Cision PR Newswire

GreenTree Hospitality Group Ltd. Reports First Half 2023 Financial Results

  • Total revenues increased by 12.1% year over year to RMB794.2 million (US$109.5 million)[1].
  • Income from operations was RMB150.9 million (US$20.8 million)[1], compared to RMB-474.3 million for the first half of 2022.
  • Net income was RMB177.3 million (US$24.5 million)[1], compared to RMB-384.5 million for the first half of 2022.
  • Adjusted EBITDA (non-GAAP)[2] increased by 137.8% year over year to RMB226.9 million (US$31.3 million)[1].
  • Core net income (non-GAAP)[3] increased by 65.2% year over year to RMB136.1 million (US$18.8 million)[1].

SHANGHAI, Sept. 18, 2023 /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 half of 2023. As Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China, were all under the control of our founder, Alex S. Xu, until their acquisition by the Company, the Company accounted for the common-control acquisitions by using the pooling of interest method. The consolidated balance sheets and consolidated statements of comprehensive income/(loss) include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under common control. In this report, the comparative financial data have been restated to reflect the business combinations under common control.

First Half 2023 Operational Highlights

Hotels 

  • A total of 4,108 hotels with 303,387 hotel rooms were in operation as of June 30, 2023.
  • The Company opened 183 hotels during the six months ended June 30, 2023, and had a pipeline of 969 hotels contracted for or under development as of June 30, 2023.
  • The average daily room rate was RMB167 in the first quarter of 2023, an increase of 9.1% from RMB153 in the first quarter of 2022, and RMB181 in the second quarter of 2023, a 23.1% year-over-year increase.
  • The occupancy rate was 71.7% in the first quarter of 2023, up from 60.0% in the first quarter of 2022, and 77.8% in the second quarter of 2023, compared to 62.2% in the second quarter of 2022.
  • Revenue per available room, or¬†RevPAR,¬†was RMB120 in the first quarter of 2023, a 30.4% year-over-year increase,¬†and RMB141 in the second quarter of 2023, a 54.0% year-over-year increase.¬†

Restaurants

  • A total of 218 restaurants were in operation as of June 30, 2023.
  • The AC (average check) was RMB55 in the first quarter of 2023, a 19.2% year-over-year increase, and RMB53 in the second quarter of 2023, a 2.2% year-over-year increase.
  • The¬†ADT (average daily tickets) was 110 in the first quarter of 2023, down from 130 in the first quarter of 2022, and 120 in the second quarter of 2023, compared to 78 in the second quarter of 2022.
  • The ADS (average daily sales per store) was¬†RMB 6,080 in the first quarter of 2023, an increase of 0.9% from RMB 6,027 in the first quarter of 2022, and RMB 6,371 in the second quarter of 2023, a 57.3% year-over-year increase.

"For our hotel business, the first quarter of 2023 marked a new beginning thanks to the recovery in the hospitality industry and the entire economy in China. RevPAR recovered to 94.3% of its first quarter of 2019 level. RevPAR during the national Labor Day holiday in early May reached more than 120% of its level in the same period in 2019, capitalizing on the popularity of travel during the national holiday period. And due to an increase in the number of people traveling during the summer vacation, RevPAR in July and August was nearly stable at 110% of its level in the same period in 2019.

As previously disclosed, the Company completed the acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China from our controlling shareholder. Our strategy and execution in our restaurant business focus on further expansion in the proportion of franchised-and-managed restaurants and greater penetration to street stores. To ensure the profitability of our restaurant business, we closed unprofitable stores. In the first half of 2023, the ADS of restaurant business recovered to 122.9% of its first half of 2022 level.

"We are grateful for the hard work of our team, franchisees, and partners, and the support of our customers that made it possible to recover quickly starting from the first quarter of 2023 as China began returning to normal life," said Mr. Alex S. Xu, Chairman and Chief Executive Officer of GreenTree.

First Half 2023 Financial Results


Six months Ended


 June 30,
2022

 June 30,
2022

 June 30,
2022

 June 30,
2022


RMB

RMB

RMB

RMB


Hotel

Restaurant

Elimination

Total

Revenues





Leased-and-operated revenues

171,272,365

171,008,920

(229,756)

342,051,529

Franchised-and-managed revenues

275,539,547

18,229,310


293,768,857

Wholesales and others

10,564,787

62,284,229


72,849,016

Total revenues

457,376,699

251,522,459

(229,756)

708,669,402

 


Six months Ended


 June 30,
2023

 June 30,
2023

 June 30,
2023

 June 30,
2023

 June 30,
2023


RMB

RMB

RMB

RMB

US$


Hotel

Restaurant

Elimination

Total

Total

Revenues






Leased-and-operated
revenues

213,563,927

168,340,074

(1,125,179)

380,778,822

52,511,801

Franchised-and-managed
revenues

347,417,000

17,355,892


364,772,892

50,304,482

Wholesales and others

2,225,580

46,432,697


48,658,277

6,710,283

Total revenues

563,206,507

232,128,663

(1,125,179)

794,209,991

109,526,566

 

Total revenues for the first half of 2023 were RMB794.2 million (US$109.5 million)[1], a 12.1% year-over-year increase.

