EX-99.1 2 tm2418289d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

GreenTree Hospitality Group Ltd. Reports First Quarter of 2024 Financial Results

 

·Total revenues decreased 7.1% year over year to RMB352.2 million (US$48.8 million)[1]. Hotel revenues increased 8.8% year over year to RMB274.8 million.

 

·Income from operations was RMB72.2 million (US$10 million) compared to RMB52.3 million for the first quarter of 2023.

 

·Net income was RMB57.3 million (US$7.9 million) compared to RMB32.6 million for the first quarter of 2023.

 

·Adjusted EBITDA (non-GAAP)[2] increased 17.2% year over year to RMB109.4 million (US$15.2 million)[1].

 

·Core net income (non-GAAP)[3]increased 21.5% year over year to RMB60.7million (US$ 8.4million)[1]

 

SHANGHAI, June 25, 2024 /PRNewswire/ -- GreenTree Hospitality Group Ltd. (NYSE: GHG) ("GreenTree", the "Company", "we", "us" and "our"), a leading hospitality and restaurant management group in China, today announced its unaudited financial results for the first quarter of 2024.

 

First Quarter of 2024 Operational Highlights

 

Hotels

 

·A total of 4,256 hotels with 313,531 hotel rooms were in operation as of March 31, 2024.

 

·The Company opened 109 hotels and had a pipeline of 994 hotels contracted for or under development as of March 31, 2024.

 

·The average daily room rate was RMB169, an increase of 0.9% from RMB167 in the first quarter of 2023.

 

·The occupancy rate was 67.8%, down from 71.7% in the first quarter of 2023.

 

·Revenue per available room, or RevPAR, was RMB114, a 4.6% year-over-year decrease.

 

 

1 The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB 7.2203 on March 31, 2024 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20220103/.

 

2 .Adjusted EBITDA (non-GAAP) is calculated as net income plus other operating expenses, income tax expense, share of loss in equity investees, net of tax, interest expense, depreciation and amortization, losses from investment in equity securities and other general expenses, but excludes other operating income, interest income and other, net, gains from investment in equity securities, share of gains in equity investees (net of tax), and other income, net. The calculation of Adjusted EBITDA (non-GAAP) included in this report has been aligned according to the above mentioned definition.

 

3.Core net income is calculated as net income plus share-based compensation, losses from investments in equity securities (net of 25 % tax), other expense(net of 25% tax), one-time fees and expense, and other general expenses but excludes government subsidies ( net of 25% tax), gains from investment in equity securities (net of 25% tax), and other income (net of 25% tax).

 

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Restaurants

 

·A total of 185 restaurants were in operation as of March 31, 2024

 

·The AC (average check) was RMB59, a 5.8% year-over-year increase.

 

·The ADT (average daily tickets) was 94, down from 109 in the first quarter of 2023.

 

·The ADS (average daily sales per store) was RMB5,525, a decrease of 8.7% from RMB6,051 in the first quarter of 2023.

 

“Overall, we delivered some significant improvements in the first quarter with substantial increases in both operating and net incomes.

 

Conditions in our hotel business were mixed as consumer behavior continued to evolve in a more competitive environment while we are continuously upgrading a large portion of hotels in our portfolio. Against this scenario, we managed to deliver an 8.8% revenue increase year over year and a 21.1% increase in hotel Adjusted EBITDA. We believe our business matrix will improve as we are completing these upgrades and open more new hotels.

 

We made further progress in the repositioning of our restaurant business with an absolute focus on robust profitability. We grew our network of franchisees as we further expanded the number of street stores. We have completed our closure of the restaurants in the supermarket anchored regional shopping centers, due to less foot traffic to our stores. We have now completed this phase of our forward strategy and are focused on store count growth again in regions where we have strong brand recognition,” said Mr. Alex S. Xu, Chairman and Chief Executive Office of GreenTree.

 

First Quarter Of 2024 Financial Results

 

   Quarter Ended 
   March 31, 2023   March 31, 2023   March 31, 2023   March 31, 2023 
   RMB   RMB   RMB   RMB 
   Hotel   Restaurant   Elimination   Total 
Revenues                
Leased-and-operated revenues   82,073,240    89,376,893    (559,217)   170,890,916 
Franchised-and-managed revenues   169,480,457    963,919    -    170,444,376 
Wholesales and others   1,036,848    36,848,279    -    37,885,127 
Total revenues   252,590,545    127,189,091    (559,217)   379,220,419 

 

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   Quarter Ended 
   March 31, 2024   March 31, 2024   March 31, 2024   March 31, 2024   March 31, 2024 
   RMB   RMB   RMB   RMB   US$ 
   Hotel   Restaurant   Elimination   Total   Total 
Revenues                    
Leased-and-operated revenues   122,541,793    46,367,979    -    168,909,772    23,393,733 
Franchised-and-managed revenues   151,159,511    1,535,341    -    152,694,853    21,147,993 
Wholesales and others   1,144,727    29,753,299    (275,222)   30,622,804    4,241,209 
Total revenues   274,846,031    77,656,619    (275,222)   352,227,429    48,782,935 

 

Total revenues were 352.2 million (US$48.8 million)，a 7.1% year-over-year decrease.

