TONGCHENGTRAVEL acquires the light asset company Wanda Hotel Management, optimistic about the long-term growth of China's hotel management market

On April 17th, TONGCHENGTRAVEL (00780) announced that it has reached an agreement with Wanda Hotel Development (00169) regarding the acquisition of 100% equity in its wholly-owned subsidiary Wanda Hotel Management (Hong Kong) Co., Ltd. (hereinafter referred to as Wanda Hotel Management). The transaction price is approximately RMB 2.49 billion, with a valuation multiple equivalent to 9.5 times its adjusted EBITDA for the fiscal year 2023. Wanda Hotel Management is part of the light asset sector under Wanda Hotel Development, with projected revenue of HKD 890 million in 2024. Wanda Hotel Management's business scope includes hotel management, hotel design, and construction, and it owns nine major brands: Wanda Ruihua (luxury hotel), Wanda Wenhua (deluxe hotel), Wanda Jiahua (high-end full-service hotel), Wanda Jinhua (high-end select hotel), Wanda Yihua (high-end lifestyle hotel), Wanda Anbo (high-end customized hotel), Wanda Meihua (mid-to-high-end design hotel), Wanda Yuehua (mid-range hotel), and Wanda Anyue (mid-to-high-end hotel). As of the end of 2024, Wanda Hotel Management operates a total of 204 hotels, with over 40,200 rooms, and an additional 376 hotels have been signed and are awaiting opening. TONGCHENGTRAVEL expressed optimism about the growth potential of the Chinese hotel management market and believes that Wanda Hotel Management has a comprehensive portfolio of high-end hotel brands, significant influence in the domestic market, and an experienced management team, which will significantly enhance the company's competitiveness in the high-end hotel sector. Industry insiders noted that Wanda Hotel Management's hotel management business possesses a mature brand matrix and operational system, making it a rare asset in the high-end hotel chain sector. After the completion of the acquisition of Wanda Hotel Management, TONGCHENGTRAVEL's hotel management business will fill the "puzzle" of high-end hotels. Previously, the main brands of TONGCHENGTRAVEL's subsidiary, eLong Hotel Technology platform, primarily included Elegant Hotels, eLong Hotels, Meihua Lize Hotels, and Meihua Hotels, focusing mainly on mid-to-high-end, mid-range, and economy brands. It is reported that after the acquisition is completed, the Wanda hotel brand will maintain independent development. The transaction is currently in progress, and specific details are pending further announcement