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) Review]:Still a Quality Growth Story in the Next Two Years

[Atour Lifestyle (ATAT US, BUY, TP US$39) TP Change]: Should Retail Profit Be Accorded a Multiple?

Atour Lifestyle Holdings Placement - Well Flagged Deal, past Selldowns Have Done Well

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

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

[Atour Lifestyle (ATAT US, BUY, TP US$35) Preview]: Retail and Summer Travelling Are Two Catalysts

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>We expect Atour to report 4Q23 revenue 3.5% higher than consensus, and non-GAAP NI 15.1% higher than consensus, mainly due to (1) stable business travellers in tourism off-season; </li>
<li>(2) raising retail sales drive up gross margin. We think hotel supply and demand will turn to equilibrium in 2024. </li>
<li>Occupancy may stabilize but ADR will fall, especially economy hotels. Atour, however, will be immune to the price fall, in our view.</li>
</ul>


We expect Atour to report 4Q23 revenue 3.5% higher than consensus, and non-GAAP NI 15.1% higher than consensus, mainly due to (1) stable business travellers in tourism off-season; 
(2) raising retail sales drive up gross margin. We think hotel supply and demand will turn to equilibrium in 2024. 
Occupancy may stabilize but ADR will fall, especially economy hotels. Atour, however, will be immune to the price fall, in our view.


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