 

Hotel revenues were RMB274.8 million (US$38.1 million), an 8.8% year-over-year increase. The increase was mainly attributable to an 8.9% year-over-year increase in the RevPAR of L&O hotels and more newly opened L&O hotels since the second quarter of 2023, offset by a 4.9% year-over-year decrease in the RevPAR of F&M hotels.

 

Restaurant revenues were RMB77.7 million (US$10.8 million), a 38.9% year-over-year decrease. The decrease was mainly due to the strategic repositioning of this business, closing unprofitable L&O stores and opening more F&M stores.

 

Total revenues from leased-and-operated, or L&O, hotels and restaurants were RMB168.9 million (US$23.4 million)[1], a 1.2% year-over-year decrease.

 

Total revenues from L&O hotels were RMB122.5 million (US$17 million)[1], a 49.3% year-over-year increase. The increase was primarily attributable to an 8.9% year-over-year increase in the first quarter RevPAR of L&O hotels and new L&O hotels opened.

 

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Total revenues from L&O restaurants were RMB46.4 million (US$6.4 million)[1], a 48.1% year-over-year decrease, mainly due to the closure of L&O restaurants and the year-over-year decrease in ADS.

 

Total revenues from franchised-and-managed, or F&M, hotels and restaurants were RMB 152.7million (US$21.1 million), a 10.4% year-over-year decrease.

 

Total revenues from F&M hotels were RMB151.2 million (US$20.9 million), a 10.8% year-over-year decrease. Initial franchise fees decreased 56.4% year-over-year, mainly due to the lower initial franchisee fee rate. Recurring franchisee management fees and others decreased 5.5% year-over-year, primarily due to a 4.9% decrease in F&M hotels' Revpar.

 

Total revenues from F&M restaurants were RMB1.5 million (US$0.2million), a 59.3% year-over-year increase, as we opened more F&M stores.

 

Total revenues from wholesale and others were RMB30.6 million (US$4.2 million), a 19.2% year-over-year decrease, which was mainly due to the decline in the wholesale segment of the restaurant business.

 

Total operating costs and expenses

 

   Quarter Ended 
   March 31, 2023   March 31, 2023   March 31, 2023   March 31, 2023 
   RMB   RMB   RMB   RMB 
   Hotel   Restaurant   Elimination   Total 
Operating costs and expenses                
Operating costs   134,236,998    109,219,983    (301,671)   243,155,310 
Selling and marketing expenses   11,075,999    4,939,580    -    16,015,579 
General and administrative expenses   46,092,069    11,663,076    -    57,755,145 
Other operating expenses   151,220    1,341,263    -    1,492,483 
Impairment loss of goodwill   -    -    -    - 
Other general expenses   11,664,345    -    -    11,664,345 
Total operating costs and expenses   203,220,631    127,163,902    (301,671)   330,082,862 

 

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   Quarter Ended 
   March 31, 2024   March 31, 2024   March 31, 2024   March 31, 2024   March 31, 2024 
   RMB   RMB   RMB   RMB   US$ 
   Hotel   Restaurant   Elimination   Total   Total 
Operating costs and expenses                    
Operating costs   146,226,642    62,149,597    (255,888)   208,120,351    28,824,336 
Selling and marketing expenses   15,454,623    2,954,313    (19,334)   18,389,602    2,546,931 
General and administrative expenses   38,469,631    9,171,998    -    47,641,629    6,598,289 
Other operating expenses   666,301    1,541,981    -    2,208,282    305,844 
Impairment loss of goodwill   -    -    -    -    - 
Other general expenses   5,844,575    -    -    5,844,575    809,464 
Total operating costs and expenses   206,661,772    75,817,889    (275,222)   282,204,439    39,084,864 

 

Operating costs were RMB208.1 million (US$28.8 million)[1], a 14.4% year-over-year decrease.

 

Operating costs of the hotel business were RMB146.2 million (US$20.3 million)[1], a 8.9% year-over-year increase. The increase was mainly attributable to higher utilities costs due to the improvement in L&O hotels’ RevPAR, and higher rental and personnel costs due to the increase in the number of L&O hotels and F&M hotels.

 

Operating costs of the restaurant business were RMB62.1million (US$8.6 million)[1], a 43.1% year-over-year decrease, due to closure of L&O stores.

 

Selling and marketing expenses were RMB18.4 million (US$2.5 million)[1], a 14.8% year-over-year increase.

 

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Selling and marketing expenses of the hotel business were RMB15.5 million (US$2.1 million)[1], increased from RMB11.1 million one year ago. The increase was mainly attributable to the increase in business development and sales staff numbers.

 

Selling and marketing expenses of the restaurant business were RMB3.0 million (US$0.4 million)[1], a 40.2% year-over-year decrease, mainly attributable to lower sales staff related expenses after the closure of L&O stores.

 

General and administrative, or G&A expenses were RMB47.6 million (US$ 6.6 million)[1], a 17.5% year-over-year decrease.

 

G&A expenses of the hotel business were RMB38.5 million (US$5.3 million)[1], a 16.5% year-over-year decrease. The decrease was mainly due to the reversal of bad debt resulting from the decrease in long-aged accounts receivable.

 

G&A expenses of the restaurant business were RMB9.2 million (US$1.3 million)[1], a 21.4% year-over-year decrease, mainly due to lower staff related expenses and lower bad debts.

