Why did profit grow faster than revenue?

  • In the third quarter of 2026, Jin Jiang Hotels posted revenue of 3.878 billion yuan, up 4.39% year over year, and net profit of 510 million yuan, up 35.88% year over year.
  • Gross margin was 42.98% in the same period, up 1.29 percentage points year over year. Huatai Securities attributed the improvement to franchise expansion and better operations at existing directly operated hotels, and believes improved operating efficiency supported earnings growth.

How much did domestic and overseas hotel operations improve?

  • Third-quarter revenue per available room at domestic limited-service hotels fell 2.23% year over year, a slightly narrower decline than the 2.35% drop in the second quarter. Occupancy performance was stronger than room rates.
  • The same metric for overseas hotels rose 0.75% year over year, turning positive from a 5.21% decline in the second quarter; it rose 12.69% at directly operated overseas hotels. The divergence between domestic and overseas trends also means the domestic revenue metric remained below its year-earlier level.

How did hotel openings and channel changes support operations?

  • A total of 360 hotels opened in the third quarter, more than the 306 in the first quarter and 343 in the second, with the pace of openings accelerating each quarter. At quarter-end, 14576 hotels were operating, including 9476 midscale hotels, which accounted for 65.01% of the total, up 0.52 percentage points from the end of the previous quarter.
  • The online direct booking rate at domestic limited-service hotels was 43.67% in the third quarter, up 12.49 percentage points year over year; revenue from ongoing franchise and labor dispatch services was 1.278 billion yuan. Huatai Securities believes growth in franchise services and the asset-light model could continue to improve earnings quality.

What role will the acquisition of the remaining equity stakes play?

  • At the end of September, the company announced plans to acquire the remaining 10% stakes in each of Vienna Hotels and Baisui Village Catering for approximately 811 million yuan. Upon completion, both will be wholly owned by the company; the report says integrating brands, channels and management resources could generate synergies.