H World Group (HTHT) AI Stock Analysis

• Market Cap: $10.16B
• Dividend Yield: 4.59%
• Average Volume (3M): 1.73M
• Price to Earnings (P/E): 24.4
• Beta (1Y): 0.39
• Revenue Growth: 5.20%
• EPS Growth: -11.08%
• Country: US
• Employees: 28,502
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Travel Lodging
• EPS (TTM): 0.35
• Shares Outstanding: 310,509,460
• 10 Day Avg. Volume: 1,389,470
• 30 Day Avg. Volume: 1,726,133
• PEG Ratio: -1.51
• Price to Book (P/B): 104.28
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.78K
• 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: $45.75
• Price Target Upside: 35.36% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 70 Outperform
• Price Target: $39.00 ▲(15.38%Upside)

H World Group's overall stock score reflects strong financial performance, balanced by a neutral technical outlook and moderate valuation. The positive trajectory in financial health and strategic growth initiatives are significant strengths, but challenges in market conditions and RevPAR declines temper the outlook.

Positive Factors

Business Model

HTHT's asset-light model offers strong operating leverage and downside protection in a softer macro environment.

Strategic Focus

The company reaffirmed its FY25 guidance, underscoring confidence in its fundamentals and strategic focus on developing emerging leisure segments and B2B corporate demand.

Negative Factors

Market Uncertainties

Management highlighted increased uncertainties in achieving flat RevPAR for FY25.

Revenue Pressures

HTHT's revenue guidance may seem on the softer side, primarily driven by DH's accelerated transition to an asset-light model, resulting in 15% of its O/L hotel portfolio coming offline, putting pressure on revenue.

H World Group Business Overview & Revenue Model

Company Description

H World Group (HTHT), formerly known as Huazhu Group Limited, is a leading hotel management company based in China. The company operates a wide range of hotel brands catering to different market segments, including economy, mid-scale, and upscale hotels. With a strong presence in China, H World Group offers a variety of hospitality services, including accommodation, food and beverage, and other ancillary services. The company focuses on providing quality and affordable lodging options to both business and leisure travelers.

How the Company Makes Money

H World Group generates revenue primarily through its hotel operations, which include room rentals, food and beverage sales, and other guest services. The company operates under a franchise and management contract model, where it derives income from franchise fees, management fees, and room rentals. Franchise fees are collected from hotel owners who wish to operate under H World Group's brand names, while management fees are earned for managing hotels on behalf of property owners. Additionally, the company benefits from its loyalty program, which encourages repeat business and enhances customer retention. Strategic partnerships and expansion of its brand portfolio also contribute to the company's revenue growth.

H World Group Financial Statement Overview

Summary

H World Group exhibits strong financial performance with robust revenue and profit growth, improving margins, and efficient cash flow management. The company's effective use of leverage to generate returns and stable equity position contribute positively to its financial health.

Income Statement

H World Group's income statement shows strong revenue growth, with a significant increase from 2022 to 2024. The gross profit margin improved notably as gross profit grew faster than revenue, indicating improved cost management. The net profit margin has recovered from negative in 2022 to solid positive figures in 2023 and 2024, reflecting profitability restoration. EBIT and EBITDA margins have also improved significantly, showing operational efficiency gains.

Balance Sheet

The balance sheet reveals a stable equity position with gradual improvements. The debt-to-equity ratio remains high, indicating leveraged operations, but the company has managed to stabilize its stockholders' equity. The equity ratio has shown slight improvement, suggesting a better asset-to-equity balance. Return on equity improved significantly in 2024, showcasing effective utilization of shareholder funds.

Cash Flow

Cash flow analysis indicates strong operational cash flow generation, outpacing net income, which suggests quality earnings. Free cash flow has also grown, supporting future investments or debt reduction. The free cash flow to net income and operating cash flow to net income ratios indicate efficient cash generation relative to reported profits.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
23.89B	21.88B	13.86B	12.79B	10.20B
	Gross Profit
9.86B	7.54B	1.60B	1.50B	467.00M
	EBIT
5.20B	4.71B	-197.00M	410.00M	-1.22B
	EBITDA
6.54B	7.15B	549.00M	1.67B	-384.00M
	Net Income Common Stockholders
3.05B	4.08B	-1.81B	-420.00M	-2.06B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.08B	9.13B	5.37B	7.71B	10.93B
	Total Assets
62.55B	63.53B	61.51B	63.27B	65.80B
	Total Debt
35.45B	35.88B	43.89B	44.16B	44.98B
	Net Debt
27.97B	28.93B	40.30B	39.05B	37.95B
	Total Liabilities
50.28B	51.28B	52.70B	52.23B	54.37B
	Stockholders Equity
12.18B	12.13B	8.73B	10.94B	11.33B
Cash Flow		Free Cash Flow
6.62B	6.77B	511.00M	-333.00M	-1.17B
	Operating Cash Flow
7.52B	7.67B	1.56B	1.34B	609.00M
	Investing Cash Flow
-2.24B	-1.48B	-522.00M	-1.40B	-8.10B
	Financing Cash Flow
-5.50B	-3.72B	-1.39B	-1.80B	883.00M

H World Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 33.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTHT, the sentiment is Negative. The current price of 33.8 is below the 20-day moving average (MA) of 35.36, below the 50-day MA of 35.05, and below the 200-day MA of 34.01, indicating a bearish trend. The MACD of -0.44 indicates Positive momentum. The RSI at 40.50 is Neutral, neither overbought nor oversold. The STOCH value of 12.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HTHT.

H World Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLT	73 Outperform	$58.80B	39.02	-41.19%	0.24%	7.43%	38.52%
HTHT	70 Outperform	$10.16B	24.41	28.90%	4.59%	5.20%	-11.08%
H	70 Outperform	$12.86B	17.45	22.31%	0.45%	-7.38%	19.62%
MAR	70 Outperform	$70.64B	29.38	-144.82%	1.04%	5.45%	-9.50%
WH	67 Neutral	$6.15B	18.98	53.31%	2.05%	4.79%	48.48%
IHG	64 Neutral	$17.32B	29.21	-27.16%	4.02%	6.34%	-11.99%
Sector *	62 Neutral	$6.86B	11.07	2.77%	4.27%	2.66%	-24.95%