 

Other general expenses were RMB5.8 million (US$0.8 million)[1], a 49.9% year-over-year decrease. These expenses include provisions for loan receivables related to franchisee loans. The year-over-year decrease was attributable to the decrease in the loan balance thanks to the repayment of overdue debts.

 

Gross profit was RMB144.1 million (US$20.0 million)[1], a year-over-year increase of 5.9%. Gross margin was 40.9%, compared to 35.9% a year ago. The gross profit of the hotel business was RMB128.6 million (US$17.8 million)[1], an 8.7% year-over-year increase. The gross profit of the restaurant business was RMB15.5 million (US$2.1 million)[1], a 13.7% year-over-year decrease.

 

Income from operations was RMB72.2 million (US$10 million)[1] , compared to income from operations of RMB52.3 million in the first quarter of 2023, with a margin of 20.5%.

 

Income from operations of the hotel business was RMB70.4 million (US$9.7 million)[1], compared to an income from operations of RMB52 million in the first quarter of 2023, with a margin of 25.6%.

 

Income from operations of the restaurant business was RMB1.9 million (US$0.3 million)[1], compared to income from operations of RMB0.6 million in the first quarter of 2023, with a margin of 2.4%.

 

Net income was RMB57.3 million (US$7.9 million)[1], compared to a net income of RMB32.6 million in the first quarter of 2023, and net margin was 16.3%.

 

Net income of the hotel business was RMB57.3 million (US$7.9 million)[1], compared to a net income of RMB35.0 million in the first quarter of 2023, and net margin was 20.8%.

 

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Net loss of the restaurant business was nil, compared to a net loss of RMB2.2 million in the first quarter of 2023.

 

Adjusted EBITDA (non-GAAP)[2] was RMB109.4 million (US$15.2 million)[1], a year-over-year increase of 17.2%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, was 31.1%, compared to 24.6% a year ago.

 

Core net income (non-GAAP) [3] was RMB60.7 million (US$8.4 million)[1], a year-over-year increase of 21.5%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, was 17.2%, compared to 13.2% one year ago.

 

Earnings per American Depositary Share, or ADS, (basic and diluted) were RMB0.58 (US$0.08 )[1], up from RMB0.36 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB0.6 (US$0.08 )[1], up from RMB0.49 a year ago.

 

Cash flow Operating cash inflow was RMB90.7 million (US$12.6 million)[1] as a result of income from operations. Investing cash inflow for the first quarter of 2024 was RMB213.1 million (US$29.5 million)[1], which was primarily attributable to proceeds from maturities of short-term investments and offset by the increase of long-term time investments. Financing cash inflow was RMB83.2 million (US$11.5 million)[1], mainly attributable to the drawing down of bank facilities and offset by the repayment of bank borrowings.

 

Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposits. As of March 31, 2024, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,517.3 million (US$210.1 million)[1],compared to RMB1,337.1 million as of December 31, 2023.The increase was mainly due to continued improvement in our operating performance, drawing down of bank facilities, and repayment from franchisees.

 

Guidance

 

Based on our performance in the first five months of this year, we maintain our previous revenue guidance for the hotel business, that we expect to grow 7% to 12% year-over-year. We are withdrawing our guidance for the restaurant business given the significant revenue unpredictability resulting from its strategic repositioning.

 

The guidance set forth above reflects the Company's current and preliminary views based on its recovery and may not be indicative of the final financial results for any future periods or the full year.

 

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Conference Call

 

GreenTree's management will hold an earnings conference call at 8:00 AM U.S. Eastern Time on June 25, 2024, (8:00 PM Beijing/Hong Kong Time on June 25, 2023).

 

Dial-in numbers for the live conference call are as follows:

 

International  1-412-902-4272 
Mainland China 4001-201-203 
US  1-888-346-8982 
Hong Kong  800-905-945 or 852-3018-4992 
Singapore 800-120-6157 

 

Participants should ask to join the GreenTree call, please dial in approximately 10 minutes before the scheduled time of the call.

 

A telephone replay of the conference call will be available after the conclusion of the live conference call until July 2, 2024.

 

Dial-in numbers for the replay are as follows:

 

International Dial-in  1-412-317-0088
U.S. Toll Free  1-877-344-7529
Canada Toll Free 855-669-9658
Passcode: 2914023              

 

Additionally, a live and archived webcast of this conference call will be available at http://ir.998.com.

 

Use of Non-GAAP Financial Measures

 

We believe that Adjusted EBITDA and core net income, as we present them, are useful financial metrics to assess our operating and financial performance before the impact of investing and financing transactions, income taxes and certain non-core and non-recurring items in our financial statements.

 

The presentation of Adjusted EBITDA and core net income should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.

 

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The use of Adjusted EBITDA and core net income has certain limitations because it does not reflect all items of income and expenses that affect our operations. Items excluded from Adjusted EBITDA and core net income are significant components in understanding and assessing our operating and financial performance. Depreciation and amortization expense for various long-term assets, income tax and share-based compensation have been and will be incurred and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA and core net income do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest expense/income, gains/losses from investments in equity securities, income tax expenses, share-based compensation, share of loss in equity investes, government subsidies and other relevant items both in our reconciliations to the corresponding U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

 

The terms Adjusted EBITDA and core net income are not defined under U.S. GAAP, and Adjusted EBITDA and core net income are not measures of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider this data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, our Adjusted EBITDA and core net income may not be comparable to Adjusted EBITDA and core net income or similarly titled measures utilized by other companies since such other companies may not calculate Adjusted EBITDA and core net income in the same manner as we do.