Hotel revenues were RMB563.2 million (US$77.7 million), a 23.1% year-over-year increase. The increase was mainly attributable to the recovery in RevPAR and the increase in the number of hotels.

Restaurant revenues were RMB232.1 million (US$32.0 million), a 7.7% year-over-year decrease. The decrease was mainly due to the closure of 64 stores, and partially offset by an increase in ADS.

Total revenues from leased-and-operated, or L&O, hotels and restaurants were RMB380.8 million (US$52.5 million)[1], a 11.3% year-over-year increase.

Total revenues from L&O hotels for the first half of 2023 were RMB213.6 million (US$29.5 million)[1], a 24.7% year-over-year increase. The increase was primarily attributable to a 47.8% year-over-year increase in L&O hotels' first half RevPAR and more newly opened L&O hotels in the first half of 2023 as compared to the first half of 2022.

Total revenues from L&O restaurants for the first half of 2023 were RMB168.3 million (US$23.2 million)[1], a 1.6% year-over-year decrease. The decrease was mainly due to the closure of 47 L&O stores, and partially offset by an increase in ADS.

Total revenues from franchised-and-managed, or F&M, hotels and restaurants were RMB364.8 million (US$ 50.3 million)[1], a 24.2% year-over-year increase.

Total revenues from F&M hotels were RMB347.4 million (US$47.9 million)[1], a 26.1% year-over-year increase. Initial franchise fees increased 9.3% year over year, mainly because of the increase in the gross opening number of F&M hotels. Recurring franchisee management fees and others increased by 27.8% year over year, primarily due to a 46.4% increase in F&M hotels' RevPAR and the increase of 167 F&M hotels.

Total revenues from F&M restaurants were RMB17.4 million (US$2.4 million)[1], a 4.8% year-over-year decrease. The decrease was mainly due to a decrease of 17 F&M stores numbers,and partially offset by a 22.9% increase in F&M stores' average daily sales.

Total revenues from wholesale and others were RMB48.7 million (US$ 6.7 million)[1], a 33.2% year-over-year decrease, mainly because of reduced business from supermarkets, partially offset by increased business through distributors.  

Total operating costs and expenses


Six Months Ended


 June 30,
2022

 June 30,
2022

 June 30,
2022

 June 30,
2022


RMB

RMB

RMB

RMB


Hotel

Restaurant

Elimination

Total

Operating costs and expenses





Operating costs

307,750,028

234,911,742

289,605

542,951,375

Selling and marketing expenses

18,852,606

9,717,435


28,570,041

General and administrative expenses

99,724,402

21,847,196


121,571,598

Other operating expenses

2,048,734

2,240,920


4,289,654

Other general expenses

490,619,710



490,619,710

Total operating costs and
expenses

918,995,480

268,717,293

289,605

1,188,002,378

 


Six Months Ended


 June 30,
2023

 June 30,
2023

 June 30,
2023

 June 30,
2023

 June 30,
2023


RMB

RMB

RMB

RMB

US$


Hotel

Restaurant

Elimination

Total

Total

Operating costs and
expenses






Operating costs

284,364,378

204,308,159

(610,088)

488,062,449

67,306,890

Selling and marketing
expenses

24,838,605

9,385,645


34,224,250

4,719,740

General and
administrative expenses

90,535,547

21,338,810


111,874,357

15,428,179

Other operating
expenses

843,564

6,990,654


7,834,218

1,080,388

Other general expenses

15,973,584



15,973,584

2,202,858

Total operating costs
and expenses

416,555,678

242,023,268

(610,088)

657,968,858

90,738,055

 

Operating costs were RMB488.1 million (US$67.3 million)[1], a 10.1% year-over-year decrease. 

Operating costs of the hotel business were RMB284.4 million (US$39.2 million)[1], a 7.6% year-over-year decrease. The decrease was mainly due to the deconsolidation of Argyle Hotel Management Group (Australia) Pty Ltd., or Argyle, and the disposal of our interest in Urban Hotel Group, or Urban, and was partially offset by higher consumables and higher utility costs as business rebounded, as well as higher rents with lower exemption compared to last year.

Operating costs of the restaurant business were RMB204.3 million (US$28.2 million)[1], a 13.0% year-over-year decrease. The decrease was due to the closure of 64 stores.

Selling and marketing expenses were RMB34.2 million (US$4.7 million)[1], a 19.8% year-over-year increase.

Selling and marketing expenses of the hotel business were RMB24.8 million (US$3.4 million)[1], a 31.8% year-over-year increase. The increase was mainly attributable to higher sales-channel commissions, higher sales staff salaries, and higher travel expenses.

Selling and marketing expenses of the restaurant business were RMB9.4 million (US$1.3 million)[1], a 3.4% year-over-year decrease. The decrease was mainly attributable to lower advertising expenses and lower sales-channel commissions.

General and administrative, or G&A expenses were RMB111.9 million (US$15.4 million)[1], an 8.0% year-over-year decrease.

