Lyon: It is expected that the profit margin of H World Group Limited Sponsored ADR group (HTHT.US) still has room for improvement. The target price has been raised to $57.

Lyon released a research report saying that H World Group Limited Sponsored ADR (01179) saw its Revenue Per Available Room (RevPAR) in the fourth quarter of last year increase for the first time; its subsidiary Deutsche Hotel Group's cost control also helped improve profit margins, and led to a 76% year-on-year increase in adjusted EBITDA to 2.2 billion RMB. There is still room for improvement in H World Group Limited Sponsored ADR profit margins. Taking into account better than expected performance in overseas operations, the adjusted EBITDA forecast for the next two years has been raised by 6% to 7%. Due to the outstanding performance of Deutsche Hotel Group, the target price for H World Group Limited Sponsored ADR (HTHT.US) stock has been raised from $52 to $57; maintaining an "outperform" rating. The report stated that H World Group Limited Sponsored ADR management expects revenue growth in 2026 to be between 2% and 6%. Assuming revenue growth reaches the upper limit of 6%, with a net addition of 1,600 hotels, a 1.9% increase in RevPAR, the projected return in 2026 will be closer to 12.6% in 2024, rather than 12.9% in 2025. To exceed this expectation, there will need to be higher growth in RevPAR or a higher central reservation system booking rate.