China's H World Group Q4 revenue rises on network expansion

Overview

• China hotel operator's Q4 revenue rose 8.3% yr/yr, exceeding company guidance

• Net income for Q4 surged yr/yr, driven by Legacy-Huazhu and Legacy-DH segments

• Company declared US$400 mln cash dividend for H2 2025

Outlook

• H World expects 2026 revenue growth of 2%-6% versus 2025

• Company sees 2026 M&F revenue growth of 12%-16%

• H World plans to open 2,200-2,300 hotels and close 600-700 hotels in 2026

Result Drivers

• M&F REVENUE GROWTH - Strong 21% yr/yr increase in manachised and franchised hotel revenue drove overall revenue growth

• NETWORK EXPANSION - Fast hotel network expansion, especially in Legacy-Huazhu, supported revenue and RevPAR performance

• ASSET-LIGHT MODEL - Higher revenue contribution from M&F business improved operating margin, consistent with asset-light strategy

Company press release: ID:nGNX1HwHBS

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", no "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 $52.95, about 1.5% above its March 17 closing price of $52.15

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 19 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.