Anchor the value reassessment opportunity of ecological upgrading, many securities firms are bullish on the growth space of H World Group Limited Sponsored ADR group (01179, HTHT.US).

If stable finance and excellent operations are the internal cornerstones of a company's value, then its performance in the capital market and its position in the industry competition are the most direct external confirmation of this value. Since 2025, the stock price of H World Group Limited Sponsored ADR Group (01179, HTHT.US) has been steadily rising, breaking through $48 on December 12, reaching a new high since 2022. The positive feedback from the capital market is not only a recognition of the company's performance in the past year, but also demonstrates investors' firm confidence in its clear business ecosystem construction path and long-term development potential. This recognition is not accidental, but rather stems from H World Group Limited Sponsored ADR solid accumulation in performance growth, strategic implementation, and ecological upgrade, with its strategic transformation continually receiving dual affirmation from capital and the industry. Recently, many brokerages have shown highly consistent optimistic ratings for H World Group Limited Sponsored ADR group, with top institutions such as JPMorgan, CICC, Huatai, and Guosen issuing updated reports, giving H World Group Limited Sponsored ADR "hold" or "buy" investment ratings. What is more worth noting is that H World Group Limited Sponsored ADR's revenue and business expansion progress this year have exceeded market analysts' predictions, and the company's ability to "deliver on promises" or even "exceed promises" in a complex environment is key to gaining long-term capital trust. This also indicates that the company's operational strategy and development quality have surpassed market expectations, thus driving a reevaluation of its valuation. Amidst industry cycles, RevPAR elasticity drives performance recovery Since 2025, the structural adjustment in the domestic hotel industry has intensified, with supply and demand contradictions still existing. Influenced by various factors such as the pace of consumer confidence recovery, changes in the business travel market growth rate, and the diversion of emerging accommodation methods, the industry as a whole is facing certain operational pressures. However, in this context, the pattern of "the strong get stronger" in the hotel industry has become more evident, with resources accelerating towards top-tier chain brands, and the continued release of the structural opportunities of the increasing chainization rate in the industry. Guosheng data shows that the hotel industry is at a two-year adjustment bottom, with the supply-demand relationship expected to be rebalanced in the future: leisure tourism is steadily growing, while business travel demand has a lower base; leading reserved stores have fallen from high levels, with an operational strategy shifting from OCC priorities to optimal RevPAR driving price stabilization. In the long term, China's service consumption accounts for 46% and still has room for improvement, following the continuous increase in accommodation expenditure as seen in the US in the 1980s. Structural opportunities on the supply side are emerging: under the weakening rental dividend, franchisees are returning to investment attributes, estimating that the chainization rate has increased from 40% (72% in the US) to 60-70%, corresponding to a 30-109% room volume space; among them, the leading market share abroad could potentially double. In this context, H World Group Limited Sponsored ADR, as an industry leader, has demonstrated a steady overall operational performance, showing strong resilience across industry cycles. Reviewing the latest financial reports of H World Group Limited Sponsored ADR group, a set of data confirms its growth momentum: while steadily increasing in scale, single-store operational efficiency remained stable in the third quarter, with ADR stabilizing year-on-year and surpassing, OCC continuously maintaining a high level of 84.1%, far exceeding similar brands, and RevPAR holding steady year-on-year. This steady performance during the industry adjustment period reveals that the integration of H World Group Limited Sponsored ADR group's strategic transformation and operational resilience has been effective. According to a CICC research report, considering that the hotel management company's reserved store count shrank at the end of the third quarter, the bank predicts that the industry's supply growth rate in 26 may further slow down, while the industry's RevPAR is expected to stabilize; H World Group Limited Sponsored ADR, as an industry leader, is expected to continue to increase its market share, with RevPAR and new store openings driving revenue growth in a more balanced manner. Looking at the long-term trend of the industry, the scale of closures for individual hotels in China