Atour Lifestyle Holdings Ltd (NASDAQ: ATAT)

Sector: Consumer Cyclical Industry: Lodging CIK: 0001853717
Market Cap 5.47 Bn
P/B 12.05
P/E 31.48
P/S 5.16
ROIC (Qtr) 195.91
Div Yield % 2.06
Rev 1y % (Qtr) 38.42
Total Debt (Qtr) 230.70 Mn
Debt/Equity (Qtr) 0.44
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About

Atour Lifestyle Holdings Ltd (ATAT) is a prominent player in the Chinese tourism industry, offering a wide range of lifestyle and leisure services. The company's operations are spread across the hotel and resort sector, tour and travel services, and casual dining. Atour's hotel and resort operations segment is a significant contributor to its revenue. The company manages a portfolio of luxury hotels and resorts under the Atour Hotel brand, known for its high-end amenities and services. These establishments cater to the increasing demand for luxury...

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Investment thesis

Bull case

  • Strong operating cash flow of 277.03M provides robust 1.20x coverage of total debt 230.70M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 375.06M provide 7.67x coverage of short-term debt 48.88M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 277.03M provides exceptional 737.37x coverage of minority interest expenses 375702.25, showing strong core operations.
  • Operating cash flow of 277.03M provides exceptional 758.93x coverage of interest expenses 365028.09, showing strong debt service capability.
  • Strong tangible asset base of 1.25B provides 5.44x coverage of total debt 230.70M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 277.03M barely covers its investment activities of (213.24M), with a coverage ratio of -1.30, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (213.24M) provide weak support for R&D spending of 24.30M, which is -8.77x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • High receivables of 64.37M relative to inventory of 22.28M (2.89 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 267.69M represents just -76.24x of debt issuance (3.51M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 277.03M barely covers operating expenses of (3.12M) with a -88.93 ratio, suggesting thin operational efficiency margins and limited flexibility.

Peer comparison

Companies in the Lodging
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MAR Marriott International Inc /Md/ 98.24 Bn 37.77 3.75 17.08 Bn
2 HLT Hilton Worldwide Holdings Inc. 74.93 Bn 51.43 6.22 13.09 Bn
3 HTHT H World Group Ltd 16.57 Bn 29.82 4.76 5.22 Bn
4 H Hyatt Hotels Corp 16.03 Bn -308.35 2.26 4.56 Bn
5 WH Wyndham Hotels & Resorts, Inc. 7.74 Bn 49.28 3.77 2.63 Bn
6 CHH Choice Hotels International Inc /De 6.15 Bn 28.50 5.74 2.03 Bn
7 ATAT Atour Lifestyle Holdings Ltd 5.47 Bn 31.48 5.16 0.23 Bn
8 CVEO Civeo Corp 0.40 Bn -13.95 0.64 0.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.63 1.88
EV to Cash from Ops. EV/CFO 9.40 35.03
EV to Debt EV to Debt 8.89 3.56
EV to EBIT EV/EBIT 8.49 8.28
EV to EBITDA EV/EBITDA 7.92 15.04
EV to Free Cash Flow [EV/FCF] EV/FCF 9.74 42.92
EV to Market Cap EV to Market Cap 0.38 0.84
EV to Revenue EV/Rev 1.94 0.57
Price to Book Value [P/B] P/B 12.05 -4.94
Price to Earnings [P/E] P/E 31.48 -9.64
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 1.70
Dividend Payout Ratio % Div Payout % (Qtr) 28.20 7.38
Dividend per Basic Share Div per Share (Qtr) 0.42 0.85
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 3.06 7.54
Interest Coverage Int. cover (Qtr) 809.79 -155,266.31
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -1.23 -4.84
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -2.57 122.26
Dividend Growth (1y) % Div 1y % (Qtr) -6.67 -2.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 26.12 -107.49
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.00 3.84
EBIT Growth (1y) % EBIT 1y % (Qtr) 37.77 12.05
EBT Growth (1y) % EBT 1y % (Qtr) 37.88 2.05
EPS Growth (1y) % EPS 1y % (Qtr) 25.18 -10.22
FCF Growth (1y) % FCF 1y % (Qtr) 15.43 -17.22
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 48.89 5.20
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.14 0.47
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.13
Cash Ratio Cash Ratio (Qtr) 0.84 0.54
Current Ratio Curr Ratio (Qtr) 2.16 1.20
Debt to Equity Ratio Debt/Equity (Qtr) 0.44 1.44
Interest Cover Ratio Int Coverage (Qtr) 809.79 -155,266.31
Times Interest Earned Times Interest Earned (Qtr) 809.79 -155,266.31
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -228.61
EBIT Margin % EBIT Margin % (Qtr) 164.92 -214.73
EBT Margin % EBT Margin % (Qtr) 23.13 -246.57
Gross Margin % Gross Margin % (Qtr) 44.10 36.71
Net Profit Margin % Net Margin % (Qtr) 16.20 -250.50