Overview

• H World Q2 revenue rises 4.5% yr/yr to RMB6.4 bln, near high end of company's guidance

• Net income for Q2 increases 44.7% yr/yr to RMB1.5 bln, driven by Legacy-Huazhu

• Manachised and franchised revenue surges 22.8% yr/yr, exceeding company's guidance

Outlook

• H World expects Q3 revenue growth of 2%-6% year-over-year

• Company forecasts 4%-8% Q3 revenue growth excluding DH

• Manachised and franchised revenue to grow 20%-24% in Q3 2025

• Company cautious on near-term outlook due to macro uncertainties

Result Drivers

• HOTEL TURNOVER - Increased 15% yr/yr to RMB26.9 bln in Q2 2025, with Legacy-DH segment contributing an 8.9% rise

• REVENUE GROWTH - Revenue rose 4.5% yr/yr to RMB6.4 bln, near high end of guidance, driven by manachised and franchised revenue growth of 22.8% yr/yr

• ASSET-LIGHT STRATEGY - CEO Jin Hui attributes robust operating profit growth to network expansion and asset-light strategy despite modest RevPAR decline

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 15 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the hotels, motels & cruise lines peer group is "buy"

• Wall Street's median 12-month price target for H World Group Ltd is $43.00, about 22.4% above its August 19 closing price of $33.35

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 17 three months ago

Press Release: ID:nGNX88k1Xx

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)