G&A expenses of the hotel business were RMB90.5 million (US$12.5 million)[1], a 9.2% year-over-year decrease. The decrease was mainly due to the deconsolidation of Argyle and the disposal of our interest in Urban,and partially offset by higher consulting fees and higher staff related expenses.

G&A expenses of the restaurant business were RMB21.3 million (US$2.9 million)[1], a 2.3 % year-over-year decrease. The decrease was mainly due to lower staff related expenses and lower rents due to the closure of 64 stores.

Other general expenses of the hotel business were RMB16.0 million (US$2.2 million)[1], a 96.7% year-over-year decrease.These expenses include the provisions for loan receivables related to franchisee loans, and impairments caused by the disposal of 4 unprofitable hotels.

Gross profit was RMB306.1 million (US$42.2 million)[1], a year-over-year increase of 84.7%. Gross margin was 38.5%, compared to 23.4% a year ago. The gross profit of the hotel business was RMB278.8 million (US$38.5 million)[1], an 86.4% year-over-year increase. The gross profit of the restaurant business was RMB27.8 million (US$3.8 million)[1], a 67.5% year-over-year increase.

Income from operations was RMB150.9 million (US$20.8 million)[1] , compared to a loss from operations of RMB474.3 million in the first half of 2022, with a margin of 19.0%.

Income from operations of the hotel business was RMB160.4 million (US$22.1 million)[1], compared to a loss from operations of RMB457.7 million in the first half of 2022, with a margin of 28.5%. 

Loss from operations of the restaurant business was RMB9.0 million (US$1.2 million)[1], compared to a loss from operations of RMB16.1 million in the first half of 2022, with a margin of -3.9%.

Net income was RMB177.3 million (US$24.5 million)[1], compared to a net loss of RMB384.5 million in the first half of 2022, and net margin was 22.3%.

Net income of the hotel business was RMB191.8 million (US$26.5 million)[1], compared to a net loss of RMB360.9 million in the first half of 2022, and net margin was 34.1%.

Net loss of the restaurant business was RMB14.1 million (US$1.9 million)[1], compared to a net loss of RMB23.2 million in the first half of 2022, and net margin was -6.1%.

Adjusted EBITDA (non-GAAP)[2] was RMB226.9 million (US$31.3 million)[1], a year-over-year increase of 137.8%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, was 28.6%, compared to 13.5% a year ago.

Core net income (non-GAAP) was RMB136.1 million (US$18.8 million)[1], a year-over-year increase of 65.2%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, for the first half of 2023 was 17.1%, compared to 11.6% one year ago.

Earnings per American Depositary Share, or ADS, (basic and diluted) were RMB1.79 (US$0.25)[1], up from RMB-3.38 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) for the first half of 2023 was RMB1.33 (US$0.18)[1], up from RMB0.80 a year ago.   

Cash flow Operating cash inflow was RMB313.1 million (US$43.2 million)[1] as a result of income from operations. Investing cash inflow for the first half of 2023 was RMB128.2 million (US$17.7 million)[1], which was primarily attributable to proceeds from short-term investments and repayment from franchisees. The investing cash inflow was partially offset by purchases of property and equipment and short-term investments. Financing cash outflow was RMB37.4 million (US$5.2 million)[1], mainly attributable to the repayment of bank loans by the end of the June 30, 2023.

Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposits. As of June 30, 2023, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,440.1 million (US$198.6 million)[1], compared to RMB1,119.4 million as of December 31, 2022. The increase was primarily due to cash from operating activities and repayment from franchisees, proceeds from disposal of subsidiaries, partially offset by repayment of bank loans and investment of property.

Guidance

Taking into account the recovery in long-term trends and short-term industry fluctuations, we expect total revenues of organic hotels for the full year of 2023 to grow 30%-35% of the 2022 levels. Total revenues for our restaurant business and our organic hotel business, for the full year of 2023 are expected to grow 15%-20% over the 2022 levels.

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.

Conference Call

GreenTree's management will hold an earnings conference call at 9:00 PM U.S. Eastern Time on September 18, 2023, (9:00 AM Beijing/Hong Kong Time on September 19, 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 September 25, 2023.

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:

8450773

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.

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 investees, 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 June 30, 2023, GreenTree had a total number of 4,108 hotels and 218 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.

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

 

 

GreenTree Hospitality Group Ltd.


Unaudited Condensed Consolidated Balance Sheets



December 31,


June 30,


June 30,

2022


2023


2023


RMB


RMB


US$

ASSETS






Current assets:






Cash and cash equivalents

701,332,213


1,115,384,452


153,818,550

Restricted cash

7,937,397


-


-

Short-term investments

186,031,572


235,416,298


32,465,392

Investments in equity securities

41,361,346


27,460,488


3,786,974

Accounts receivable, net of allowance

140,429,505


126,306,120


17,418,410

Amounts due from related parties

451,786,275


44,473,106


6,133,122

Prepaid rent

-


-


-

Inventories

30,503,712


23,052,986


3,179,152

Other current assets

142,169,713


147,472,648


20,337,408

Loans receivable, net

181,667,170


152,938,524


21,091,187

Total current assets

1,883,218,903


1,872,504,622


258,230,195







Non-current assets:






