Key takeaway

According to the company’s 2025 earnings results, it achieved a revenue of RMB13.811 bn in 2025, a YoY decrease of 1.79%; a net profit attributable to the parent company of RMB925 million, a YoY increase of 1.58%. It showed resilient performance, improved operating efficiency, and obvious cost reduction and efficiency enhancement. The 4Q25 RevPAR reversed the negative YoY growth in every quarter since 1Q24. On the brand side, it focuses on the "12+3+1" strategy, continuously promoting the development of hotels of various grades and positionings, continuously iterates around the advantages in the core industrial chain, expands through the dual paths of "stock renewal" and "leisure vacation". The full-year plan is to add 1,200 newly opened hotels and 1,800 newly signed hotels.

Event

The company released its 2025 earnings results. Its achieved a revenue of RMB13.811 bn in 2025, a YoY decrease of 1.79%, a net profit attributable to the parent company of RMB925 million, a YoY increase of 1.58%.

Thesis

Resilient performance, improved operating efficiency, and obvious cost reduction and efficiency enhancement

Risks:

1. The mid- and mid-to-high-end hotel segments face fierce competition for brand mindshare. If the company lags behind other leading brands in building a matrix of mid-end and higher-tier hotel brands, it may affect the profitability and expansion of its mid-to-high-end brands in higher-tier cities, impacting the overall expansion of the hotel;

2. The hotel industry still faces pressure on both the supply and demand sides in recent years. If the overall operational efficiency of the chain hotel industry does not recover well, it may affect the company's RevPAR and other performance metrics, thereby impacting its overall revenue and earnings;

3. Store expansion faces intensified competition for site selection, along with the impact of relatively abundant overall supply in the current domestic market. As a result, rebranding has become the dominant form of expansion. If competitiveness in rebranding is insufficient, it will jeopardize the overall store opening and net store addition targets.