is expected to continue to expand over the next five years. H World Group Limited Sponsored ADR and other leading companies, with advantages such as brand influence, a sound supply chain, and professional operations, are expected to continue to absorb market share, becoming core beneficiaries in the structural transformation of the industry. Three major advantages build industry moat, establishing a solid foundation for long-term growth value Looking back at the recovery journey of H World Group Limited Sponsored ADR, its continuous favor among the market and investors can be attributed to the company's three irreplicable competitive barriers that support the resilience of its performance. With its three systematic core capabilities of "brand, membership, and technology", H World Group Limited Sponsored ADR has not only achieved continuous growth in performance but has also evolved from a traditional hotel operator to a high-value ecological platform enterprise. Currently, with over twenty years of accumulation, H World Group Limited Sponsored ADR has built the most competitive membership system in the industry. The latest data shows that by the end of the third quarter, the total number of members of H World Group Limited Sponsored ADR exceeded 300 million, with a year-on-year growth of 17.3%. The number of nights reserved by members increased by 19.7% year-on-year, exceeding 66 million nights, accounting for 74%, showing significant high stickiness and high repeat purchase rate. The strong membership base brings in a high proportion of direct sales, reducing the company's dependence on OTA platforms and increasing the profitability of each store. Secondly, H World Group Limited Sponsored ADR's ability to operate with low assets has become a benchmark in the industry. Currently, the group's management of franchising and franchisee operations has become one of the core engines driving overall revenue growth. Behind this success is the resonance between H World Group Limited Sponsored ADR's diverse product matrix and its partnership business, as well as the high recognition of its brand value and management model by franchisees. Through supply chain integration, H World Group Limited Sponsored ADR upholds a collaborative concept of "growing the market cake together with franchisees", providing integrated solutions for franchisees from property selection, product design to digital tools, helping to reduce risks and improve efficiency. In actual operation, franchise hotels continue to enjoy the premium of H World Group Limited Sponsored ADR's brand and membership dividends, with high occupancy rates bringing in stable cash flow, cost control and standardized service further ensuring returns, laying a solid foundation for the release of brand value and deepening of partnership strategies. An ample reserve of hotels awaiting opening is a direct recognition of the market's recognition of H World Group Limited Sponsored ADR's operational value. Furthermore, digitalization is an important part of H World Group Limited Sponsored ADR's core competitiveness. CITIC SEC research shows that H World Group Limited Sponsored ADR continues to drive continuous digital product innovation through technological innovation and management processes. From being the industry's first self-developed hotel management system to digitalization of guest room positions, the launch of online self-service room selection, the Huazhanggui front desk model, and the current comprehensive GOP management products, H World Group Limited Sponsored ADR's data-driven digital platform supports the strategy of a thousand cities and ten thousand stores, controlling hotel operating costs, and focusing on customer experience innovation. In terms of supply chain, with its scale effect, Zebra Easy Purchase provides franchisees with cost-effective building and operation supplies, with franchisee procurement rate reaching 80% in the construction phase and 100% in the operation phase, ensuring standardized and efficient operation of stores. It is evident that H World Group Limited Sponsored ADR's digital capabilities have established a positive cycle of "cost reduction, efficiency improvement, and enhanced user experience," becoming an important support for its resilience across industry cycles. Soochow also states that H World Group Limited Sponsored ADR group, as a benchmark in the hotel industry, has built competitive barriers through its brand and membership systems, with structural upgrades driving operational data ahead of the industry. Possessing medium and long-term growth drivers, brand effects open up future potential If industry opportunities and fundamental resilience are the foundation of H World Group Limited Sponsored ADR's value, then clear growth drivers and reasonable long-term goals further open up its future growth space. Currently, H World Group Limited Sponsored ADR group's brand matrix exhibits characteristics of "depth and full coverage": economy