Amounts due from a related party

112,360,000


112,360,000


15,495,153

Restricted cash

25,359,592


23,544,862


3,246,985

Long-term time deposits

130,000,000


-


-

Loans receivable, net

177,172,509


98,598,159


13,597,308

Property and equipment, net

899,985,340


883,944,435


121,901,512

Intangible assets, net

174,748,932


171,687,271


23,676,757

Goodwill

128,752,950


128,752,950


17,755,844

Long-term investments

176,854,460


186,909,291


25,775,970

Operating lease right-of-use assets

1,676,544,520


1,633,368,783


225,251,856

Other assets

120,620,533


114,673,765


15,814,236

Deferred tax assets

242,186,616


260,348,940


35,903,761

 TOTAL ASSETS

5,747,804,355


5,486,693,078


756,649,577













LIABILITIES AND EQUITY






Current liabilities:






Short-term bank loans

298,100,000


270,700,000


37,331,237

Long-term bank loans, current portion

-


-


-

Accounts payable

123,522,029


113,604,869


15,666,828

Advance from customers

26,480,779


22,822,957


3,147,430

Amounts due to related parties

24,810,304


23,130,913


3,189,899

Salary and welfare payable

89,343,058


95,815,922


13,213,620

Deferred rent

-


-


-

Deferred revenue

199,656,130


201,488,954


27,786,597

Accrued expenses and other current liabilities

455,519,530


505,932,951


69,771,345

Income tax payable

74,672,133


116,954,407


16,128,750

Dividends payable

-


-


-

Operating lease liabilities, current

271,518,556


280,717,711


38,712,743

Deferred tax liabilities

34,473,265


34,344,492


4,736,322

Total current liabilities

1,598,095,784


1,665,513,176


229,684,771







Long-term bank loans

160,000,000


150,000,000


20,685,946

Deferred rent

-


-


-

Deferred revenue

232,857,456


225,165,519


31,051,745

Other long-term liabilities

128,196,031


112,114,674


15,461,320

Operating lease liabilities, non-current

1,521,589,481


1,473,955,554


203,267,766

Deferred tax liabilities

63,815,023


50,773,630


7,002,004

Unrecognized tax benefits

350,002,241


381,962,640


52,675,057

 TOTAL LIABILITIES

4,054,556,016


4,059,485,193


559,828,609







Shareholders' equity:






Class A ordinary shares

222,587,070


222,587,070


30,696,161

Class B ordinary shares

115,534,210


115,534,210


15,932,896

Paid-in capital

94,000,801


94,000,801


12,963,303

Treasury Stock

(16,971,057)


(16,971,057)


(2,340,416)

Additional paid-in capital

1,911,328,052


1,491,556,644


205,695,068

Retained earnings (Accumulated losses)

(698,677,163)


(540,865,018)


(74,588,697)

Accumulated other comprehensive income

27,732,104


28,728,211


3,961,801

Total GreenTree Hospitality Group Ltd. shareholders'
equity

1,655,534,017


1,394,570,861


192,320,116







Non-controlling interests

37,714,322


32,637,024


4,500,852

Total shareholders' equity

1,693,248,339


1,427,207,885


196,820,968







TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

5,747,804,355


5,486,693,078


756,649,577








 

 

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income


Six Months 
Ended


Three Months Ended


Six Months Ended


 June 30, 2022


March 31,
202
3


June 30,
202
3


June 30, 2023


June 30,
202
3


RMB


RMB


RMB


RMB


US$

Revenues










Leased-and-operated revenues

342,051,529


170,890,916


209,887,906


380,778,822


52,511,801

Franchised-and-managed revenues

293,768,857


178,526,853


186,246,039


364,772,892


50,304,482

Wholesales and others

72,849,016


29,802,650


18,855,627


48,658,277


6,710,283

Total revenues

708,669,402


379,220,419


414,989,572


794,209,991


109,526,566











Operating costs and
expenses










Operating costs

(542,951,375)


(243,155,310)


(244,907,139)


(488,062,449)


(67,306,890)

Selling and marketing
expenses

(28,570,041)


(16,015,579)


(18,208,671)


(34,224,250)


(4,719,740)

General and
administrative expenses

(121,571,598)


(57,755,145)


(54,119,212)


(111,874,357)


(15,428,179)

Other operating expenses

(4,289,654)


(1,492,483)


(6,341,735)


(7,834,218)


(1,080,388)

Other general expenses

(490,619,710)


(11,664,345)


(4,309,239)


(15,973,584)


(2,202,858)

Total operating costs
and expenses

(1,188,002,378)


(330,082,862)


(327,885,996)


(657,968,858)


(90,738,055)











Other operating income

5,043,707


3,159,519


11,511,398


14,670,917


2,023,212

Income from operations

(474,289,269)


52,297,076


98,614,974


150,912,050


20,811,723











Interest income and other,
net

24,042,558


7,629,014


9,750,337


17,379,351


2,396,722

Interest expense

(17,441,575)


(5,528,061)


(3,868,469)


(9,396,530)