 

Reconciliations of the Company's non-GAAP financial measures, including Adjusted EBITDA and core net income, to the consolidated statement of operations information are included at the end of this press release.

 

About GreenTree Hospitality Group Ltd.

 

GreenTree Hospitality Group Ltd. ("GreenTree" or the "Company") (NYSE: GHG) is a leading hospitality and restaurant management group in China. As of March 31, 2023, GreenTree had a total number of 4,256 hotels and 185 restaurants. In 2023, HOTELS magazine ranked GreenTree 12th among the 225 largest global hotel groups in terms of number of hotels in its annual HOTELS' 225. GreenTree was the fourth largest hospitality company in China in 2022 according to the China Hospitality Association. In 2023, GreenTree completed its acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China.

 

GreenTree has a broad portfolio of diverse brands spanning from the economy to mid-scale, up-scale and luxury segments of the hospitality industry mainly in China. Through its strong membership base, expansive booking network, superior system management with moderate charges, and fully supported by its operating departments including Decoration, Engineering, Purchasing, Operation, IT and Finance, GreenTree aims to keep closer relationships with all of its clients and partners by providing a diverse brand portfolio that features comfort, style and value.

 

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For more information on GreenTree, please visit http://ir.998.com

 

Safe Harbor Statements

 

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," "confident," "future," or other similar expressions. GreenTree may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about or based on GreenTree's current beliefs, expectations, assumptions, estimates and projections about us and our industry, are forward-looking statements that involve known and unknown factors, risks and uncertainties that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such factors and risks include, but not limited to the following: GreenTree's goals and growth strategies; its future business development, financial condition and results of operations; trends in the hospitality industry in China and globally; competition in our industry; fluctuations in general economic and business conditions in China and other regions where we operate; the regulatory environment in which we and our franchisees operate; and assumptions underlying or related to any of the foregoing. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made, in this press release are current as of the date of the press release. Except as required by law, GreenTree undertakes no obligation to update any such information or forward-looking statements to reflect events or circumstances after the date on which the information is provided or statements are made, or to reflect the occurrence of unanticipated events.

 

Financial Tables and Operational Data Follow

 

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GreenTree Hospitality Group Ltd.
 
Unaudited Condensed Consolidated Balance Sheets
 
   March 31   March 31   March 31 
   2023   2024   2024 
   RMB   RMB   US$ 
ASSETS               
Current assets:               
Cash and cash equivalents   953,822,859    1,152,175,405    159,574,451 
Restricted cash   2,720,982    4,532,526    627,748 
Short-term investments   225,021,572    31,572    4,373 
Investments in equity securities   32,272,989    22,146,357    3,067,235 
Accounts receivable, net of allowance   142,262,308    122,414,456    16,954,206 
Amounts due from related parties   47,062,819    20,692,709    2,865,907 
Prepaid rent   -    -    - 
Inventories   29,534,072    8,400,721    1,163,486 
Other current assets   139,201,294    126,002,104    17,451,090 
Loans receivable, net   158,565,259    103,678,058    14,359,245 
Total current assets   1,730,464,154    1,560,073,908    216,067,741 
                
Non-current assets:               
Amounts due from a related party   112,360,000    110,000,000    15,234,824 
Restricted cash   26,367,272    19,315,343    2,675,144 
Long-term time deposits   -    285,570,000    39,550,988 
Loans receivable, net   149,792,749    65,855,806    9,120,924 
Property and equipment, net   888,599,359    784,053,346    108,590,134 
Intangible assets, net   173,172,989    116,036,169    16,070,824 
Goodwill   128,752,950    177,082,468    24,525,639 
Long-term investments   180,824,192    180,600,002    25,012,811 
Operating lease right-of-use assets   1,611,536,252    1,555,590,403    215,446,782 
Other assets   115,656,298    107,382,513    14,872,306 
Deferred tax assets   243,093,543    244,795,647    33,903,806 
TOTAL ASSETS   5,360,619,758    5,206,355,605    721,071,923 
                
LIABILITIES AND EQUITY               
Current liabilities:               
Long-term bank loans, current portion   -    200,000    27,700 
Short-term bank loans   278,500,000    200,000    27,700 
Accounts payable   128,212,354    64,268,468    8,901,080 
Advance from customers   30,083,605    18,436,298    2,553,398 
Amounts due to related parties   23,177,949    14,800,188    2,049,802 
Salary and welfare payable   93,837,623    82,025,103    11,360,346 
Deferred rent   -    -    - 
Deferred revenue   197,096,092    192,051,020    26,598,759 
Accrued expenses and other current liabilities   555,241,803    423,194,165    58,611,715 
Income tax payable   71,251,884    121,029,924    16,762,451 
Dividends payable   -    -    - 
Operating lease liabilities, current   266,944,100    283,904,384    39,320,303 
Deferred tax liabilities   34,408,879    -    - 
Total current liabilities   1,678,754,289    1,200,109,550    166,213,254 
                
