HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China Travel International Investment Hong Kong / Equity Bottom-Up

China Travel International Investment Hong Kong (308 HK)

China Travel International Investment Hong Kong

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-travel-international-investment-hong-kong-limited" target="_blank" data-smartkarma-citation="entities:3879:1" rel="noopener">China Travel Intl Invest (308 HK)</a>'s spin-off of CTG HK and Macao Culture and Tourism (CTCT) is value-enhancing. Its adjusted net profit growth of 101% in 1Q26 is encouraging.</li>
<li>We valued CTCT at HK$2.8bn, using the 17.8x average FY26 PER of the HK-listed hotel companies. </li>
<li>Implied valuation of the new CTII is HK$4.1bn, or just 0.6x P/B. There are good growth prospects, and a re-rating to 0.7x P/B will give 16% upside to CTII.</li>
</ul>



China Travel Intl Invest (308 HK)'s spin-off of CTG HK and Macao Culture and Tourism (CTCT) is value-enhancing. Its adjusted net profit growth of 101% in 1Q26 is encouraging.
We valued CTCT at HK$2.8bn, using the 17.8x average FY26 PER of the HK-listed hotel companies. 
Implied valuation of the new CTII is HK$4.1bn, or just 0.6x P/B. There are good growth prospects, and a re-rating to 0.7x P/B will give 16% upside to CTII.


China Travel Intl Inv (308 HK): Assessing the Spin-Off

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Shanghai Jin Jiang International Hotels / Equity Capital Markets

Shanghai Jin Jiang International Hotels (SJJ HK)

<ul>
<li>In 25Q1, Jin Jiang did not show a turning point in performance.There's uncertainty about whether 2025 performance target can be achieved due to low efficiency of membership system/weak overseas business.</li>
<li>The growth of the core mid-to-low end economic market is weak.The transition to the high-end market or international expansion is difficult to shoulder the banner of growth in short term.</li>
<li>Valuation of Jin Jiang could be lower than Atour and H World Group, who have found new development paths and growth points.A relatively conservative valuation range is P/E of 15-18x.</li>
</ul>


In 25Q1, Jin Jiang did not show a turning point in performance.There's uncertainty about whether 2025 performance target can be achieved due to low efficiency of membership system/weak overseas business.
The growth of the core mid-to-low end economic market is weak.The transition to the high-end market or international expansion is difficult to shoulder the banner of growth in short term.
Valuation of Jin Jiang could be lower than Atour and H World Group, who have found new development paths and growth points.A relatively conservative valuation range is P/E of 15-18x.


Pre-IPO Shanghai Jin Jiang International Hotels - The Pain Points and the Outlook

<ul>
<li>A partial disposal of Club Med is positive for <a href="https://www.smartkarma.com/entities/fosun-tourism-group" target="_blank" data-smartkarma-citation="entities:27439:1" rel="noopener">Fosun Tourism (1992 HK)</a>. The market is speculating <a href="https://www.smartkarma.com/entities/capitaland-investment-ltd-sing" target="_blank" data-smartkarma-citation="entities:33774:1" rel="noopener">CapitaLand Investment /Sing (CLI SP)</a> is paying EUR500m for a 20-30% stake.</li>
<li>Club Med generated 91.7% of its 1H24 operating profit. The rumoured valuation will boost its value by HK$6.9/share, 1.2x of the share price if true.</li>
<li>We see reasons for such disposal, and if happens, this will align the stock's valuation to international peers - 26.2x for FY24, vs. its 11.3x currently.</li>
</ul>


A partial disposal of Club Med is positive for Fosun Tourism (1992 HK). The market is speculating CapitaLand Investment /Sing (CLI SP) is paying EUR500m for a 20-30% stake.
Club Med generated 91.7% of its 1H24 operating profit. The rumoured valuation will boost its value by HK$6.9/share, 1.2x of the share price if true.
We see reasons for such disposal, and if happens, this will align the stock's valuation to international peers - 26.2x for FY24, vs. its 11.3x currently.


Fosun Tourism (1992 HK): Is Club Med Disposal Happening?