(1,295,841)

Gains (losses) from
investment in equity
securities

21,687,584


(4,536,562)


(263,836)


(4,800,398)


(662,005)

Other income, net

14,751,769


(2,149,582)


77,119,089


74,969,507


10,338,768

Income before income
taxes

(431,248,933)


47,711,885


181,352,095


229,063,980


31,589,367











Income tax expense

46,658,590


7,022,835


(57,972,918)


(50,950,083)


(7,026,338)

Income (loss) before
share of gains in equity
investees

(384,590,343)


54,734,720


123,379,177


178,113,897


24,563,029











Share of loss/(income) in
equity investees, net of
tax

75,125


(445,618)


(341,265)


(786,883)


(108,516)

Net income(loss)

(384,515,218)


54,289,102


123,037,912


177,327,014


24,454,513











Net loss/(income)
attributable to non-
controlling interests

35,800,468


3,768,594


1,308,704


5,077,298


700,192

Net income attributable
to ordinary shareholders

(348,714,750)


58,057,696


124,346,616


182,404,312


25,154,705











Net earnings per share










Class A ordinary share-
basic and diluted

(3.38)


0.57


1.22


1.79


0.25

Class B ordinary share-
basic and diluted

(3.38)


0.57


1.22


1.79


0.25











Net earnings per ADS










Class A ordinary share-
basic and diluted

(3.38)


0.57


1.22


1.79


0.25

Class B ordinary share-
basic and diluted

(3.38)


0.57


1.22


1.79


0.25











Weighted average
shares outstanding










Class A ordinary share-
basic and diluted

68,286,954


67,416,046


67,416,046


67,416,046


67,416,046

Class B ordinary share-
basic and diluted

34,762,909


34,762,909


34,762,909


34,762,909


34,762,909











Other comprehensive
income, net of tax










Foreign currency
translation adjustments

(9,730,001)


810,574


185,533


996,107


137,370

Comprehensive income,
net of tax

(394,245,219)


55,099,676


123,223,445


178,323,121


24,591,883











Comprehensive
loss/(income) attributable
to non-controlling interests

35,800,468


3,768,594


(4,843,631)


(1,075,037)


(148,254)

Comprehensive income
(loss)
 attributable to
ordinary shareholders

(358,444,751)


58,868,270


118,379,814


177,248,084


24,443,629

 

 

GreenTree Hospitality Group Ltd.

Unaudited Hotel Business Results


Six Months
 Ended


Three Months Ended


Six Months Ended


 June 30, 2022


March 31,
202
3


June 30,
202
3


June 30, 2023


June 30,
202
3


RMB


RMB


RMB


RMB


US$

Revenues










Leased-and-operated revenues

171,272,365


82,073,240


131,490,687


213,563,927


29,451,812

Franchised-and-managed revenues

275,539,547


169,480,457


177,936,543


347,417,000


47,910,995

Others

10,564,787


1,036,848


1,188,732


2,225,580


306,921

Total revenues

457,376,699


252,590,545


310,615,962


563,206,507


77,669,728











Operating costs and
expenses










Hotel operating costs

(307,750,028)


(134,236,998)


(150,127,380)


(284,364,378)


(39,215,641)

Selling and marketing
expenses

(18,852,606)


(11,075,999)


(13,762,606)


(24,838,605)


(3,425,400)

General and
administrative expenses

(99,724,402)


(46,092,069)


(44,443,478)


(90,535,547)


(12,485,423)

Other operating expenses

(2,048,734)


(151,220)


(692,344)


(843,564)


(116,333)

Other general expenses

(490,619,710)


(11,664,345)


(4,309,239)


(15,973,584)


(2,202,858)

Total operating costs
and expenses

(918,995,480)


(203,220,631)


(213,335,047)


(416,555,678)


(57,445,655)











Other operating income

3,917,398


2,608,096


11,183,689


13,791,785


1,901,974

Income from operations

(457,701,383)


51,978,010


108,464,604


160,442,614


22,126,047











Interest income and other,
net

23,730,138


7,475,298


9,597,042


17,072,340


2,354,383

Interest expense

(15,178,612)


(4,724,690)


(3,167,262)


(7,891,952)


(1,088,350)

Gains (losses) from
investment in equity
securities

21,687,584


(4,536,562)


(263,836)


(4,800,398)


(662,005)

Other income, net

14,664,617


(2,426,540)


76,946,162


74,519,622


10,276,727

Income before income
taxes

(412,797,656)


47,765,516


191,576,710


239,342,226


33,006,802











Income tax expense 

51,800,695


9,365,855


(56,097,180)


(46,731,325)


(6,444,544)

Income (loss) before
share of gains in equity
investees

(360,996,961)


57,131,371


135,479,530


192,610,901


26,562,258











Share of loss/(income) in
equity investees, net of
tax

75,125


(445,618)


(341,265)


(786,883)


(108,516)

Net income(loss)

(360,921,836)


56,685,753


135,138,265


191,824,018


26,453,742

 

 

GreenTree Hospitality Group Ltd.

