China Consumer - Hotel: 3Q26 Preview; Resilient RevPAR Trend & Accelerating Pace of New Openings

We expect China hotel RevPAR to stay resilient in 3Q26 despite extreme weather impact in summer. We estimate Atour/H World's China blended RevPAR to slightly increase/flattish yoy. According to STR, China hotel industry blended RevPAR recovered to +1.5%/+0.2% yoy in Sep/Aug following -2.8% yoy in July. The pace of new openings has been picking up in 3Q26. We continued to observe solid retail momentum for Atour in 3Q26 and see potential upside in its full-year retail guidance. We lift our 2026E revenue projection for Atour to +33% yoy (from +30% yoy), assuming +48% yoy in retail revenue (from +40% yoy). We estimate Atour's 3Q26 net revenue at Rmb3.28bn (+25% yoy) and non-GAAP net profit at Rmb590m (+21% yoy). For H World, we estimate 3Q26 net revenue of Rmb7.35bn (+5.6% yoy), adjusted net income of Rmb1.7bn (+11.9% yoy) and adjusted EBITDA of Rmb2.72bn with a 37% margin. Looking into 4Q26, RevPAR volatility might remain as the base goes higher but could be more resilient than the market