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Thomas Barwick Elevator Pitch I rate Atour Lifestyle Holdings Limited ( NASDAQ: ATAT ) as a Hold. Previously, I wrote about the Lunar New Year holiday travel-related data and the relevant read-throughs for ATAT's Mainland Chinese hotel business in my February 21, 2024 article . My current update is focused on Atour Lifestyle's Q1 2024 financial results which were recently announced on May 23.

I have made the choice to keep my existing Hold rating for ATAT unchanged. Although the revenue outlook for Atour Lifestyle's hotel and retail businesses is favorable, I have concerns about the increase in the company's selling and marketing costs and the uncertainty regarding future capital return. Core Hotel Business's Growth Outlook Is Positive ATAT's top line grew significantly by +90% YoY to RMB1,468 million in the first quarter of 2024 as disclosed in its earnings announcement .



The company's latest quarterly revenue beat the sell-side analysts' consensus forecast of RMB1,370 million by +7%. Atour Lifestyle's revenue generated from its hotel business, including both its manachised hotels and leased hotels, increased by +58% YoY to RMB1,004 million. The core hotel business contributed 68% of the company's recent first quarter top line.

In my view, it is likely that ATAT's core hotel business will continue to register robust top line growth in the future, taking into account two key factors. The first key factor is that Atour Lifestyle's hotel business has room for further top line e.

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