Shanghai Jin Jiang International Hotels Co., Ltd. has released its first-half financial results as the company eyes Hong Kong stock market listing.
On the evening of August 28, Shanghai Jin Jiang International Hotels disclosed its interim report. During the reporting period, the company achieved revenue of 6.526 billion yuan and attributable net profit of 371 million yuan, representing year-over-year declines of 5.31% and 56.27% respectively. Both growth rates hit their lowest levels in three years of interim reports.
Looking at attributable net profit growth rates, the indicator stood at 543.45% and 62.02% in the 2023 and 2024 interim reports respectively, before taking a sharp downturn in the current year.
Shanghai Jin Jiang International Hotels explained that in the same period last year, the company completed the transfer of 100% equity in Fashion Travel Hotel Management Co., Ltd. and strategically exited certain domestic and overseas properties, generating disposal gains, "while no similar gains were recorded in the current period."
As of the end of June, Shanghai Jin Jiang International Hotels' global hotel business achieved revenue of 6.423 billion yuan, down 5.14% year-over-year, with net profit attributable to the hotel business segment of approximately 240 million yuan, plummeting 66.16% year-over-year.
Behind these figures lies the deterioration of both domestic and overseas operations for Shanghai Jin Jiang International Hotels.
In the first half, hotel business in mainland China contributed revenue of 4.575 billion yuan, down 4.25% year-over-year, accounting for 71.22% of total hotel business revenue. Overseas revenue fell 7.27% year-over-year to 1.848 billion yuan, representing 28.78% of the total.
Regarding mainland operations and opened hotels, Shanghai Jin Jiang International Hotels operates 400 directly-owned hotels across 339 cities, corresponding to 52,959 rooms, while simultaneously managing 12,250 managed/franchised hotels with 1.187 million rooms.
Their operational performance has been less than satisfactory.
As of the end of June, full-service hotels recorded an average room rate of 461.17 yuan per room, declining approximately 9.8% from 511.16 yuan per room in the same period last year. Average occupancy rate also dropped 0.24 percentage points year-over-year to 46.76%, while RevPAR (Revenue per Available Room) fell 10.23% year-over-year to 215.67 yuan per room.
During the same period, limited-service hotels saw average room rates decline from 246.3 yuan per room in the previous year to 231.15 yuan per room, while average occupancy rates improved 0.7 percentage points year-over-year to 63.16%. RevPAR reached 145.99 yuan per room, down 5.1% year-over-year.
Regarding overseas operations, during the reporting period, Shanghai Jin Jiang International Hotels' Louvre Group focused on overseas business development by restructuring overseas debt through debt reorganization and renegotiating loan terms, adjusting from fixed to floating interest rates to reduce average financing costs while continuously optimizing capital structure and improving capital utilization efficiency.
Operationally, the company implemented a five-year plan focusing on asset disposal, renovation and upgrading, system contribution rate improvement, brand website development, membership programs, new operating models, and IT system construction to comprehensively enhance and improve Louvre's operational performance.
These measures failed to reverse the losses in overseas operations. As of the end of June, Shanghai Jin Jiang International Hotels' overseas limited-service chain hotel business achieved consolidated revenue of approximately 237 million euros, down 9.02% from the same period last year, while recording an attributable net loss of 45.15 million euros, representing an increased loss of 21.68 million euros compared to the previous year.
According to financial data, during the reporting period, Shanghai Jin Jiang International Hotels operated 244 directly-owned hotels overseas with 19,388 rooms, and 902 franchised hotels with 73,371 rooms, primarily located in Europe.
These hotels recorded an average room rate of 67.24 euros per room, exceeding the previous year's 65.75 euros per room, while average occupancy rates declined from 60.13% to 57.83%. RevPAR fell 1.67% year-over-year to 38.88 euros per room.
The weakness in hotel operations directly impacted Shanghai Jin Jiang International Hotels' cash flow. As of the end of June, net cash flow from operating activities reached 1.331 billion yuan, down 35.11% from the same period last year. The company explained in its financial report that this was "mainly due to declining operating revenue."
Additionally, Shanghai Jin Jiang International Hotels' cash and cash equivalents balance at period-end was 7.017 billion yuan, compared to 10.152 billion yuan in the same period last year.
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