For the past three years, Atour has beenprofitable, making it the only large-scale hotel company in China to maintain profitability for three consecutive years. According to the prospectus, from 2019 to the first half of 2022, Atour achieved revenue of 1.567 billion yuan, 1.567 billion yuan, 2.148 billion yuan and 967 million yuan respectively. Net profit attributable to parent company were respectively 65 million yuan, 42 million yuan, 145 million yuan and 69 million yuan. The relatively abundant cash flow also enables Atour to show strong anti-risk ability under the adverse impact of the epidemic. From 2019 to 2021, Atour's cash flow from operating activities was 224 million yuan, 119 million yuan and 418 million yuan respectively. As of the end of June 2022, Atour's cash and cash equivalents amounted to 1.262 billion yuan.
According to the official website, there are six Hotel brands underAtour Group. In addition to the brand of Atour Hotel, there are also luxury lifestyle brand A.T.HOUSE, high-end business hotel brand Atour S Hotel, Generation Z lifestyle brand Z Hotel, high-quality non-standard brand Atour X Hotel, and the hotel brand Light Residence which focuses on young business travel. By the end of June 2022, Atour has 834 hotels with 96,969 rooms in 151 cities across China. In addition, there are 37,795 rooms in 343 hotels under development. Atour's rapid expansion has benefited from its asset-light model of "management + franchise". According to the prospectus, by the end of September 2022, the number of hotels joined by Atour is 847, accounting for 96.3% of the total number of hotels in operation, with a total of 92,000 rooms. In the post-epidemic era, the franchise model of Atour is playing an important role, and the growth potential is full, and the basic direction is good. And Atour has established a unique franchise model, which has long-term investment value for the majority of franchisees. In terms of specific business, managing and leasing hotels contribute a lot to Atour's revenue. From 2019 to 2021, Adour's revenue from managed hotel business was 840 million yuan,926 million yuan and 1.22 billion yuan respectively, while the revenue from rental hotel business was 615 million yuan, 496 million yuan and 630 million yuan respectively during the same period.
In addition to the main hotel business, Atour also made efforts in scene retail, or deliberately built it as the second growth point of the company, which provided a new imagination space for the capital market. According to the prospectus, by the end of June 2022, Atour had launched 1,967 SKUs, of which 62.8 percent were own-brand products. Specifically, Atour created the Atour Market department store brand, which has incubated a number of original lifestyle brands in the areas of sleep, fragrance care and travel, such as αTOUR PLANET , SAVHE and Z2GO&CO. That part of the business is also becoming more profitable. From 2019 to 2021, Atour's retail and other businesses generated 112 million yuan, 144 million yuan and 297 million yuan in revenue, respectively, accounting for 13.83 percent of the total revenue from 7.14 percent. In the first half of this year, Atour's scenario-based retail business GMV reached 118 million yuan.

1. In 2021, the penetration rate of China's chain hotels is 34.4%, which is still at a low level compared with the average penetration rate of global chain hotels of 41.9%, and there is a large room for growth. As the first hotel group in the middle and high-end hotel chain, the company has been leading the middle and high-end hotel market for five consecutive years. The size of the store is more than 3 times that of the second place. The franchise accounts for a relatively high proportion, and the franchisee re-purchase rate has reached 31.2%.
2. Create immersive check-in experience based on the scenario-based lifestyle, improve customer engagement, and have a high customer re-purchase rate and retention rate in the industry. The company's outstanding brand value, high customer satisfaction, significant growth, suggest attention.

The latest figures show that in the first nine months of 2022, Atour achieved a revenue of 1.637 billion yuan, up 5.23% from the same period last year; Net profit reached 179 million yuan, up 58.42 percent year on year. Among them, the third quarter of 2022 net profit of 111 million yuan, a net interest rate of 16.6 percent, a record high, the estimated 2022 full year net profit of 290 million yuan. The conservative forecast is 30% growth in 2023, the full-year net profit is expected to be 377 million yuan, based on the latest price-earnings ratio of 69.27 times, the dollar exchange rate of 7.12 , Atour's target price is 28.12 dollars.
Risk:Pandemic and policy-driven uncertainty.
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