Shanghai Jin Jiang International Hotels Co., Ltd. accelerates its bid to become the hospitality sector's first "A+H" dual-listed entity. Following its Hong Kong exchange submission, the company appointed CLSA, CICC Hong Kong Securities, and Shenwan Hongyuan Securities (Hong Kong) as joint coordinators, with Orient Securities (Hong Kong) retaining its role as sponsor.
Prospectus disclosures indicate H-share issuance won't exceed 15% of total post-offering shares (pre-overallotment), with raised funds earmarked for overseas expansion, loan repayment, and working capital. Market reception remains tepid—shares dipped 2.6% between the June 4 announcement and June 29 prospectus filing, briefly hitting a yearly low of RMB 21.7/share. Current market capitalization hovers near RMB 21.99 billion, evaporating over RMB 40 billion since April 2023 peaks.
Despite commanding China's largest chain hotel footprint with 13,000+ properties and 1.3 million rooms in 2024—outpacing Huazhu Group by 20.4% in hotel count and 18.6% in room inventory—performance metrics falter. Revenue slid to RMB 14.06 billion last year while net profit attributable to shareholders plummeted to RMB 911 million, mirroring 2017 levels.
Peer comparisons reveal stark underperformance: Huazhu generated 1.7x revenue and 3.35x net profit of Jin Jiang in 2024. Though BTG Hotels and Atour recorded smaller revenues, their net profits reached RMB 806 million (+1.4% YoY) and RMB 1.28 billion (+73% YoY) respectively. Operational inefficiencies compound challenges—Jin Jiang's 2024 domestic ADR (RMB 240.67) ranked second-lowest among major players, while 65.4% occupancy trailed Huazhu's 81% and Atour's 77.1%. Consequently, RevPAR languished at RMB 157.47, far below Huazhu's RMB 235 and Atour's RMB 350.
Q1 2025 exacerbated concerns: domestic ADR dropped 6.8% YoY to RMB 225.83 despite a 1% occupancy bump to 60.9%, slashing RevPAR to RMB 137.53 (-5.3% YoY). Overall revenue contracted 8.2% to RMB 2.91 billion as net profit attributable to shareholders collapsed 81% to RMB 36 million—a 1.8% margin versus peers' 10-15%. H1 projections suggest Q2 net profit of RMB 324-364 million, still down 44.7-50.8% YoY.
Overseas operations hemorrhage cash, with accumulated losses exceeding EUR 300 million from 2020-2024 despite Jin Jiang's EUR 1.29 billion acquisition of Louvre Hotels Group in 2015 and subsequent investments in Accor and Radisson. Louvre—operating 773 French hotels among 1,171 global properties—sustained losses despite 2024's Olympic-driven rate hikes, posting EUR 556 million revenue (-1.8% YoY) and dragging Q1 2025 overseas revenue down 10.5% to EUR 103 million.
Risks intensify through Jin Jiang's RMB 8.86 billion in guarantees—57.5% of net assets—primarily backing Louvre and parent Sailing Investment Co, S.àr.l., both burdened by combined EUR 1.14 billion current liabilities and >70% debt ratios. Meanwhile, goodwill balloons to RMB 11.48 billion (73.2% of net assets), with Louvre accounting for RMB 4.58 billion—a potential impairment catalyst should overseas operations stagnate.
Domestic leverage compounds pressure: Q1 interest expenses (RMB 102 million) surpassed operating profit (RMB 94 million), while liquidity ratios deteriorated to 0.84 (current) and 0.83 (quick). This confluence of operational headwinds and financial vulnerabilities clouds Jin Jiang's dual-listing ambitions.
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