Long-term bank loans   160,000,000    256,600,000    35,538,690 
Deferred rent   -    -    - 
Deferred revenue   230,935,621    195,259,974    27,043,194 
Other long-term liabilities   121,625,146    118,615,555    16,428,065 
Operating lease liabilities, non-current   1,463,742,002    1,418,705,518    196,488,445 
Deferred tax liabilities   36,591,348    97,657,120    13,525,355 
Unrecognized tax benefits   365,027,137    389,681,763    53,970,301 
TOTAL LIABILITIES   4,056,675,543    3,676,629,480    509,207,304 
                
Shareholders’ equity:               
Class A ordinary shares   222,587,070    222,587,070    30,827,953 
Class B ordinary shares   115,534,210    115,534,210    16,001,303 
Paid-in capital   94,000,801    -    - 
Treasury Stock   (16,971,057)   (36,677,832)   (5,079,821)
Additional paid-in capital   1,491,516,416    1,680,729,011    232,778,279 
Retained earnings (Accumulated losses)   (665,211,634)   (509,443,169)   (70,557,064)
Accumulated other comprehensive income   28,542,678    20,783,387    2,878,466 
Total GreenTree Hospitality Group Ltd. shareholders’ equity   1,269,998,484    1,493,512,677    206,849,116 
                
Non-controlling interests   33,945,729    36,213,449    5,015,505 
Total shareholders’ equity   1,303,944,213    1,529,726,126    211,864,621 
                
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   5,360,619,758    5,206,355,605    721,071,923 

 

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GreenTree Hospitality Group Ltd.

 

Unaudited Condensed Consolidated Statements of Comprehensive Income

 

   Quarter Ended 
    March 31, 2023    March 31, 2024    March 31, 2024 
    RMB    RMB    US$ 
Revenues               
Leased-and-operated revenues   170,890,916    168,909,772    23,393,733 
Franchised-and-managed revenues   170,444,376    152,694,853    21,147,993 
Wholesales and others   37,885,127    30,622,804    4,241,209 
Total revenues   379,220,419    352,227,429    48,782,935 
                
Operating costs and expenses               
Operating costs   (243,155,310)   (208,120,351)   (28,824,336)
Selling and marketing expenses   (16,015,579)   (18,389,602)   (2,546,931)
General and administrative expenses   (57,755,145)   (47,641,629)   (6,598,289)
Other operating expenses   (1,492,483)   (2,208,282)   (305,844)
Impairment loss of goodwill               
Other general expenses   (11,664,345)   (5,844,575)   (809,464)
Total operating costs and expenses   (330,082,862)   (282,204,439)   (39,084,864)
                
Other operating income   3,159,519    2,225,933    308,288 
Income from operations   52,297,076    72,248,923    10,006,359 
                
Interest income and other, net   7,629,014    8,946,539    1,239,081 
Interest expense   (5,528,061)   (1,739,829)   (240,964)
Gains (losses) from investment in equity securities   (4,536,562)   (9,252,584)   (1,281,468)
Other income, net   (2,149,582)   13,234,570    1,832,967 
Income before income taxes   47,711,885    83,437,619    11,555,975 
                
Income tax expense   (14,708,875)   (26,447,961)   (3,663,000)
Income (loss) before share of gains in equity investees   33,003,010    56,989,658    7,892,975 
                
Share of loss/(income) in equity investees, net of tax   (445,618)   305,209    42,271 
Net income(loss)   32,557,392    57,294,867    7,935,246 
                
Net loss/(income) attributable to non-controlling interests   3,768,594    1,601,766    221,842 
Net income attributable to ordinary shareholders   36,325,986    58,896,633    8,157,088 
                
Net earnings per share               
Class A ordinary share-basic and diluted   0.36    0.58    0.08 
Class B ordinary share-basic and diluted   0.36    0.58    0.08 
                
Net earnings per ADS               
Class A ordinary share-basic and diluted   0.36    0.58    0.08 
Class B ordinary share-basic and diluted   0.36    0.58    0.08 
                
Weighted average shares outstanding               
Class A ordinary share-basic and diluted   0.36    0.58    0.08 
Class B ordinary share-basic and diluted   0.36    0.58    0.08 
                
Other comprehensive income, net of tax               
Foreign currency translation adjustments   810,574    (7,617,895)   (1,055,066)
Unrealized gains(loss) on available-for-sale investments, net of tax   -    -    - 
                
Comprehensive income, net of tax   33,367,966    49,676,972    6,880,180 
                
Comprehensive loss/(income) attributable to non-controlling interests   3,768,594    1,601,766    221,842 
Comprehensive income (loss) attributable to ordinary shareholders   37,136,560    51,278,738    7,102,022 

 

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GreenTree Hospitality Group Ltd.
 
