Huazhu Group Ltd (1179) AI Stock Analysis

• Market Cap: HK$113.47B
• Dividend Yield: 3.67%
• Average Volume (3M): 1.53M
• Price to Earnings (P/E): 28.1
• Beta (1Y): 1.24
• Revenue Growth: 5.49%
• EPS Growth: 9.44%
• Country: HK
• Employees: 28,502
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): 0.52
• Shares Outstanding: 3,069,390,600
• 10 Day Avg. Volume: 2,030,676
• 30 Day Avg. Volume: 1,532,940
• PEG Ratio: <0.01
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.32
• P/FCF Ratio: 1.17
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$35.34
• Price Target Upside: 18.45% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: HK$40.00 ▲(34.05% Upside)

Huazhu Group Ltd's strong financial performance and bullish technical indicators are the primary drivers of its stock score. The company's high leverage is a concern, but its profitability and cash flow generation are positive. The stock's valuation is on the higher side, which could limit upside potential.

Positive Factors

Revenue Growth

The company's strong revenue growth indicates a successful expansion strategy and increasing market demand for its services, which supports long-term business sustainability.

Profitability Margins

Improved profitability margins reflect effective cost management and operational efficiency, enhancing the company's ability to generate sustainable profits.

Cash Flow Generation

Strong cash flow generation supports financial stability and provides flexibility for future investments and debt management, crucial for long-term growth.

Negative Factors

High Debt Levels

Elevated debt levels can strain financial resources and limit strategic options, posing a risk to long-term financial health if not managed properly.

Decreased Operating Cash Flow Coverage

A decrease in operating cash flow coverage may indicate potential liquidity challenges, affecting the company's ability to meet short-term obligations.

Dip in Gross Profit Margin

A dip in gross profit margin suggests potential cost pressures or pricing challenges, which could impact profitability if not addressed.

Huazhu Group Ltd Business Overview & Revenue Model

Company Description

Huazhu Group Ltd is a leading hotel management company based in China, operating a diverse portfolio of hotel brands across various market segments. Founded in 2005, Huazhu has expanded its presence significantly in the hospitality industry, offering services ranging from budget to upscale accommodations. The company operates under several brands, including Hanting, JI Hotel, and Elan Hotels, and has established itself as a key player in the competitive Chinese hotel market, catering to both domestic and international travelers.

How the Company Makes Money

Huazhu Group Ltd generates revenue primarily through hotel management and franchising fees, which are derived from the operation of its various hotel brands. The company earns money by charging franchise fees to hotel owners who operate their properties under Huazhu's brands, as well as management fees for hotels that are directly managed by Huazhu. Additionally, Huazhu benefits from ancillary services, including sales of food and beverage, laundry, and other guest services. The company's strategic partnerships with online travel agencies and other distribution platforms further enhance its revenue by increasing visibility and bookings. Seasonal and promotional pricing strategies also contribute to revenue generation, particularly during peak travel seasons. Overall, Huazhu's diversified portfolio and extensive network of hotels enable it to capitalize on the growing demand for travel and accommodation in China.

Huazhu Group Ltd Financial Statement Overview

Summary

Huazhu Group Ltd exhibits strong financial performance with robust revenue growth and improved profitability margins. The company has effectively managed its operations to enhance profitability, although the high debt levels present a potential risk. Cash flow generation remains solid, supporting the company's financial stability. Continued focus on managing leverage and maintaining cash flow efficiency will be crucial for sustaining growth.

Income Statement

Huazhu Group Ltd has demonstrated strong revenue growth with a TTM increase of 15.8% and consistent improvement in profitability metrics. The gross profit margin has improved to 38.1% in TTM, and the net profit margin has increased to 15.5%, indicating enhanced operational efficiency. The EBIT and EBITDA margins have also shown positive trends, reflecting effective cost management. However, the company experienced a dip in gross profit margin from the previous year, which should be monitored.

Balance Sheet

The company's balance sheet shows a high debt-to-equity ratio of 3.11 in TTM, which poses a risk of financial leverage. However, the return on equity is strong at 32.0%, indicating effective use of equity to generate profits. The equity ratio is stable, suggesting a balanced asset structure. Despite the high leverage, the company has maintained a solid equity base.

