Financial report analysis of the hotel industry

1. The industry to be discussed this week is the hotel industry, involving 7 companies.

2. To analyze the quality of a company, first conduct financial report analysis:

Due to the need to improve time efficiency, not all company indicators are calculated this time: first look at whether the cash flow OCF It increases year by year, look at the cash ratio, if it is lower than 10%, look at the gross profit and accounts receivable turnover rate!

2.1. Cash flow will focus on two companies first (borrowing cash flow from operating activities, and the decline in cash flow reflects the decline of the company's trend)

600754 Jinjiang Shares, 000610 Xi'an Tourism

< p> 2.2. See if the cash ratio is less than 10%

600754 Jinjiang shares--cash ratio is 18.1%, 000610 Xi'an Tourism-cash ratio is 21.1%, 000610 Xi'an Tourism 600258 Beijing Tourism Hotel--- Cash ratio is 8.6, 000428 Huatian Hotel --- Cash ratio is 8.9

2.3. Look at the gross profit and accounts receivable turnover days of these four companies with low cash ratios

600754 Jinjiang Shares - gross profit 16.8%, accounts receivable turnover days 14.3, safety margin 81%

000610 Xi'an Tourism - gross profit 6.6%, accounts receivable turnover days 9, safety margin -39.2%

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00258 Beijing Tourism Hotel --- gross profit 94.6%, accounts receivable turnover days 8.1, safety margin 13%

000428 Huatian Hotel --- gross profit 55.2%, accounts receivable Turnover days 15.8

Eliminate 000610 Xi'an Tourism

2.4. Net interest rate indicator (MJ teacher indicator is greater than 2%)

000428 Huatian Hotel--Exclude -6.6 % 000524 Lingnan Holdings -2.9%

2.5. Excluding the asset-liability ratio higher than 80%

None

2.6. After excluding 3 companies, 4 companies remain

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600258 Beijing Tourism Hotel, 601007 Jinling Hotel, 000613 Dadonghai A, 600754 Jinjiang Shares

3. Analysis of the quality of a company, 40% of common sense of life and industry knowledge (this is indeed mine Weaknesses):

The hotel industry is more sensitive to changes in consumption power. Since the reduction of "three public services", the hotel industry has experienced fierce competition, and the fittest will survive in the industry. The recovery of the hotel industry has gradually started in 2015. Judging from the changes in the occupancy rate of star-rated hotels announced by the National Tourism Administration, by 2016, the occupancy rates of four- and five-star hotels reached 61.56% and 58.5% respectively, an increase of 5.15% within one year. , 3.22 percentage points. In 2016, the RevPAR of four- and five-star hotels increased by 0.58% and 1.08% year-on-year respectively, reaching 195.82 and 378.57.

The operating conditions of my country's hotel industry show two characteristics along with the economic cycle: 1) The hotel boom is roughly consistent with the economic cycle, but local fluctuations are large. Compared with the hotel history of the United States, which has been developed for nearly 90 years, (1929 to the present), my country's hotel industry has been developing for a short period of time (1997 to the present), and the industry has a large space for growth; 2) The industry benefits brought by economic growth have a more obvious promotion effect on high-star hotels. With the economic growth Growth, the expansion of high-star hotels is significantly better than that of low-star hotels.

The top ten hotel groups in China and their scale (2016)

As of the end of 2016, the top three hotel groups in my country are Jin Jiang, BTG Home Inn, Huazhu, and The number of companies reached 5977, 3402, and 3269 respectively, and their market shares reached 20.31%, 12.59%, and 11.17% respectively. In terms of market concentration, the market share occupied by the top three hotel groups further increased, from 40.1% in 2013 to 44.07%. However, CR4 and CR10 both dropped slightly, from 49.98% and 63.03% to 49.09% and 58.15% respectively.

The demand for hotel accommodation has grown faster than the supply. Starting from 2016, the demand growth rate has been faster than the supply growth rate in most periods of time. Affected by the 2018 Spring Festival in February, demand grew rapidly in January 2018 year-on-year, but the year-on-year growth rate of demand dropped significantly in February. Overall, the supply and demand structure of my country's hotel industry is still improving, and there is no need to worry too much about market prosperity in the short to medium term.

The hotel prosperity index reached 32 in the first half of 2018, an increase of 9 index points compared to the same period in 2017. Looking back at the trend of the hotel market sentiment index for five consecutive years, it has slowly fluctuated upward since hitting the bottom in July 2013, reaching a peak in the first half of 2018. From this point of view, despite the overall slowdown in the country's economic growth in recent years, the hotel market has gradually strengthened its confidence in improving operating performance through the adjustment of guest source structure and the implementation of revenue management strategies.

4. Choosing the best:

Whether a company is good or not depends on comparison:

Operating safety margin

1. First, look at whether the industry has Profit margin (gross profit margin): 00258 Beijing Capital Hotel, 601007 Jinling Hotel, 000613 Dadonghai A

2. Secondly, the company’s ability to make money (operating profit margin): 601007 Jinling Hotel, 600754 Jinjiang Shares, 00258 Beijing Tourism Hotel

3. Operating safety margin capability (MJ teacher’s indicator is above 60%): 600754 Jinjiang Shares

4. ROE return on net assets (MJ teacher’s indicator is above 20%) ): None

5. Profitability depends on the industry, and operating ability depends on turnover (the faster the turnover rate, the better, and the shorter the operating cycle is): 600754 Jinjiang Shares, 00258 Beijing Tourism Hotel

6. Cash flow risk (the cash ratio of cash-burning industries with total assets less than 1 is greater than 20%, and there must be surplus to cope with risks. The hotel industry mainly focuses on cash collection): 600754 Jinjiang Shares, 000613 Dadonghai A, 601007 Jinling Hotel

7. Financial structure indicators (the proportion of shareholders indicates corporate confidence): 000613 Dadonghai A, 601007 Jinling Hotel, 600754 Jinjiang Shares

8. Solvency indicators (current ratio 300 %. Quick ratio 150%):

9. Market share (revenue reflected): 00258 Beijing Tourism Hotel, 600754 Jinjiang Shares

Enterprises with better relative indicators: 00258 Beijing Tourism Hotel, 600754 Jinjiang Shares?

The current stock price of 00258 Beijing Tourism Hotel: 10.08, with a price-to-earnings ratio of 18.65, which is at a low level.

The current stock price of 600754 Jinjiang Co., Ltd. is: 21.66, with a price-to-earnings ratio of 19.91, which is at a low level.

Investment options: rigid needs, high frequency, large market.

This industry burns money. During the economic downturn, shareholder returns are not high. Continue to pay attention.