Jinjiang Co., Ltd. (600754): REVPAR decline in April expands focus on tax cuts and fees

Jinjiang Co., Ltd. (600754): REVPAR 北京spa会所 decline in April expands focus on tax cuts and fees
Company News Company News Jinjiang Co., Ltd. announced hotel operating data for April 2019: Internal hotels: 1) Comprehensive RevPAR replaced 4.7% (Economy / Mid-Range -12.3% /-8.6%), a decrease from March 0.The decline of 6% expanded, mainly due to the high base and weak demand (STR data shows that the RevPAR of the hotel industry in April 18 increased by 7%.4%, the highest point of the year; Rev. 19 of the hotel industry in April 19th.9%, a decrease from March 3.The 7% decline has widened).2) ADR increased by half a year.7%, mainly due to the upgrade of the product structure, in fact, the economic and mid-range have reduced by 4% and 2% respectively; OCC replaced 6 can be replaced with 77%, and the change range is 3 months (reduction of 5 optional)expand.  Overseas hotels: Comprehensive RevPAR increased by 5.4% (economic / mid-range +2.0% / + 13.4%), ADR increased by about 1%, and OCC increased by about 3 percentage points.  Number of stores: As of the end of April 2019, the company has opened 7,716 hotels (85 net openings in April), including a total of 11,440 hotels (including a net increase of 188 in April).  Comments focus on macroeconomic trends.Macroeconomic indicators are closely related to business travel demand. The company’s business visitor accounts for about 60%. The weak economy will affect the long-term occupancy rate and drag on RevPAR performance.  In the short term, we expect the hotel industry to recover 南京夜网论坛 from May, but due to the recent trade frictions, we are cautious about the extent of the recovery and its sustainability.Follow-up attention to the stimulating effect of tax and fee reduction policies on hotel demand.  Estimates suggest that due to RevPAR’s growth rate, lower operating leverage or pressure on profit margins, we lower our 2019/20 profit forecast by 5% / 5% to 12.0/13.900 million.At present, the company’s A-share contradiction corresponds to a 20 / 17x P / E ratio of 2019/20.Maintain Neutral rating and lower A / B target price by 5% / 5% to 27.56 yuan / 2.21 US dollars, corresponding to 19/11 times price-earnings ratio in 2020, respectively, compared with the current feasible 10% / 8% upside.  Risk trade friction escalated, and the industry’s recovery did not meet expectations.