Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Media rife with narrative of booming inbound foreign tourism to China</li>
<li>But the numbers are well below historical highs, and climbing up from low base</li>
<li>Chinese tourists, not foreign, determine strength of Chinese tourism recovery</li>
</ul>


Media rife with narrative of booming inbound foreign tourism to China
But the numbers are well below historical highs, and climbing up from low base
Chinese tourists, not foreign, determine strength of Chinese tourism recovery


Chinese Inbound Foreign Tourist Arrivals Up 153% Y/Y in H124?! Much Ado About (Almost) Nothing

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Atour Lifestyle Holdings / Equity Bottom-Up

<ul>
<li>Atour (ATAT) reported C2Q24 revenue 2.2%/8.3% higher than our est./cons., and non-GAAP NI 6.8%/12.3% higher than our est./ cons, driven by stronger hotel supply chain sales and better retail efficiency.</li>
<li>We keep 2024 revenue growth estimate at 53% YoY vs. the uplift company guidance at 48%-52% YoY. Potential catalysts are stronger off-season travel,old hotel renovation scheme, and new brand launch.</li>
<li>We keep TP unchanged at US$36/ADS and maintain the BUY rating.</li>
</ul>


Atour (ATAT) reported C2Q24 revenue 2.2%/8.3% higher than our est./cons., and non-GAAP NI 6.8%/12.3% higher than our est./ cons, driven by stronger hotel supply chain sales and better retail efficiency.
We keep 2024 revenue growth estimate at 53% YoY vs. the uplift company guidance at 48%-52% YoY. Potential catalysts are stronger off-season travel,old hotel renovation scheme, and new brand launch.
We keep TP unchanged at US$36/ADS and maintain the BUY rating.


[Atour (ATAT US, BUY, TP US$36) Review]: Retail Business Bigger and Longer than Market Thinks

Thematic (Sector/Industry)

<ul>
<li>1519 HK/ZTO US: Weekly parcel volume grew ~28% y-o-y (+)</li>
<li>ATAT US/TCOM US: Hotel industry showcased strong performance in the last week of August due to eased base effect.(+/+)</li>
<li>Macro Update: The mortgage interest rate for existing loans may be further reduced, releasing at least RMB200 billion of residents' funds annually, bodes well for consumption in China(+)</li>
</ul>


1519 HK/ZTO US: Weekly parcel volume grew ~28% y-o-y (+)
ATAT US/TCOM US: Hotel industry showcased strong performance in the last week of August due to eased base effect.(+/+)
Macro Update: The mortgage interest rate for existing loans may be further reduced, releasing at least RMB200 billion of residents' funds annually, bodes well for consumption in China(+)


[Blue Lotus Daily]:1519 HK/ZTO US/ATAT US/TCOM US/9926 HK/Macro Update

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>The hotel sector continues to be under pressure in 3Q24E and we are still cautious about a potential improvement in 4Q24E.</li><li>However, Atour’s retail sales business and better-than-expected sales of hotel supplies can still more than offset the drags from its hotel segment.</li><li>Moreover, the new dividend payout policy is a big positive surprise and could raise its FY24E yield to around 3% to 4%. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

The hotel sector continues to be under pressure in 3Q24E and we are still cautious about a potential improvement in 4Q24E.However, Atour’s retail sales business and better-than-expected sales of hotel supplies can still more than offset the drags from its hotel segment.Moreover, the new dividend payout policy is a big positive surprise and could raise its FY24E yield to around 3% to 4%. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Atour Lifestyle (ATAT US) - Guidance Raised Again Plus Massive Dividends

<ul>
<li>Despite slower top-line growth, Trip.com posted firmer margins in Q224</li>
<li>Cash Operating Expenses as a % of Net Revenue fell by around -250 bps Y/Y</li>
<li>Post-Covid, Trip.com has less competition; BUY with target of US$58 per ADS</li>
</ul>


Despite slower top-line growth, Trip.com posted firmer margins in Q224
Cash Operating Expenses as a % of Net Revenue fell by around -250 bps Y/Y
Post-Covid, Trip.com has less competition; BUY with target of US$58 per ADS


Trip.com Q224: Slower Growth | But Higher Margins | Competition Has Eased | BUY with US$58 Target

China

Atour Lifestyle Holdings Limited operates as a holding company. The Company, through its subsidiaries, owns and manages midscale hotel chain through offline and online channels, including mobile application and weixin-wechat mini program. Atour Lifestyle Holdings serves customers in China.

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Atour Lifestyle Holdings (ATAT US)

Chinese Inbound Foreign Tourist Arrivals Up 153% Y/Y in H124?! Much Ado About (Almost) Nothing

Yes, foreign inbound travel to China has shown strong growth so far in 2024, but the numbers are rising from a very low base, and ultimately matter...

Tracking Traffic

[Atour (ATAT US, BUY, TP US$36) Review]: Retail Business Bigger and Longer than Market Thinks

Atour (ATAT) beats revenue and non-GAAP NI estimates, driven by hotel supply chain sales and retail efficiency. Potential growth catalysts include...

Blue Lotus Research Institute

[Blue Lotus Daily]:1519 HK/ZTO US/ATAT US/TCOM US/9926 HK/Macro Update

Weekly parcel volume in HK and the US grew by 28%, the hotel industry in the US showed strong performance, and China may see a boost in...

Blue Lotus Research Institute

Atour Lifestyle (ATAT US) - Guidance Raised Again Plus Massive Dividends

The hotel sector continues to be under pressure in 3Q24E and we are still cautious about a potential improvement in 4Q24E.

CMB International

Trip.com Q224: Slower Growth | But Higher Margins | Competition Has Eased | BUY with US$58 Target

Trip.com posted slower revenue growth in Q2, but margins improved as the company expertly managed operating expenses. Post-Covid, Trip.com's...

Tracking Traffic

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Chinese Inbound Foreign Tourist Arrivals Up 153% Y/Y in H124?! Much Ado About (Almost) Nothing

Yes, foreign inbound travel to China has shown strong growth so far in 2024, but the numbers are rising from a very low base, and ultimately matter...

Tracking Traffic

[Atour (ATAT US, BUY, TP US$36) Review]: Retail Business Bigger and Longer than Market Thinks

​Atour (ATAT) beats revenue and non-GAAP NI estimates, driven by hotel supply chain sales and retail efficiency. Potential growth catalysts include...

Blue Lotus Research Institute

[Blue Lotus Daily]:1519 HK/ZTO US/ATAT US/TCOM US/9926 HK/Macro Update

​Weekly parcel volume in HK and the US grew by 28%, the hotel industry in the US showed strong performance, and China may see a boost in...

Blue Lotus Research Institute

Atour Lifestyle (ATAT US) - Guidance Raised Again Plus Massive Dividends

The hotel sector continues to be under pressure in 3Q24E and we are still cautious about a potential improvement in 4Q24E.

CMB International

Trip.com Q224: Slower Growth | But Higher Margins | Competition Has Eased | BUY with US$58 Target

Trip.com posted slower revenue growth in Q2, but margins improved as the company expertly managed operating expenses. Post-Covid, Trip.com's...

Tracking Traffic

Atour (ATAT) beats revenue and non-GAAP NI estimates, driven by hotel supply chain sales and retail efficiency. Potential growth catalysts include...

Weekly parcel volume in HK and the US grew by 28%, the hotel industry in the US showed strong performance, and China may see a boost in...