Key Takeaways:
H World Group reported second-quarter revenue of RMB7.1 billion, up 10.8 percent year-over-year, and raised its full-year 2026 guidance.
"During the second quarter, we delivered another quarter of RevPAR expansion," Chief Executive Officer Jin Hui said. Blended H World China ADR rose 2.6 percent year-over-year, fueling a 1.1 percent lift in blended RevPAR to RMB238.
Manachised and franchised revenue climbed 25.2 percent to RMB3.6 billion, lifting operating margin to 31.1 percent from 27.8 percent a year earlier. Net income attributable to the company rose 2.1 percent to RMB1.6 billion, while adjusted EBITDA reached RMB2.7 billion, up from RMB2.3 billion. H World China revenue grew 14.9 percent to RMB5.9 billion, while H World International revenue fell 5.8 percent to RMB1.3 billion.
The board approved a US$2.5 billion three-year shareholder return plan and declared a cash dividend of about US$275 million, or US$0.87 per ADS. H World raised its 2026 group revenue growth forecast to 4 percent to 8 percent, from 2 percent to 6 percent previously. Shares rose 8.72 percent to $45.53 after the results.
H World operated 13,539 hotels with 1,335,445 rooms as of June 30, with 3,089 hotels in its pipeline. The company opened 498 hotels in China during the quarter and remains on track to hit its full-year gross opening guidance of 2,200 to 2,300 hotels, Jin said. First-half revenue rose 11.0 percent to RMB13.1 billion, with M&F hotels accounting for 50.3 percent of revenue, up from 45.4 percent a year earlier.
H World International's operational performance was hit by the Middle East conflict and expansion into developing Southeast Asian countries with lower ADRs still in their ramp-up period, Jin said. HWI blended RevPAR fell 3.8 percent year-over-year to US$98, with occupancy down 3.5 percentage points to 70.5 percent. The company held RMB14.2 billion in cash and cash equivalents as of June 30, against total debt of RMB4.2 billion.
The guidance raise signals management expects China's domestic travel demand to keep strengthening, with M&F revenue growth forecast at 16 percent to 20 percent for the year. Investors will watch the next quarterly report for whether same-hotel RevPAR, which fell 3.0 percent in the quarter, can turn positive as newly opened hotels mature.
This article is for informational purposes only and does not constitute investment advice.