Unaudited Hotel Business Results

 

   Quarter Ended 
   March 31, 2023   March 31, 2024   March 31, 2024 
   RMB   RMB   US$ 
Revenues               
Leased-and-operated revenues   82,073,240    122,541,793    16,971,842 
Franchised-and-managed revenues   169,480,457    151,159,511    20,935,350 
Others   1,036,848    1,144,727    158,543 
Total revenues   252,590,545    274,846,031    38,065,735 
                
Operating costs and expenses               
Hotel operating costs   (134,236,998)   (146,226,642)   (20,252,156)
Selling and marketing expenses   (11,075,999)   (15,454,623)   (2,140,441)
General and administrative expenses   (46,092,069)   (38,469,631)   (5,327,982)
Other operating expenses   (151,220)   (666,301)   (92,282)
Other general expenses   (11,664,345)   (5,844,575)   (809,464)
Total operating costs and expenses   (203,220,631)   (206,661,772)   (28,622,325)
                
Other operating income   2,608,096    2,182,615    302,289 
Income from operations   51,978,010    70,366,874    9,745,699 
                
Interest income and other, net   7,475,298    8,930,356    1,236,840 
Interest expense   (4,724,690)   (1,740,682)   (241,082)
Gains (losses) from investment in equity securities   (4,536,562)   (9,310,256)   (1,289,456)
Other income, net   (2,426,540)   13,304,900    1,842,707 
Income before income taxes   47,765,516    81,551,192    11,294,708 
                
Income tax expense   (12,365,854)   (24,556,921)   (3,401,094)
Income (loss) before share of gains in equity investees   35,399,662    56,994,271    7,893,614 
                
Share of loss/(income) in equity investees, net of tax   (445,618)   305,209    42,271 
Net income(loss)   34,954,044    57,299,480    7,935,885 

 

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GreenTree Hospitality Group Ltd.
 
Unaudited Restaurant Business Results

 

   Quarter Ended 
   March 31, 2023   March 31, 2024   March 31, 2024 
   RMB   RMB   US$ 
Revenues               
Leased-and-operated revenues   89,376,893    46,367,979    6,421,891 
Franchised-and-managed revenues   963,919    1,535,341    212,642 
Wholesales and others   36,848,279    29,753,299    4,120,784 
Total revenues   127,189,091    77,656,619    10,755,317 
                
Operating costs and expenses               
Restaurant operating costs   (109,219,983)   (62,149,597)   (8,607,620)
Selling and marketing expenses   (4,939,580)   (2,954,313)   (409,168)
General and administrative expenses   (11,663,076)   (9,171,998)   (1,270,307)
Other operating expenses   (1,341,263)   (1,541,981)   (213,562)
Total operating costs and expenses   (127,163,902)   (75,817,889)   (10,500,657)
                
Other operating income   551,423    43,318    5,999 
Income from operations   576,612    1,882,048    260,659 
                
Interest income and other, net   153,716    16,183    2,241 
Interest expense   (803,371)   853    118 
Gains (losses) from investment in equity securities   -    57,672    7,987 
Other income, net   276,958    (70,330)   (9,741)
Income before income taxes   203,915    1,886,426    261,264 
                
Income tax expense   (2,407,407)   (1,891,040)   (261,906)
Income (loss) before share of gains in equity investees   (2,203,492)   (4,614)   (642)
                
Share of loss/(income) in equity investees, net of tax   -    -    - 
Net income(loss)   (2,203,492)   (4,614)   (642)

 

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GreenTree Hospitality Group Ltd.

 

Unaudited Condensed Consolidated Statements

 

   Quarter Ended   Quarter Ended   Quarter Ended   Quarter Ended 
   March 31, 2023   March 31, 2023   March 31, 2023   March 31, 2023 
    Hotel    Restaurant    Elimination    Total 
    RMB    RMB    RMB    RMB 
Revenues                    
Leased-and-operated revenues   82,073,240    89,376,893    (559,217)   170,890,916 
Franchised-and-managed revenues   169,480,457    963,919    -    170,444,376 
Wholesales and Others   1,036,848    36,848,279    -    37,885,127 
Total revenues   252,590,545    127,189,091    (559,217)   379,220,419 
                     
Operating costs and expenses                    
Operating costs   (134,236,998)   (109,219,983)   301,671    (243,155,310)
Selling and marketing expenses   (11,075,999)   (4,939,580)   -    (16,015,579)
General and administrative expenses   (46,092,069)   (11,663,076)   -    (57,755,145)
Other operating expenses   (151,220)   (1,341,263)   -    (1,492,483)
Other general expenses   (11,664,345)   -    -    (11,664,345)
Total operating costs and expenses   (203,220,631)   (127,163,902)   301,671    (330,082,862)
                     
Other operating income   2,608,096    551,423    -    3,159,519 
Income from operations   51,978,010    576,612    (257,546)   52,297,076 

 

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GreenTree Hospitality Group Ltd.