External reports (aggregated public sources), Value Investors Club

Value Investors Club (VIC)

External reports (aggregated public sources)

Value Investors Club

<ul><li>Hotel rooms in China decreased by 5.4% compared to the previous year</li><li>H World has maintained its position as a leading hotel operator in China with a diverse portfolio of brands</li><li>Founder Qi Ji's strong track record in the hospitality industry has contributed to H World's success in navigating challenges and growing its presence in the industry.</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.</em></p>

Hotel rooms in China decreased by 5.4% compared to the previous yearH World has maintained its position as a leading hotel operator in China with a diverse portfolio of brandsFounder Qi Ji's strong track record in the hospitality industry has contributed to H World's success in navigating challenges and growing its presence in the industry.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

H World Group Limited (HTHT) - Thursday, Feb 8, 2024

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel Holdings (780 HK)</a> has a solid FY23 and 4Q23 with massive net profit recovery. Earnings momentum for FY24 and FY25 look to stay impressive.</li>
<li>FY23 is a record year of profit, demonstrating its ability to gain market share after COVID-19 disruption. Further volume growth will lead to better operating leverage.</li>
<li>Net cash reached Rmb2.3bn, up 90.4% YoY, showcasing its cash-generating ability. The first-time dividend payout also reflected management's confidence on the outlook.</li>
</ul>



Tongcheng Travel Holdings (780 HK) has a solid FY23 and 4Q23 with massive net profit recovery. Earnings momentum for FY24 and FY25 look to stay impressive.
FY23 is a record year of profit, demonstrating its ability to gain market share after COVID-19 disruption. Further volume growth will lead to better operating leverage.
Net cash reached Rmb2.3bn, up 90.4% YoY, showcasing its cash-generating ability. The first-time dividend payout also reflected management's confidence on the outlook.


Tongcheng Travel (780 HK): Riding the High Tide

China

H World Group is a leading global hospitality company that manages a diverse portfolio of hotel brands, ranging from economy to luxury segments. It provides quality accommodation and hospitality experiences through its leased and owned, manachised, and franchised hotel models. The company was founded in 2005 and is headquartered in Jiading District, Shanghai, China.

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H World Group (1179 HK)

China Travel Intl Inv (308 HK): Assessing the Spin-Off

CTII's spin-off of CTG HK and Macao Culture and Tourism enhances value and clarifies business separation. CTCT is valued at HK$2.7bn, giving the...

Osbert Tang, CFA

Pre-IPO Shanghai Jin Jiang International Hotels - The Pain Points and the Outlook

Jinjiang's 25Q1 performance raise doubts about meeting 2025 targets due to weak membership system inefficiency/overseas business.Valuation may be...

Xinyao (Criss) Wang

Fosun Tourism (1992 HK): Is Club Med Disposal Happening?

Fosun Tourism remains suspended, and we are awaiting an announcement. Speculation is that it involves privatisation by its parent, Fosun Intl....

Osbert Tang, CFA

H World Group Limited (HTHT) - Thursday, Feb 8, 2024

Founder Qi Ji's strong track record in the hospitality industry has contributed to H World's success in navigating challenges and growing its...

Value Investors Club (VIC)

Tongcheng Travel (780 HK): Riding the High Tide

According to www.fliggy.com, outbound travel bookings during the 5-day Labour Day holiday have doubled this year. This was achieved on a high base...

Osbert Tang, CFA

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China Travel Intl Inv (308 HK): Assessing the Spin-Off

​CTII's spin-off of CTG HK and Macao Culture and Tourism enhances value and clarifies business separation. CTCT is valued at HK$2.7bn, giving the...

Osbert Tang, CFA

Pre-IPO Shanghai Jin Jiang International Hotels - The Pain Points and the Outlook

​Jinjiang's 25Q1 performance raise doubts about meeting 2025 targets due to weak membership system inefficiency/overseas business.Valuation may be...

Xinyao (Criss) Wang

Fosun Tourism (1992 HK): Is Club Med Disposal Happening?

Fosun Tourism remains suspended, and we are awaiting an announcement. Speculation is that it involves privatisation by its parent, Fosun Intl....

Osbert Tang, CFA

H World Group Limited (HTHT) - Thursday, Feb 8, 2024

Founder Qi Ji's strong track record in the hospitality industry has contributed to H World's success in navigating challenges and growing its...

Value Investors Club (VIC)

Tongcheng Travel (780 HK): Riding the High Tide

According to www.fliggy.com, outbound travel bookings during the 5-day Labour Day holiday have doubled this year. This was achieved on a high base...

Osbert Tang, CFA

CTII's spin-off of CTG HK and Macao Culture and Tourism enhances value and clarifies business separation. CTCT is valued at HK$2.7bn, giving the...

Jinjiang's 25Q1 performance raise doubts about meeting 2025 targets due to weak membership system inefficiency/overseas business.Valuation may be...