10 Best Asian Stocks To Buy Now

2. H World Group (NASDAQ:HTHT)

Upside Potential: 70.20%

Average Analyst Price Estimate: $49.51

H World Group (NASDAQ:HTHT), formerly known as Huazhu Group is a Chinese company that is known as one the largest players in the global hospitality industry. H World Group (NASDAQ:HTHT) operates the business under three main models: leased and owned, franchised and manachised hotels.

In the leased and owned Model, H World Group (NASDAQ:HTHT) directly manages hotels that it either owns or rents. The Franchise Model involves independent hotel owners running their hotels under the company’s brand and standards. Whereas the Manachise model is a blend of management and franchise, where H World Group (NASDAQ:HTHT) manages hotels owned by third parties by offering them management expertise, brand recognition, and operational support while sharing the revenue, earning franchise fees and royalties.

This diversified approach enables H World Group (NASDAQ:HTHT) to maintain a robust presence in the hotel industry, with significant growth potential while managing risk and capital expenditure effectively. The combination of these models allows the company to optimize revenue streams, enhance brand recognition, and increase market penetration with relatively lower investment compared to traditional hotel ownership. As of December 31, 2023, H World Group (NASDAQ:HTHT) had 9,263 hotels in operation, including 607 leased and owned hotels, and 8,656 Manachised and franchised hotels.

The company has seen a notable rebound in both leisure and business travel, leading to higher occupancy rates. In the fourth quarter of 2023, the occupancy rate for hotels rose to 80.5%, up from 66.2% in the same quarter the previous year. This positive trend continued into 2024, with the occupancy rate reaching 77.2% in the first quarter, compared to 75.6% in the previous year.

H World Group’s (NASDAQ:HTHT) Revenue Per Available Room (RevPAR) has also experienced significant growth, recovering to 122% of pre-pandemic levels in 2023. This recovery was driven by increased Average Daily Rates (ADR) and better occupancy rates. For the first quarter of 2024, the company reported a RevPAR of RMB 216, marking a 3.1% year-over-year increase.

H World Group (NASDAQ:HTHT) is a strong investment opportunity due to its hotel management models which allow for rapid expansion with lower capital investment, recovery in both leisure and business travel, increase in occupancy rates and revenue per available room (RevPAR). The stock is trading at $29.09 as of August 14. Analysts have a consensus on the stock’s Buy rating, setting an average price target of $49.51 which represents a 70.20% upside potential.