Jin Jiang Hotels 1Q26 Performance Improved, but Operating Metrics Still Lag Peers
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Jin Jiang Hotels 1Q26 Performance Improved, but Operating Metrics Still Lag Peers
Goldman Sachs maintains Sell rating with a TP of RMB 26, noting that despite profit improvement, RevPAR growth remains weak and valuation is high.
- 1Q26 revenue RMB 3.12bn, +9% YoY
- Adjusted EBITDA RMB 498mn, +57% YoY
- Domestic limited-service RevPAR +0.1% YoY to RMB 143
- Target price raised to RMB 26.0; maintain Sell rating
- Hotel performance still lags peers
Report interpretation
Overview
Goldman Sachs issued a review of Jin Jiang Hotels' 1Q26 results, noting that while company performance has improved, hotel operations still lag peers. The report maintains a Sell rating and slightly raises the target price from RMB 25.0 to RMB 26.0 based on SOTP valuation.
Core views
On the earnings front, 1Q26 revenue reached RMB 3.12bn (+9% YoY), adjusted EBITDA was RMB 498mn (+57% YoY), and core net profit was RMB 152mn, indicating some margin recovery. Gross margin expanded by 6ppt YoY to 33.4%, mainly driven by lower G&A expense ratios. Operationally, domestic limited-service RevPAR stood at RMB 143 (+0.1% YoY), reflecting weak growth; overseas limited-service RevPAR was RMB 264 (+6% YoY). Regarding network expansion, net hotel additions in 1Q26 were 104, with domestic limited-service adding 111 units while overseas limited-service saw a net reduction of 10, indicating an overall slowdown in opening pace. On valuation, considering YTD trends, analysts fine-tuned 2026-2028E adjusted EBITDA forecasts by 1-4% and raised the 12-month SOTP target price from RMB 25.0 to RMB 26.0. However, given that operating metrics lag peers, a Sell rating is maintained.
Analysis framework
The report employs Sum-of-the-Parts (SOTP) valuation for pricing, deriving the target price based on FY26-28E EBITDA forecasts. It also assesses relative competitiveness by benchmarking operating metrics (e.g., RevPAR growth) against peers, emphasizing the importance of core operating data for valuation. Analysts also monitored the impact of debt structure changes and the progress of the overseas business turnaround on overall valuation.
Methodology notes
SOTP Valuation
Values different business segments separately and sums them up; suitable for diversified companies to more accurately reflect segment-specific value.
Volume-Price Decomposition
Decomposes revenue growth into store count (volume) and per-store revenue (price/RevPAR) growth to analyze drivers and sustainability.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Jin Jiang Hotels (600754.SS)Covered Company
- Strengths
- Profit-side improvement, good cost control
- Weaknesses
- Weak RevPAR growth, lagging peers
- Risks
- Macro volatility, slow overseas recovery
Key data
- 1Q26 RevenueRMB 3.12bn+9% YoY
- 1Q26 Adj. EBITDARMB 498mn+57% YoY
- Domestic Limited-Service RevPARRMB 143+0.1% YoY
- Target PriceRMB 26.0Raised from RMB 25.0
- 1Q26 Net Hotel Additions104-46% YoY
Impact & implications
The report argues that despite profit-side improvements, core operating metrics (RevPAR) are growing slowly and lagging peers, justifying the negative rating. Investors should monitor subsequent RevPAR recovery and the overseas business turnaround; valuations may face pressure if operating data does not improve significantly.
Risks
- Better-than-expected macro conditions leading to faster-than-expected RevPAR growth
- Faster-than-expected turnaround of Louvre operations in Europe
- Faster-than-expected debt repayment
What to watch
- RevPAR growth trends
- Overseas business recovery
- Debt structure changes