– Top-5 China hotel company at heavily depressed valuation with 100% upside.
– Network of >4.6k hotels with a further 1.2k under development.
– Concentrates on Tier 3 and lower cities, serving value-conscious travelers.
– Shares trade at depressed levels due to lockdowns in China, wrong governance perception, and limited liquidity as CEOs own 90% of the company.
– All of these are either temporary or getting addressed by the company.
– Return to pre-covid operating levels would put the company at 6.5x PE and FCF.
– However, the ’23 hotel count is likely to be +41% high than in 2019, pointing to even better financial performance.
Exp. gain: +100% to $8/share.
Full GHG write-up (free guest account required):