / 20% / 14%), the corresponding PE is 22x / 19x / 16x, given a 19x 30x target assessment, maintaining “strong recommendation -A”grade. 8. Risk factors: The improvement of operating data is less than expected; the start is not up to expectations; the risk of lifting the ban is determined to increase.