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GreenTree Hospitality Group Ltd. Reports Second Quarter 2018 Financial Results

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GreenTree Hospitality Group Ltd. Reports Second Quarter 2018 Financial Results

PR Newswire

  • A total of 2,434 hotels with 201,275 hotel rooms were in operation as of June 30, 2018, as compared to 2,354 hotels and 195,552 hotel rooms as of March 31, 2018. 
  • Total revenues increased 20.3% year-over-year from RMB193.9 million for the second quarter of 2017 to RMB233.4 million (US$35.3 million)[1] for the second quarter of 2018. Total revenues increased 21.7% year-over-year from RMB360.2 million for the first half of 2017 to RMB438.3 million (US$66.2 million) for the first half of 2018.
  • Adjusted EBITDA (non-GAAP) increased 21.2% year-over-year from RMB114.8 million for the second quarter of 2017 to RMB139.2 million (US$21.0 million)[1] for the second quarter of 2018. Adjusted EBITDA (non-GAAP) increased 24.8% year-over-year from RMB202.5 million for the first half of 2017 to RMB252.8 million (US$38.2 million)[1] for the first half of 2018.
  • Core net income (non-GAAP) increased 24.7% year-over-year from RMB88.9 million for the second quarter of 2017 to RMB110.9 million (US$16.8million)[1] for the second quarter of 2018. Core net income (non-GAAP) increased 25.9% year-over-year from RMB154.8 million for the first half of 2017 to RMB194.8 million (US$29.4 million)[1] for the first half of 2018.
  • Basic and diluted core net income per ADS (non-GAAP) were RMB1.09 (US$0.16)[1] for the second quarter of 2018. Basic and diluted core net income per ADS (non-GAAP) were RMB2.01 (US$0.30)[1] for the first half of 2018.
  • As of June 30, 2018, the Company had a strong pipeline with a total of 477 hotels contracted for or under development. For the second quarter of 2018, the Company opened 104 F&M hotels, compared to 97 hotels for the second quarter of 2017.
  • The Company reaffirmed guidance for growth in full year 2018 total revenues of 20-25% from 2017.

SHANGHAI, Aug. 23, 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 second quarter ended June 30, 2018.

Second Quarter of 2018 Operational Highlights

  • As of June 30, 2018, GreenTree had 26 leased-and-operated ("L&O") hotels and 2,408 franchised-and-managed ("F&M") hotels in operation in 267 cities across China, compared to 26 L&O hotels and 2,328 F&M hotels in operation in 266 cities as of March 31, 2018.
  • In the second quarter of 2018, the Company opened 104 F&M hotels, 68 in the mid-scale segment, 5 in the business to mid-to-up-scale segment and 31 in the economy segment. Of the hotels opened, 7 hotels were in Tier 1 cities[2], 22 in Tier 2 cities[3] and the remaining 75 hotels in other cities in China, while the Company closed a total of 24 F&M hotels in the quarter.
  • As of June 30, 2018, the Company had a strong pipeline with a total of 477 hotels contracted for or under development.
  • The average daily room rate, or ADR, for all hotels in operation, was RMB164 in the second quarter of 2018, compared to RMB156 in the second quarter of 2017, an increase of 5.1% year-over-year.
  • The occupancy rate for all hotels in operation was 82.6% in the second quarter of 2018, compared to 83.2% in the second quarter of 2017, a decrease of 0.6% year-over-year.
  • The revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR by its occupancy rate, was RMB136 in the second quarter of 2018, representing a 4.6% year-over-year increase from RMB130 in the second quarter of 2017.

As of June 30, 2018, we had approximately 24 million individual loyal members and over 930,000 corporate members, compared to approximately 22 million and over 860,000 respectively, as of March 31, 2018. During the second quarter of 2018, we sold approximately 95.4% 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 4.6% of our room nights.

"After our successful listing on the NYSE on March 27, 2018, we continued to execute our organic growth strategy in the second quarter." commented Mr. Alex Xu, Chairman and Chief Executive Officer of GreenTree. "We continue to grow our pipeline and are on track to open more new hotels in the second half of the year. We are also actively searching for appropriate acquisition opportunities, which we believe will build a stronger hotel platform and create long-term shareholder value."

Second Quarter of 2018 Financial Results



Quarter Ended


June 30, 2017

June 30, 2018

June 30, 2018


RMB

RMB

USD

Revenues




Leased-and-operated hotels

47,063,998

49,740,478

7,516,960

Franchised-and-managed hotels

134,262,270

165,509,815

25,012,440

Membership fees

12,619,532

18,103,997

2,735,941

Total revenues

193,945,800

233,354,290

35,265,341

 

First Half of 2018 Financial Results



Six months Ended


June 30, 2017

June 30, 2018

June 30, 2018


RMB

RMB

USD

Revenues




Leased-and-operated hotels

88,826,814

93,915,936

14,192,915

Franchised-and-managed hotels

246,498,634

309,378,578

46,754,406

Membership fees

24,887,139

35,003,197

5,289,809

Total revenues

360,212,587

438,297,711

66,237,130

Total revenues for the second quarter of 2018 were RMB233.4 million (US$35.3 million)[1], representing a 20.3% increase over second quarter 2017. Total revenues for the first half of 2018 were RMB438.3 million (US$66.2 million)[1], representing a 21.7% increase over first half of 2017. The year-over-year increase in the second quarter of 2018 was primarily attributable to the net additional 80 F&M hotels to our network, the opening of a new 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 conversion of five L&O hotels to F&M hotels after the first quarter of 2017.

  • Total revenues from leased-and-operated hotels for the second quarter of 2018 were RMB49.7 million (US$7.5 million)[1], representing a 5.7% year-over-year increase. Total revenues from leased-and-operated hotels for the first half of 2018 were RMB93.9 million (US$14.2 million)[1], representing a 5.7% year-over-year increase. The year-over-year increase in the second quarter of 2018 was attributable to RevPAR growth of 8.4% and moderate sublease revenue growth, resulting from a GreenTree Eastern hotel opened in Shanghai in June 2017, and partially offset by the conversion of five hotels to F&M hotels after the first quarter of 2017.
  • Total revenues from franchised-and-managed hotels for the second quarter of 2018 were RMB165.5 million (US$25.0 million)[1], representing a 23.3% year-over-year increase. Total revenues from franchised-and-managed hotels for the first half of 2018 were RMB309.4 million (US$46.8 million)[1], representing a 25.5% year-over-year increase. Initial franchise fees increased 20.3% year-over-year in the second quarter of 2018, primarily due to the gross opening of 104 hotels in the second quarter of 2018 as compared to 97 hotels opened in the second quarter of 2017. The 23.6% year-over-year increase in recurring franchisee management fees in the second quarter of 2018 was primarily due to RevPAR growth of 4.7% 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. 

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