Cash Flow

Huazhu Group Ltd has shown a positive free cash flow growth rate of 6.9% in TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.39, and the free cash flow to net income ratio is 0.89, reflecting efficient cash conversion. While the cash flow metrics are strong, the operating cash flow coverage ratio has decreased compared to the previous year, which warrants attention.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	24.80B	23.89B	21.88B	13.86B	12.79B	10.20B
Gross Profit	9.50B	9.86B	7.54B	1.60B	1.50B	467.00M
EBITDA	7.94B	6.54B	7.15B	1.32B	1.67B	-384.00M
Net Income	3.96B	3.05B	4.08B	-1.81B	-420.00M	-2.06B
Balance Sheet
Total Assets	63.55B	62.55B	63.53B	61.51B	63.27B	65.80B
Cash, Cash Equivalents and Short-Term Investments	13.16B	11.08B	9.13B	5.37B	7.71B	10.93B
Total Debt	37.16B	35.45B	35.88B	43.89B	44.16B	44.98B
Total Liabilities	51.53B	50.28B	51.28B	52.70B	52.23B	54.37B
Stockholders Equity	11.88B	12.18B	12.13B	8.73B	10.94B	11.33B
Cash Flow
Free Cash Flow	6.80B	6.62B	6.77B	511.00M	-333.00M	-1.17B
Operating Cash Flow	7.64B	7.52B	7.67B	1.56B	1.34B	609.00M
Investing Cash Flow	-5.15B	-2.24B	-1.48B	-522.00M	-1.40B	-8.10B
Financing Cash Flow	-3.19B	-5.50B	-3.72B	-1.39B	-1.80B	883.00M

Huazhu Group Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.84
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1179, the sentiment is Positive. The current price of 29.84 is below the 20-day moving average (MA) of 37.17, below the 50-day MA of 34.16, and above the 200-day MA of 28.86, indicating a bullish trend. The MACD of 1.02 indicates Positive momentum. The RSI at 63.32 is Neutral, neither overbought nor oversold. The STOCH value of 73.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1179.

Huazhu Group Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1179	73 Outperform	HK$113.47B	28.13	30.91%	3.67%	5.49%	9.44%
1221	64 Neutral	HK$1.71B	16.20	2.49%	1.95%	-7.90%	58.19%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0069	59 Neutral	HK$17.54B	17.95	2.40%	3.05%	-0.04%	-15.56%
1270	58 Neutral	HK$1.66B	33.45	0.50%	3.37%	-22.04%	-90.42%
0045	55 Neutral	HK$10.00B	-12.76	-2.21%	―	-12.90%	-95.96%
0078	40 Neutral	HK$485.34M	-0.27	-29.62%	―	-0.60%	34.74%

Huazhu Group Ltd Corporate Events

H World Group Limited Reports Strong Q3 2025 Financial Results

H World Group Limited announced its unaudited financial results for the third quarter of 2025, reporting a 17.5% year-over-year increase in hotel turnover to RMB30.6 billion. The company’s revenue rose by 8.1% to RMB7.0 billion, surpassing previous guidance. Notably, the manachised and franchised revenue increased by 27.2%, exceeding expectations. The company’s net income for the quarter was RMB1.5 billion, with an EBITDA of RMB2.5 billion. The results reflect strong operational performance, particularly in the Legacy-Huazhu segment, despite a slight decline in the Legacy-DH segment.

H World Group to Announce Q3 2025 Financial Results on November 17

H World Group Limited has announced that its audit committee will meet on November 17, 2025, to review and approve the company’s unaudited financial results for the third quarter of 2025. The results will be published on the same day after the Hong Kong Stock Exchange trading hours and before the U.S. market opens. The company will also host a conference call to discuss the results, which will be accessible via a live webcast and available for replay for twelve months.

H World Group Limited Files Unaudited Financial Statements with SEC

H World Group Limited announced the filing of its unaudited condensed consolidated financial statements for the six months ended June 30, 2025, with the U.S. Securities and Exchange Commission. This filing is part of the company’s ongoing regulatory compliance and is incorporated into its registration statement on Form F-3. The announcement highlights the company’s commitment to transparency and adherence to international financial reporting standards.