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BTG Hotels:Private Placement Plan Approved

发布时间:2016-07-29    研究机构:兴业证券

Company Profilel

BTG Hotels (Group) Co., Ltd. (“BTG Hotels”) is a large all‐encompassing publicly‐listed Chinesetourism company, specializing in hotel management operations, scenic destinations and othercommercial activities. Founded in February 1999, the Company has been listed on the ShanghaiStock Exchange since June 2000.

Eventl

CSRC approved the Company’s M&A transaction.

Commentl

Privatization of Home Inns Group was completed on 1 April 2016 in Hong Kong. USD 1.157 billion(CNY 7.389 billion) was paid for the transaction. BTG Hotels (Group) Co., Ltd. was going to issue247 million shares at the price of CNY 15.54 per share to buy 100% stake in Poly Victory (Mainasset of Poly Victory is 15.27% stake in Home Inns Group) and 19.60% stake in Home Inns Group.Another CNY 3.874 will be raised through privately offering new shares for repayment of bankloans in the meantime.

Beijing Tourism Group remains to be the controlling shareholder of BTG Hotels but thepercentage of ownership goes down to 34.16% from 60.12%. Ctrip Shanghai is the second largestshareholder with 14.44% stake. Mr. Shen Nanpeng and persons acting in concert hold 3.84% oftotal shares.

Home Inns Group is a leading economy hotel chain in China based on the number of hotels andhotel rooms as well as geographic coverage. Since Home Inns Group commenced operations in2002, it has built Home Inn as one of the best‐known economy hotel brands in China. In Octoberof 2011, Home Inns Group acquired Motel 168, another well‐known hotel chain in China, as itssecond economy hotel brand. Home Inns Group aims to offer a consistent product and highqualityservices to primarily serve the fast growing population of value‐conscious individualbusiness and leisure travelers who demand clean, comfortable and convenient lodging. About53.90 million individuals are registered in Home Inns’ membership program. Revenue of HomeInns equaled to CNY 6.35 billion in 2013, CNY 6.68 billion in 2014 and CNY 6.67 billion in 2015.The net profit was CNY 196 million/CNY 519 million/CNY 374 million respectively.

Earnings Forecast and Investment Recommendations: We are confident in the promising future ofhotel business and made EPS forecast for BTG Hotels at CNY 0.62 in 2016, CNY 0.76 in 2017 andCNY 0.88 in 2018 (CNY 0.51/0.75/0.86 after M&A), implying 31x/26x/22x PE (39x/26x/23x PEafter M&A). Reiterate OUTPERFORM.

Potential Risks: systematic risk of hotel industry, M&A generates worse‐than‐expected results.

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