Unaudited Restaurant Business Results


Six Months 
Ended


Three Months Ended


Six Months Ended


 June 30, 2022


March 31,
202
3


June 30,
202
3


June 30, 2023


June 30,
202
3


RMB


RMB


RMB


RMB


US$

Revenues










Leased-and-operated revenues

171,008,920


89,376,893


78,963,181


168,340,074


23,215,158

Franchised-and-managed revenues

18,229,310


9,046,396


8,309,496


17,355,892


2,393,487

Wholesale and others

62,284,229


28,765,802


17,666,895


46,432,697


6,403,362

Total revenues

251,522,459


127,189,091


104,939,572


232,128,663


32,012,007











Operating costs and
expenses










Restaurant operating
costs

(234,911,742)


(109,219,983)


(95,088,176)


(204,308,159)


(28,175,384)

Selling and marketing
expenses

(9,717,435)


(4,939,580)


(4,446,065)


(9,385,645)


(1,294,340)

General and
administrative expenses

(21,847,196)


(11,663,076)


(9,675,734)


(21,338,810)


(2,942,756)

Other operating expenses

(2,240,920)


(1,341,263)


(5,649,391)


(6,990,654)


(964,055)

Other general expenses

-


-


-


-


-

Total operating costs
and expenses

(268,717,293)


(127,163,902)


(114,859,366)


(242,023,268)


(33,376,535)











Other operating income

1,126,309


551,423


327,709


879,132


121,238

Income from operations

(16,068,525)


576,612


(9,592,085)


(9,015,473)


(1,243,290)











Interest income and other,
net

312,420


153,716


153,295


307,011


42,339

Interest expense

(2,262,963)


(803,371)


(701,207)


(1,504,578)


(207,491)

Gains (losses) from
investment in equity
securities

-


-


-


-


-

Other income, net

87,152


276,958


172,926


449,884


62,041

Income before income
taxes

(17,931,916)


203,915


(9,967,071)


(9,763,156)


(1,346,401)











Income tax expense

(5,271,945)


(2,407,407)


(1,940,124)


(4,347,531)


(599,552)

Income (loss) before
share of gains in equity
investees

(23,203,862)


(2,203,492)


(11,907,194)


(14,110,686)


(1,945,953)











Share of loss/(income) in
equity investees, net of
tax

-


-


-


-


-

Net income(loss)

(23,203,862)


(2,203,492)


(11,907,194)


(14,110,686)


(1,945,953)

 

 

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements


Six Months
Ended


Six Months
Ended


Six Months
Ended


Six Months
Ended


 June 30, 2022


 June 30, 2022


 June 30,
2022


 June 30, 2022


Hotel


Restaurant


Elimination


Total


RMB


RMB


RMB


RMB

Revenues








Leased-and-operated hotels

171,272,365


171,008,920


(229,756)


342,051,529

Franchised-and-managed
hotels

275,539,547


18,229,310




293,768,857

Wholesale and Others

10,564,787


62,284,229




72,849,016

Total revenues

457,376,699


251,522,459


(229,756)


708,669,402









Operating costs and
expenses








Operating costs

(307,750,028)


(234,911,742)


(289,605)


(542,951,375)

Selling and marketing
expenses

(18,852,606)


(9,717,435)




(28,570,041)

General and administrative
expenses

(99,724,402)


(21,847,196)




(121,571,598)

Other operating expenses

(2,048,734)


(2,240,920)




(4,289,654)

Other general expenses

(490,619,710)






(490,619,710)

Total operating costs and
expenses

(918,995,480)


(268,717,293)


(289,605)


(1,188,002,378)









Other operating income

3,917,398


1,126,309




5,043,707

Income from operations

(457,701,383)


(16,068,525)


(519,361)


(474,289,269)

 

 

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements


Six Months
Ended


Six Months
Ended


Six Months
Ended


Six Months
Ended


 June 30, 2023


 June 30, 2023


 June 30, 2023


 June 30, 2023


Hotel


Restaurant


Elimination


Total


RMB


RMB


RMB


RMB

Revenues








Leased-and-operated hotels

213,563,927


168,340,074


(1,125,179)


380,778,822

Franchised-and-managed
hotels

347,417,000


17,355,892




364,772,892

Wholesales and others

2,225,579


46,432,698




48,658,277

Total revenues

563,206,506


232,128,664


(1,125,179)


794,209,991









Operating costs and
expenses








Operating costs

(284,364,378)


(204,308,159)


610,088


(488,062,449)

Selling and marketing expenses

(24,838,605)


(9,385,645)




(34,224,250)

General and administrative
expenses

(90,535,547)


(21,338,810)




(111,874,357)

Other operating expenses

(843,564)


(6,990,654)




(7,834,218)

Other general expenses

(15,973,584)






(15,973,584)

Total operating costs and
expenses

(416,555,678)


(242,023,268)


610,088


(657,968,858)









Other operating income

13,791,785


879,132




14,670,917

Income from operations

160,442,613


(9,015,472)


(515,091)


150,912,050

 

 