 

Unaudited Condensed Consolidated Statements

 

   Quarter Ended   Quarter Ended   Quarter Ended   Quarter Ended 
   March 31, 2024   March 31, 2024   March 31, 2024   March 31, 2024 
    Hotel    Restaurant    Elimination    Total 
    RMB    RMB    RMB    RMB 
Revenues                    
Leased-and-operated revenues   122,541,793    46,367,979    -    168,909,772 
Franchised-and-managed revenues   151,159,511    1,535,341    -    152,694,853 
Wholesales and Others   1,144,727    29,753,299    (275,222)   30,622,804 
Total revenues   274,846,031    77,656,619    (275,222)   352,227,429 
                     
Operating costs and expenses                    
Operating costs   (146,226,642)   (62,149,597)   255,888    (208,120,351)
Selling and marketing expenses   (15,454,623)   (2,954,313)   19,334    (18,389,602)
General and administrative expenses   (38,469,631)   (9,171,998)   -    (47,641,629)
Other operating expenses   (666,301)   (1,541,981)   -    (2,208,282)
Other general expenses   (5,844,575)   -    -    (5,844,575)
Total operating costs and expenses   (206,661,772)   (75,817,889)   275,222    (282,204,439)
                     
Other operating income   2,182,615    43,318    -    2,225,933 
Income from operations   70,366,874    1,882,048    -    72,248,923 

 

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GreenTree Hospitality Group Ltd.

 

Unaudited Condensed Consolidated Statements of Cash Flows

 

   Quarter Ended 
   March 31, 2023   March 31, 2024   March 31, 2024 
   RMB   RMB   US$ 
Operating activities:               
Net (loss) income   32,557,392    57,294,867    7,935,247 
                
Adjustments to reconcile net income to net cash provided by operating activities:               
Depreciation and amortization   31,337,638    31,341,704    4,340,776 
Impairment of long-lived assets   2,900,000    -    - 
Share of (income) loss in equity method investments   445,618    (305,209)   (42,271)
Noncash lease expense   64,053,832    64,818,043    8,977,195 
Loss from disposal of a subsidiary   1,223,952    -    - 
Interest income   (390,378)   -    - 
Bad debt expenses   12,359,278    5,473,571    758,081 
(Gains) losses and impairment on equity securities held   4,536,562    9,252,584    1,281,468 
Loss (gains) on disposal of property, plant and equipment   (113,587)   2,352,048    325,755 
Foreign exchange (gains) losses   987,543    (8,088,429)   (1,120,234)
Share-based compensation   (11,636)   15,662    2,169 
Accounts receivable   (7,050,882)   1,844,427    255,450 
Inventories   969,640    12,061,769    1,670,536 
Amounts due from related parties   (961,185)   (397,603)   (55,067)
Other current assets   (7,726,682)   (5,490,017)   (760,359)
Other assets   4,964,235    (2,656,913)   (367,978)
Accounts payable   4,690,325    (8,858,209)   (1,226,848)
Amounts due to related parties   (1,632,355)   (1,876,431)   (259,883)
Salary and welfare payable   4,494,565    (4,306,993)   (596,512)
Deferred revenue   (4,481,873)   (6,876,613)   (952,400)
Advance from customers   3,602,826    (3,956,799)   (548,010)
Accrued expenses and other current liabilities   76,271,975    (23,815,642)   (3,298,428)
Income tax payable   18,311,461    8,247,211    1,142,226 
Unrecognized tax benefits   15,024,896    7,555,977    1,046,491 
Operating lease liabilities   (56,063,542)   (41,913,938)   (5,805,013)
Other long-term liabilities   (6,570,885)   (1,096,187)   (151,820)
Deferred taxes   (28,194,988)   110,338    15,282 
Net cash provided by operating activities   165,533,745    90,729,218    12,565,853 
                
Investing activities:               
Purchases of property, plant and equipment   (34,116,117)   (10,554,525)   (1,461,785)
Purchases of intangible assets   (42,454)   -    - 
Proceeds from disposal of property, plant and equipment   6,973,574    1,733,100    240,032 
Proceeds from maturities of short-term investments   91,400,378    419,362,037    58,080,971 
Purchases of long-term investments   -    (222,230,000)   (30,778,500)
Proceeds from disposal of a subsidiary   18,900,000    -    - 
Loan to third parties   (1,000,000)   -    - 
Repayment of loan from third parties   468,319    1,371,953    190,013 
Loan to franchisees   (7,029,596)   -    - 
Repayment from franchisees   26,834,584    23,461,007    3,249,312 
Net cash (used in) provided by investing activities   102,388,688    213,143,572    29,520,043 
                
Financing activities:               
Repayment of bank loans   (136,600,000)   (116,800,000)   (16,176,613)
Proceeds from bank loans   117,000,000    200,000,000    27,699,680 
Capital contribution from non-controlling interest holders   -    -    - 
Net cash provided by (used in) financing activities   (19,600,000)   83,200,000    11,523,067 
                
Effect of exchange rate changes on cash and cash equivalents and restricted cash   (40,524)   (2,650,223)   (367,052)
                
Net (decrease) increase in cash and cash equivalents   248,281,909    384,422,562    53,241,910 
Cash and cash equivalents at the beginning of the period   734,629,202    791,600,712    109,635,432 
Cash and cash equivalents at the end of the period   982,911,111    1,176,023,274    162,877,342 

 

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GreenTree Hospitality Group Ltd.
 