and mid-tier brands such as HanTing, GreenTree, and Orange firmly establish the company's foundation, injecting strong momentum into the strategic goal of "a thousand cities and ten thousand stores 2.0". The lower-tier market is the core source of incremental growth for H World Group Limited Sponsored ADR's future expansion. CITIC SEC pointed out that there is a huge difference in chainization rates in different-tier cities in China, with first-tier cities at 44%, second-tier at 36%, third-tier at 25%, and fourth-tier and below at 14%, while chainization rates in mature markets such as the US and Europe generally exceed 70%. The lower-tier market has become a core battlefield for increasing chainization rates, with chainization rates in third-tier and below cities in China still below 20%, significantly lower than first and second-tier cities. As consumption upgrades penetrate into lower-tier cities and the disadvantages of individual hotels become apparent in operational efficiency, brand awareness, and digital capabilities, the industry is accelerating its shift towards "stock consolidation", with H World Group Limited Sponsored ADR innovating while holding onto its base of economy brands and introducing the Haitian self-service hotel, reconfiguring a "low investment, high turnover" mode through full digitalization. Moreover, in the medium to premium high-end track segment long monopolized by international high-end hotel brands, H World Group Limited Sponsored ADR has made breakthrough progress. By the end of the third quarter, H World Group Limited Sponsored ADR's number of in-operation and pending open mid-to-high-end stores had successfully exceeded 1600, a year-on-year increase of 25.3%. At the 2025 Partner Conference, H World Group Limited Sponsored ADR launched the new mid-to-high-end brand "GreenTree Grand View", entering the high-end market with an eastern restraint and warmth, embarking on a new journey to build a world-class oriental brand. Guosen believes that H World Group Limited Sponsored ADR has crossed the cycle for twenty years, redefining the limited-service hotel industry with its "product-traffic-return-scale" model. Its 15-year experience in the market and CAGR in stores and performance both exceeding 20%, backed by the visionary strategies of the founder and management team and efficient digital organization, the company has created a growth flywheel for the Chinese limited-service hotel industry: 1) Strong products: efficient iteration from economy to mid-to-high-end multiple brands, HanTing grows against the trend, GreenTree leads midrange, Orange develops differentially, meeting the needs of differentiated customer groups; 2) Strong traffic: membership size exceeding 300 million to lead the industry, with central reservations accounting for over 60%, enhanced by big data for systematic revenue management; 3) Strong returns: RevPAR ahead of industry peers by 30-80%, per room ratio at 0.17, supply chain reducing costs by over 20%, driving franchisee investment willingness; 4) Strong expansion: franchise store growth maintained at 15-20%. Moreover, Guosheng points out in its research report that while the hotel market supply is still increasing, there are signs of improvement in operating performance of hotel companies. H World Group Limited Sponsored ADR continues to enhance its core competitive advantages through product upgrades, excellent service, and membership system building, with excellent expansion and operational capabilities. It is gradually eliminating low-quality and poorly performing economy hotels, advancing the expansion of high-quality mid-to-high-end hotels, with profit margin expected to continue to rise under the light asset strategy. Taking a comprehensive view of the market, looking forward to 2026, the value reassessment opportunities for H World Group Limited Sponsored ADR group are clearly visible. In the short term, as the industry's supply-demand relationship gradually improves, the company's operational resilience is expected to be further realized as it navigates through the cycle, with RevPAR elasticity release potentially driving performance recovery and providing a basis for valuation support; in the medium term, the trend of increasing chainization rate under supply-side reform continues, and H World Group Limited Sponsored ADR, with its brand, operational, and digital advantages, may further strengthen its penetration in the consolidation of individual hotel units, with synergistic effects of scale expansion and profit improvement to be expected; in the long term, the dual drive of market layout in lower-tier cities and upgrading of mid-to-high-end brands, coupled with the moat built by membership ecology and digital capabilities, may continuously reinforce the company's growth attributes. If the above logic unfolds gradually, the investment value of the company may be further highlighted, making it a long-term favorable prospect for investors.