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows


Six Months
Ended


Three Months Ended


Six Months Ended


 June 30,
2022


 March 31,
2023


 June 30,
2023


 June 30,
2023


 June 30,
2023


RMB


RMB


RMB


RMB


US$











Operating
activities:










Net (loss) income

-384,515,218


54,289,102


123,037,911


177,327,013


24,454,513











Depreciation and
amortization

79,849,031


31,080,092


35,745,507


66,825,599


9,215,672

Impairment of long
lived assets

56,212,849


2,900,000




2,900,000


399,928

Impairment of
goodwill

91,236,480









Share of (gains)
losses in equity
method investments

-75,125


445,618


341,265


786,883


108,516

Non-cash lease
expense

41,659,260


64,053,832


70,769,259


134,823,091


18,592,954

Loss from disposal
of a subsidiary

13,944,925


1,223,952




1,223,952


168,791

Interest income

-262,334


-390,378


-1,267,532


-1,657,910


-228,636

Bad debt expense

340,846,428


12,359,278


6,320,196


18,679,474


2,576,017

Losses and
impairment (Gains)
on equity securities
held

-21,687,584


4,536,562


263,836


4,800,398


662,005

(Gains) losses on
disposal of property
and equipment

3,050,035


-113,587


341,428


227,841


31,421

Foreign exchange
(gains) losses

-12,024,153


987,543


-2,075,742


-1,088,199


-150,070

Share-based
compensation

271,139


-11,636


40,228


28,592


3,943

Common control
acquisition

519,360


257,546


257,546


515,092


71,034

Changes in
operating assets and
liabilities

-65,089,156


-6,084,179


-86,198,991


-92,283,170


-12,726,431

Net cash provided
by operating
activities

143,935,937


165,533,745


147,574,911


313,108,656


43,179,657











Investing
activities:










Purchases of
property and
equipment

-30,771,557


-34,116,117


-37,617,117


-71,733,234


-9,892,465

Purchases of
intangible assets

-60,215


-42,454


-309,827


-352,281


-48,582

Proceeds from
disposal of property
and equipment

2,288,823


6,973,574


7,723,107


14,696,681


2,026,765

Purchases of
investments

-48,860,000




-51,370,000


-51,370,000


-7,084,247

Proceeds from
investments

506,295,349


110,300,378


61,142,806


171,443,184


23,643,096

Loan advances

94,927,368


27,302,903


48,235,746


75,538,649


10,417,256

Loan collections

-200,868,160


-8,029,596


-1,945,000


-9,974,596


-1,375,560

Net cash (used in)
provided by
investing activities

322,951,608


102,388,688


25,859,715


128,248,403


17,686,263











Financing
activities:










Distribution to the
shareholders

-40,999,458









Loan from non-
controlling interest

300,000









Repayment of
short-term
borrowings

-169,100,000


-136,600,000


-17,800,000


-154,400,000


-21,292,734

Proceeds from bank
borrowings

25,300,000


117,000,000




117,000,000


16,135,038

Capital contribution 
from non
-controlling
interest holders

-1,600,000









Net cash provided
by (used in)
financing
activities

-186,099,458


-19,600,000


-17,800,000


-37,400,000


-5,157,696











Effect of exchange
rate changes on
cash and cash
equivalents

649,388


-40,524


383,575


343,051


47,309











Net (decrease)
increase in cash
and cash equivalents

281,437,475


248,281,909


156,018,201


404,300,110


55,755,533

Cash and cash
equivalents at the
beginning of the
period

385,452,920


734,629,202




734,629,202


101,310,000

Cash and cash
equivalents at the
end of the period

666,890,395


982,911,111


156,018,201


1,138,929,312


157,065,533

 

 

 

GreenTree Hospitality Group Ltd.

Unaudited Reconciliation of GAAP and Non-GAAP Results


Six Months Ended


 June 30, 2022


 June 30, 2023


June 30, 2023


RMB


RMB


US$

Net income

(384,515,218)


177,327,013


24,454,513







Deduct:






Other operating income

5,043,707


14,670,917


2,023,212

Interest income and other, net

24,042,558


17,379,351


2,396,722

Gains from investment in equity
securities

21,687,584


-


-

Share of gain in equity investees, net
of tax

75,125


-


-

Other income, net

14,751,769


74,969,507


10,338,768







Add:






Other operating expenses

4,289,654


7,834,218


1,080,388

Other general expenses

490,619,710


15,973,584


2,202,858

Income tax expenses (benefits)  

(46,658,590)


50,950,083


7,026,338

Share of loss in equity investees, net
of tax

-


786,883


108,516

Interest expenses

17,441,575


9,396,530


1,295,841

Depreciation and amortization

79,849,031


66,825,599


9,215,672

Losses from investment in equity
securities

-


4,800,398


662,005

Adjusted EBITDA (Non-GAAP)

95,425,419


226,874,533


31,287,429








Six Months Ended


 June 30, 2022


 June 30, 2023


June 30, 2023


RMB


RMB


US$

Net income

(384,515,218)


177,327,013


24,454,513







Deduct:






Government subsidies (net of 25%
tax)

1,251,065


6,671,305


920,015

Gains from investment in equity
securities (net of 25% tax)