Unaudited Reconciliation of GAAP and Non-GAAP Results
 
   Quarter Ended 
   March 31, 2023   March 31, 2024   March 31, 2024 
   RMB   RMB   US$ 
Net income   32,557,393    57,294,867    7,935,247 
                
Deduct:               
Other operating income   3,159,519    2,225,933    308,288 
Interest income and other, net   7,629,014    8,946,539    1,239,081 
Share of gain in equity investees, net of tax   -    305,209    42,271 
Other income, net   -    13,234,570    1,832,967 
                
Add:               
Other operating expenses   1,492,483    2,208,282    305,844 
Other general expenses   11,664,345    5,844,575    809,464 
Income tax expenses (benefits)   14,708,875    26,447,961    3,663,000 
Share of loss in equity investees, net of tax   445,618    -    - 
Interest expenses   5,528,061    1,739,829    240,964 
Depreciation and amortization   31,080,092    31,341,704    4,340,776 
Losses from investment in equity securities   4,536,562    9,252,584    1,281,468 
Other expense, net   2,149,582    -    - 
Adjusted EBITDA (Non-GAAP)   93,374,478    109,417,551    15,154,156 

 

   Quarter Ended 
   March 31, 2023   March 31, 2024   March 31, 2024 
   RMB   RMB   US$ 
Net income   32,557,393    57,294,867    7,935,247 
                
Deduct:               
Government subsidies (net of 25% tax)   396,060    259,886    35,994 
Gains from investment in equity securities (net of 25% tax)   -    -    - 
Other income (net of 25% tax)   -    9,925,928    1,374,725 
                
Add:               
Share-based compensation   (11,636)   15,662    2,169 
Losses from investments in equity securities (net of 25% tax)   3,402,422    6,939,438    961,101 
Other expense (net of 25% tax)   1,612,187    -    - 
One-time fees and expenses   1,147,778    815,188    112,902 
Other general expenses   11,664,345    5,844,575    809,464 
Core net income (Non-GAAP)   49,976,429    60,723,916    8,410,164 
                
Core net income per ADS (Non-GAAP)               
Class A ordinary share-basic and diluted   0.49    0.60    0.08 
Class B ordinary share-basic and diluted   0.49    0.60    0.08 

 

18 / 21

 

 

Hotel Operational Data

 

   March 31, 2023   March 31, 2024 
Total hotels in operation:   4,084    4,256 
Leased and owned hotels   64    66 
Franchised hotels   4,020    4,190 
Total hotel rooms in operation   302,425    313,531 
Leased and owned hotels   6,992    7,392 
Franchised hotels   295,433    306,139 
Number of cities   355    345 

 

   Quarter Ended 
   2023 Q1   2024 Q1 
Occupancy rate (as a percentage)          
Leased-and-owned hotels   62.9%   66.6%
Franchised hotels   71.9%   67.9%
Blended   71.7%   67.8%
Average daily rate (in RMB)          
Leased-and-owned hotels   229    235 
Franchised hotels   166    167 
Blended   167    169 
RevPAR (in RMB)          
Leased-and-owned hotels   144    157 
Franchised hotels   119    113 
Blended   120    114 

 

   Number of Hotels in Operation   Number of Hotel Rooms in Operation 
   March 31, 2023   March 31, 2024   March 31, 2023   March 31, 2024 
Mid-to-up-scale   425    498    41,124    47,264 
GreenTree Eastern   202    233    22,212    25,191 
Deepsleep Hotel   7    7    534    534 
Gem   54    75    4,845    6,588 
Gya   69    74    5,809    6,121 
Vx   86    95    7,492    8,263 
Urban Garden and others   7    14    232    567 
Mid-scale   2,952    2,942    230,729    230,362 
GreenTree Inn   2,225    2,260    182,242    182,570 
GT Alliance   544    493    38,084    37,290 
GreenTree Dianjing   55    58    1,305    1,296 
GreenTree Apartment   20    21    1,289    1,382 
Vatica   108    110    7,809    7,824 
City 118 Selected and others   -    -    -    - 
Economy hotels   707    816    30,572    35,905 
Shell   707    816    30,572    35,905 
City 118 and others   -    -    -    - 
Total   4,084    4,256    302,425    313,531 

 

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Restaurant Operational Data

 

   March 31, 2023   March 31, 2024 
Total restaurants in operation:   255    185 
Leased and owned restaurants   116    27 
Franchised restaurants   139    158 
Number of cities   64    53 
Da Niang Dumplings   219    153 
Bellagio   36    32 

 

   Quarter Ended 
   2023 Q1   2024 Q1 
ADT          
Leased-and-owned restaurants   61    44 
Franchised restaurants   48    50 
Blended   109    94 
AC (in RMB)          
Leased-and-owned restaurants   67    80 
Franchised restaurants   40    40 
Blended   55    59 
ADS (in RMB)          
Leased-and-owned restaurants   4,135    3,484 
Franchised restaurants   1,915    2,041 
Blended   6,050    5,525 

 

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For more information, please contact:

 

GreenTree

 

Ms. Selina Yang

Phone: +86-158-2166-6251

E-mail: ir@998.com

 

Mr. Maple Miao

Phone: +86-181-0184-0639

E-mail: ir@998.com

 

Christensen

 

In Shanghai

 

Mr. Jerry Xu

Phone: +86-138-1680-0706

E-mail: jerry.xu@christensencomms.com

 

In Hong Kong

 

Ms. Karen Hui

Phone: +852-9266-4140

E-mail: karen.hui@christensencomms.com

 

In the US

 

Ms. Linda Bergkamp

Phone: +1-480-614-3004

E-mail: linda.bergkamp@christensencomms.com

 

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