If solid financials and operational excellence form the bedrock of a company’s intrinsic value, its performance in capital markets and competitive positioning serve as the most direct external validation. Since 2025, H World Group (01179, HTHT.US) has seen its U.S. stock price climb steadily, surpassing $48 intraday on December 12 to hit a post-2022 high. This market optimism reflects not only recognition of its recent operational achievements but also investor confidence in its clear ecosystem strategy and long-term potential. Such validation is no coincidence—it stems from H World’s consistent execution in growth, strategic transformation, and ecosystem upgrades, earning dual acclaim from both capital markets and the industry.

Notably, major brokerages including J.P. Morgan, CICC, Huatai Securities, and Guosen Securities have issued uniformly bullish ratings, with many upgrading H World to "Buy" or "Overweight." What stands out further is that H World’s revenue and business expansion in 2025 exceeded analyst expectations, demonstrating its ability to "deliver on promises" or even "outperform" amid complexity—a key factor in securing long-term capital trust. This also signals that its operational strategy and quality have surpassed market consensus, driving a valuation reassessment.

**Navigating Industry Cycles: RevPAR Recovery Fuels Earnings** The domestic hotel sector in 2025 faced intensified structural adjustments and persistent supply-demand imbalances, pressured by uneven consumer confidence recovery, fluctuating business travel demand, and competition from alternative accommodations. Yet, the "strong-get-stronger" trend became more pronounced, with resources increasingly concentrated among leading chains like H World. Data from Guosheng Securities indicates the industry is at a cyclical trough, with rebalancing ahead: leisure travel remains resilient, while business travel demand bottoms out. Major players, including H World, are shifting focus from occupancy (OCC) to optimal RevPAR to stabilize pricing. Long-term, China’s service consumption (at 46% of total) is still rising, mirroring the U.S. trajectory in the 1980s.

H World’s latest earnings underscore its resilience: Q3 single-store efficiency held steady, with ADR stabilizing year-on-year and OCC maintaining an industry-leading 84.1%, driving RevPAR to near-parity with pre-adjustment levels. CICC notes that as industry supply growth slows further in 2026, RevPAR stabilization and H World’s market share gains could balance growth drivers between RevPAR and store expansion. Over the next five years, independent hotel closures are expected to accelerate, with leaders like H World poised to capture share through brand strength, supply chain advantages, and operational expertise.

**Three Pillars of Competitive Edge** H World’s sustained appeal lies in three unique barriers: 1. **Membership Ecosystem**: With over 300 million loyalty members (up 17.3% YoY), H World’s direct booking ratio hit 74% in Q3, reducing OTA reliance and boosting profitability. 2. **Asset-Light Model**: Franchise and management fees now drive revenue growth, supported by a collaborative approach that offers end-to-end solutions—from site selection to digital tools—enhancing加盟商 ROI. 3. **Digital Leadership**: Innovations like self-developed PMS, contactless check-in (e.g., Hi Inn’s fully automated front desk), and data-driven GOP management optimize costs and guest experiences. Zebra Procurement, its supply chain platform, ensures 80-100%加盟商 adoption for standardized operations.

**Growth Levers: Penetration and Premiumization** H World’s "deep and comprehensive" brand matrix spans budget to upscale segments. In lower-tier cities, where连锁化率 lags at 14% (vs. 70%+ in mature markets), its Hi Inn and HanTing brands are spearheading consolidation. Meanwhile, the mid-to-high-end portfolio surpassed 1,600 stores (up 25.3% YoY), with the newly launched "Grand Ji" brand targeting premium东方 aesthetics. Guosen Securities highlights H World’s two-decade "product-traffic-returns-scale" flywheel: - **Product**: Rapid iteration from economy (HanTing) to mid-scale (Orange Hotel) and upscale (Grand Ji). - **Traffic**: 300M+ members and 60%+ central bookings underpin yield management. - **Returns**: RevPAR leads peers by 30-80%, with per-room staffing at 0.17 and supply chain savings over 20%. - **Scale**: 15-20% annual加盟 store growth.

**Outlook: A Clear Revaluation Thesis** Near-term, improving industry dynamics and RevPAR recovery should bolster earnings. Medium-term,连锁化率 gains and H World’s operational edge will drive consolidation. Long-term, its dual engine—lower-tier expansion and premium upgrades—coupled with digital and membership moats, promises sustained growth. As these catalysts unfold, H World’s investment case may grow even more compelling.