16,265,688


-


-

Other income (net of 25% tax)

11,063,827


56,227,130


7,754,076







Add:






Share-based compensation

271,139


28,592


3,943

Losses from investments in equity
securities (net of 25% tax)

-


3,600,299


496,504

One-time fees and expenses

4,588,086


2,055,989


283,534

Other general expenses

490,619,710


15,973,584


2,202,858

Impairment charges and provisions
for other assets

-


-


-

Core net income (Non-GAAP)

82,383,137


136,087,042


18,767,261







Core net income per ADS (Non-
GAAP)






Class A ordinary share-basic and
diluted

0.80


1.33


0.18

Class B ordinary share-basic and
diluted

0.80


1.33


0.18

 

 

Hotel Operational Data  


June 30, 2022 

June 30, 2023

Total hotels in operation:

4,669

4,108

    Leased and owned hotels

67

65

    Franchised hotels

4,602

4,043

Total hotel rooms in operation

332,073

303,387

    Leased and owned hotels

6,986

7,137

    Franchised hotels

325,087

296,250

Number of cities

367

357








Quarter Ended

2022 Q1

2023Q1

 Occupancy rate (as a percentage)



 Leased-and-owned hotels

52.6 %

62.9 %

 Franchised hotels

60.2 %

71.9 %

 Blended

60.0 %

71.7 %

 Average daily rate (in RMB)



 Leased-and-owned hotels

 

199

 

229

 Franchised hotels

 

152

 

166

 Blended

 

153

 

167

RevPAR (in RMB)



 Leased-and-owned hotels

 

105

 

144

 Franchised hotels

 

91

 

119

 Blended

 

92

 

120





Quarter Ended

2022 Q2

2023Q2

 Occupancy rate (as a percentage)



 Leased-and-owned hotels

57.1 %

74.6 %

 Franchised hotels

62.3 %

77.9 %

 Blended

62.2 %

77.8 %

 Average daily rate (in RMB)



 Leased-and-owned hotels

 

217

 

255

 Franchised hotels

 

145

 

179

 Blended

147

181

RevPAR (in RMB)



 Leased-and-owned hotels

 

124

 

190

 Franchised hotels

 

90

 

139

 Blended

 

91

 

141

 

 


Number of Hotels in Operation

Number of Hotel Rooms in
Operation


June 30,
2022

June 30,
2023

June 30,
2022

June 30,
2023

 Mid-to-up-scale

528

438

47,347

42,338

 GreenTree Eastern

201

217

22,402

23,205

 Deepsleep Hotel

7

7

467

534

 Gem

52

54

4,728

4,873

 Gya

66

70

5,639

5,904

 Vx

81

90

7,069

7,822

Urban Garden and others

121

-

7,042

-

 Mid-scale

2,999

2,933

233,950

229,270

 GreenTree Inn

2,183

2259

180,255

181,015

 GT Alliance

521

545

37,545

39,091

 GreenTree Apartment

19

21

1,260

1,351

Vatica                                

110

108

7,969

7,813

City 118 Selected and others

166

-

6,921

-

 Economy hotels

1,142

737

50,776

31,779

Shell

648

737

28,030

31,779

City 118 and others

494

-

22,746

-

Total

4,669

4,108

332,073

303,387

 

Restaurant Operational Data


June 30, 2022 

June 30, 2023

Total restaurants in operation:

280

218

    Leased and owned restaurants

146

104

    Franchised restaurants

134

114

Number of cities

81

66

Da Niang Dumplings

245

182

Bellagio

35

36

Total restaurants in operation:

280

218








Quarter Ended

2022 Q1

2023Q1

ADT



Leased-and-owned restaurants

170

143

Franchised restaurants

95

81

Blended

130

110

AC (in RMB)



Leased-and-owned restaurants

51

61

Franchised restaurants

39

46

Blended

46

55

ADS (in RMB)



Leased-and-owned restaurants

8,640

8,716

Franchised restaurants

3,712

3,745

Blended

6,027

6,080





Quarter Ended

2022 Q2

2023Q2

ADT



Leased-and-owned restaurants

92

142

Franchised restaurants

56

86

Blended

78

120

AC (in RMB)



Leased-and-owned restaurants

60

61

Franchised restaurants

45

46

Blended

52

53

ADS (in RMB)



Leased-and-owned restaurants

5,505

8,657

Franchised restaurants

2,503

3,936

Blended

4,051

6,371

 

 

For more information, please contact:

GreenTree

Ms. Selina Yang
Phone: +86-158-2166-6251
E-mail: ir@998.com

Mr. Allen Wang
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 

 

 

[1]  The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB 7.2513 on June 30, 2023 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 the provision for bad debts, 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 abovementioned definition.

[3]  Core net income is calculated as net income plus share-based compensation, losses from investments in equity securities (net of 25% tax), one-time fees and expense and asset impairment/accrued bad debts 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).

 

 

Cision View original content:https://www.prnewswire.com/news-releases/greentree-hospitality-group-ltd-reports-first-half-2023-financial-results-301931155.html

SOURCE GreenTree Hospitality Group Ltd.

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