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 (ATAT US, BUY, TP US$37.5) ]: Hotel Scale Leverage Is Still the Main Driver in 2024

[Atour Lifestyle (ATAT US, BUY, TP US$37.5) Target Price Change]: Brand Value Brings Premium Sales

[Atour (ATAT US, BUY, TP US$36.5) TP Change]: Demand Supply Imbalance to Sustain…maintain BUY

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

Equity Bottom-Up

Atour Lifestyle Holdings / Equity Bottom-Up

<ul>
<li>Atour reported C4Q23 revenue vs. our estimate/consensus by 18%/21% and guided a robust 30% yoy revenue growth for 2024, outpacing the consensus by 12% and our estimate by 7%</li>
<li>C4Q23 operating margin decline was due to one-off leased hotel impairment and seasonality in retail marketing. We foresee stable margin in 2024;</li>
<li>We maintain our BUY rating and keep our TP at US$37.5, implying a 2024 P/E of 34x, vs. currently trading at 16x.</li>
</ul>


Atour reported C4Q23 revenue vs. our estimate/consensus by 18%/21% and guided a robust 30% yoy revenue growth for 2024, outpacing the consensus by 12% and our estimate by 7%
C4Q23 operating margin decline was due to one-off leased hotel impairment and seasonality in retail marketing. We foresee stable margin in 2024;
We maintain our BUY rating and keep our TP at US$37.5, implying a 2024 P/E of 34x, vs. currently trading at 16x.


[Atour Lifestyle (ATAT US,BUY,TP US$37.5) Review]:Still a Quality Growth Story in the Next Two Years