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GreenTree Hospitality Group Ltd. Reports First Quarter 2018 Financial Results

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GreenTree Hospitality Group Ltd. Reports First Quarter 2018 Financial Results

PR Newswire

  • A total of 2,354 hotels with 195,552 hotel rooms were in operation as of March 31, 2018, as compared to 2,289 hotels and 190,807 hotel rooms as of December 31, 2017
  • Total revenues increased 23.3% year-over-year from RMB166.3 million for the first quarter of 2017 to RMB204.9 million (US$32.7 million)[1] for the first quarter of 2018.
  • Adjusted EBITDA (non-GAAP) increased 29.6% year-over-year from RMB87.7 million for the first quarter of 2017 to RMB113.6 million (US$18.1 million)[1] for the first quarter of 2018.
  • Net income attributable to GreenTree Hospitality Group Ltd. increased 21.0% year-over-year from RMB74.5 million for the first quarter of 2017 to RMB90.2 million (US$14.4 million)[1] for the first quarter of 2018.
  • Core net income (non-GAAP) increased 27.5% year-over-year from RMB65.9 million for the first quarter of 2017 to RMB84.0 million (US$13.4 million)[1] for the first quarter of 2018.
  • Basic and diluted earnings per ADS were RMB0.98 (US$0.16)[1] for the first quarter of 2018, compared to RMB0.82 for the first quarter of 2017.
  • The Company provided guidance for growth in full year 2018 total revenues of 20-25% from 2017.

SHANGHAI, May 15, 2018 /PRNewswire/ -- GreenTree Hospitality Group Ltd. (NYSE:GHG) ("GreenTree", the "Company", "we", "us" and "our"), a leading franchised hotel operator in China, today announced its unaudited financial results for the first quarter ended March 31, 2018.

First Quarter of 2018 Operational Highlights

  • As of March 31, 2018, GreenTree had 26 leased-and-operated ("L&O") hotels and 2,328 franchised-and-managed ("F&M") hotels in operation in 266 cities across China, compared to 26 L&O hotels and 2,263 F&M hotels in operation in 263 cities as of December 31, 2017.
  • In the first quarter of 2018, the Company opened 80 F&M hotels, 44 in the mid-scale segment, 6 in the business to mid-to-up-scale segment and 30 in the economy segment. Of the hotels opened, 10 hotels were in Tier 1 cities[2], 22 in Tier 2 cities[3] and the remaining 48 hotels in other cities in China, while the Company closed a total of 15 F&M hotels in the quarter.
  • As of March 31, 2018, the Company had a total of 406 hotels contracted for or under development.
  • The average daily room rate, or ADR, for all hotels in operation, was RMB156 in the first quarter of 2018, compared to RMB152 in the first quarter of 2017, an increase of 2.6% year-over-year.
  • The occupancy rate for all hotels in operation was 79.2% in the first quarter of 2018, compared to 77.6% in the first quarter of 2017, an increase of 1.6% year-over-year.
  • The revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR by its occupancy rate, was RMB124 in the first quarter of 2018, representing a 5.1% year-over-year increase from RMB118 in the first quarter of 2017.

As of March 31, 2018, we had approximately 22 million individual loyal members and over 860,000 corporate members, compared to approximately 21 million and over 820,000, respectively, as of December 31, 2017. During the first quarter of 2018, we sold approximately 96% of our room nights through our direct sales channels, including our individual loyal members and corporate members, while online travel agencies, or OTAs, only contributed approximately 4% of our room nights.

"After 13 years of hard work by our team and fast organic growth, we are proud to have completed our IPO on the NYSE on March 27, 2018,' commented Mr. Alex Xu, Chairman and Chief Executive Officer of GreenTree. "Historically, the first quarter has been our softest quarter due to the Chinese New Year holiday. However we were able to achieve solid operating results for the quarter. We are quite pleased with our start as a public company, and we are confident in our positioning going forward. We will continue to focus on our existing business model which we believe will benefit our customers and franchisees, grow our membership program and invest in our brands and our technology. We have a strong pipeline and are on track to open more new hotels. We are particularly excited to premier our three new business to mid-to-up-scale brands this year, namely Gme, Gya and VX. With additional cash on our balance sheet, we intend to make selective acquisitions to further expand our hotel network. Overall, continued strong economic growth and increasing consumer spending, along with our distinct portfolio of brands, strong pipeline, and asset-light model, should help us continue to deliver strong operational performance and value to our shareholders over the long term."

 

First Quarter of 2018 Financial Results



Quarter Ended


March 31, 2017

March 31, 2018

March 31, 2018


RMB

RMB

USD

Revenues




Leased-and-operated hotels

41,762,816

44,175,458

7,042,607

Franchised-and-managed hotels

112,236,364

143,868,763

22,936,065

Membership fees

12,267,607

16,899,200

2,694,130

Total revenues

166,266,787

204,943,421

32,672,802

 

Total revenues for the first quarter of 2018 were RMB204.9 million (US$32.7 million)[1], representing a 23.3% increase over the first quarter of 2017. This year-over-year increase was primarily attributable to the net additional 65 F&M hotels to our network, the opening of a GreenTree Eastern L&O hotel in Shanghai in June 2017, improved RevPAR for both F&M and L&O hotels as well as membership growth; and was partially offset by the closure of one L&O hotel and the conversion of six L&O hotels to F&M hotels.

  • Total revenues from leased-and-operated hotels for the first quarter of 2018 were RMB44.2 million (US$7.0 million)[1], representing a 5.8% year-over-year increase. This year-over-year increase was mainly attributable to RevPAR growth of 17.0% resulting from a GreenTree Eastern hotel opened in Shanghai in 2017, and partially offset by the closure of one hotel and the conversion of six hotels to F&M hotels in 2017.
  • Total revenues from franchised-and-managed hotels for the first quarter of 2018 were RMB143.9 million (US$22.9 million)[1], representing a 28.2% year-over-year increase. Initial franchise fees increased 75.4% year-over-year, primarily due to the gross opening of 80 hotels in the first quarter of 2018 as compared to 48 hotels opened in the first quarter of 2017. The 25% year-over-year increase in recurring franchisee management fees was primarily due to RevPAR growth of 4.2% as well as growth in central reservation system ("CRS") usage fees, annual IT and marketing fees and hotel manager fees, which in turn resulted from the increased number of hotels and hotel rooms in operation.

 


Quarter Ended


March 31, 2017

March 31, 2018

March 31, 2018


RMB

RMB

USD

 Initial franchise fee

7,122,581

12,494,913

1,991,983

 Recurring franchise management fee

105,113,783

131,373,850

20,944,082

 Revenues from franchised-and-managed hotels

112,236,364

143,868,763

22,936,065

 

  • Membership fees represent the one-time membership fee the Company charges in relation to its paid memberships recognized as our revenue on a straight line basis over the estimated life of the membership, which is three to six years depending on the membership level. This totaled RMB16.9 million (US$2.7 million)[1] in the first quarter of 2018, representing a 37.8% year-over-year increase. The increase was primarily a result of an increase in the number of our paid members from approximately 17 million as of December 31, 2017 to approximately 18 million as of March 31, 2018 as we continued to promote our paid membership program.

 


Quarter Ended


March 31, 2017

March 31, 2018

March 31, 2018


RMB

RMB

USD

Operating cost and expenses




Hotel operating costs

57,034,812

65,111,072

10,380,237

Selling and marketing expenses

9,653,945

11,349,067

1,809,308

General and administrative expenses

18,434,930

20,400,857

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