HTHT 2Q26 First Take: Overall, the company delivered a strong print for the quarter, with revenue beating and guidance raised across the board, alongside a new $2.5bn three-year shareholder return plan.
The caveat: same-store RevPAR for mature hotels turned negative for the first time in three quarters, and overseas growth swung to a decline.1) Revenue beat; guidance raised across the board.
2Q revenue was RMB 7.1bn (+10.8% YoY vs. cons. +5.5%), accelerating QoQ.Franchise revenue rose 25.2% YoY to RMB 3.6bn, driven by sustained room growth.
It was the fastest pace in four quarters and the key driver of the beat.Owned-and-operated revenue was ~RMB 3.2bn, down 4.9% YoY.
The decline reflects ongoing closures of older leased hotels and lower overseas leased-hotel revenue.On 1H results, the company raised its full-year revenue growth guide to 4-8% from 2-6%.
Franchise revenue guidance moved to 16-20% from 12-16%.2) RevPAR growth cooled, with same-store turning negative.
China RevPAR rose 1.3% YoY to RMB 238 per night.ADR increased 2.8% YoY to RMB 298, with mix-driven premium remaining the core driver.
OCC was 79.8%, down 120bps YoY.Notably, same-store RevPAR for mature hotels (≥18 months) fell 3.0% YoY.
Same-store ADR was broadly flat, while OCC dropped 240bps, indicating broad-based occupancy softness at legacy stores. Dolphin Research estimates this reflects a pre-summer demand cooldown and cannibalization from new openings.Overseas (HWI) RevPAR declined 3.8% YoY.
We attribute this to Middle East geopolitics and low pricing during early ramp in Southeast Asia.3) Openings slowed modestly, but the pipeline remains ample.
HTHT added a net 324 hotels in 2Q (501 openings, 177 closures), slightly below 357 in 1Q.Net adds reached ~681 in 1H. Against the full-year guide of 2,200-2,300 openings, 2H will need to pick up. The pipeline stands at 3,089, skewed to mid-to-upscale, and management reaffirmed the full-year opening target.4) Profit delivery across the board, with asset-light benefits continuing to accrue.
With franchise mix rising further (50.3% in 1H, +490bps YoY), GPM expanded 180bps to 43.4%.OpEx was broadly stable, lifting OPM by 330bps to 31.1%. Adj. EBITDA reached RMB 2.73bn, +20% YoY. For more details, follow Dolphin Research for subsequent commentary and Trans. $H World(HTHT.US)$HWORLD-S(01179.HK)