- 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.
GreenTree Hospitality Group Ltd. (NYSE :GHG ), 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.
| Quarter Ended | ||||
| June 30, 2017 | June 30, 2018 | June 30, 2018 | ||
| RMB | RMB | USD | ||
| Initial franchise fee | 13,928,628 | 16,759,749 | 2,532,794 | |
| Recurring franchise management fee | 120,333,642 | 148,750,066 | 22,479,646 | |
| Revenues from franchised-and-managed hotels | 134,262,270 | 165,509,815 | 25,012,440 | |
| Six months Ended | ||||
| June 30, 2017 | June 30, 2018 | June 30, 2018 | ||
| RMB | RMB | USD | ||
| Initial franchise fee | 21,051,209 | 29,254,662 | 4,421,070 | |
| Recurring franchise management fee | 225,447,425 | 280,123,916 | 42,333,336 | |
| Revenues from franchised-and-managed hotels | 246,498,634 | 309,378,578 | 46,754,406 | |
- 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. Membership fees totaled RMB18.1 million (US$2.7 million)[1] in the second quarter of 2018, representing a 43.5% year-over-year increase. These fees totaled RMB35.0 million (US$5.3 million)[1] in the first half of 2018, representing a 40.6% year-over-year increase. The year-over-year increase in the second quarter of 2018 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 19 million as of June 30, 2018 as we continued to promote our paid membership program.
| Quarter Ended | |||
| June 30, 2017 | June 30, 2018 | June 30, 2018 | |
| RMB | RMB | USD | |
| Operating costs and expenses | |||
| Hotel operating costs | 57,725,535 | 65,633,713 | 9,918,803 |
| Selling and marketing expenses | 9,401,701 | 11,555,287 | 1,746,277 |
| General and administrative expenses | 18,146,306 | 25,150,930 | 3,800,899 |
| Other operating expenses | 295,431 | 35,330 | 5,339 |
| Total operating costs and expenses | 85,568,973 | 102,375,260 | 15,471,318 |
| Six months Ended | |||
| June 30, 2017 | June 30, 2018 | June 30, 2018 | |
| RMB | RMB | USD | |
| Operating costs and expenses | |||
| Hotel operating costs | 114,760,347 | 130,744,785 | 19,758,623 |
| Selling and marketing expenses | 19,055,646 | 22,904,354 | 3,461,389 |
| General and administrative expenses | 36,581,236 | 45,551,787 | 6,883,950 |
| Other operating expenses | 1,148,166 | 178,592 | 26,989 |
| Total operating costs and expenses | 171,545,395 | 199,379,518 | 30,130,951 |
Hotel operating costs for the second quarter of 2018 were RMB65.6 million (US$9.9 million)[1], compared to RMB57.7 million in the second quarter of 2017, representing a 13.7% year-over-year increase. Hotel operating costs for the first half of 2018 were RMB130.7 million (US$19.8 million)[1], compared to RMB114.8 million in the first half of 2017, representing a 13.9% year-over-year increase. The year-over-year increase in the second quarter of 2018 were mainly attributable to the increased general managers in our hotel network and other costs associated with the expansion of our F&M hotels, and higher rental costs, utilities and personnel cost in the GreenTree Eastern L&O hotel and other L&O hotels; and was partially offset by reduced rental costs, depreciation and amortization and operating costs related to the conversion of five L&O hotels.
| Quarter Ended | |||
| June 30, 2017 | June 30, 2018 | June 30, 2018 | |
| RMB | RMB | USD | |
| Rental | 15,216,595 | 17,660,357 | 2,668,897 |
| Utilities | 4,093,561 | 5,104,337 | 771,386 |
| Personnel cost | 6,828,204 | 7,937,739 | 1,199,580 |
| Depreciation and amortization | 5,601,660 | 3,714,393 | 561,332 |
| Consumable, food and beverage | 2,803,351 | 4,602,750 | 695,584 |
| Costs of general managers of franchised-and-operated hotels | 13,756,357 | 15,729,674 | 2,377,125 |
| Other costs of franchised-and-operated hotels | 5,957,711 | 7,417,928 | 1,121,024 |
| Others | 3,468,096 | 3,466,535 | 523,875 |
| Hotel Operating Costs | 57,725,535 | 65,633,713 | 9,918,803 |
| Six months Ended | |||
| June 30, 2017 | June 30, 2018 | June 30, 2018 | |
| RMB | RMB | USD | |
| Rental | 30,516,774 | 35,292,424 | 5,333,518 |
| Utilities | 8,789,648 | 10,215,337 | 1,543,779 |
| Personnel cost | 13,230,428 | 15,169,589 | 2,292,483 |
| Depreciation and amortization | 11,743,087 | 8,534,806 | 1,289,811 |
| Consumable, food and beverage | 5,548,470 | 9,039,387 | 1,366,065 |
| Costs of general managers of franchised-and-operated hotels | 26,678,079 | 31,315,282 | 4,732,478 |
| Other costs of franchised-and-operated hotels | 11,549,511 | 14,167,964 | 2,141,114 |
| Others | 6,704,350 | 7,009,996 | 1,059,375 |
| Hotel Operating Costs | 114,760,347 | 130,744,785 | 19,758,623 |
Selling and marketing expenses for the second quarter of 2018 were RMB11.6 million (US$1.7 million)[1], compared to RMB9.4 million in the second quarter of 2017. Selling and marketing expenses for the first half of 2018 were RMB22.9 million (US$3.5 million)[1], compared to RMB19.1 million in the first half of 2017. The year-over-year increase of 22.9% in the second quarter of 2018 was mainly attributable to model room construction, exhibition and other advertising and promotion expenses related to our three new business to mid-to-upscale brands, increased personnel, compensation and other costs (i.e. travel expenses) of business development personnel, as a result of the increased opening of hotels.
General and administrative expenses for the second quarter of 2018 were RMB25.2 million (US$3.8 million)[1], compared to RMB18.1 million in the second quarter of 2017. General and administrative expenses for the first half of 2018 were RMB45.6 million (US$6.9 million)[1], compared to RMB36.6 million in the first half of 2017. The year-over-year increase of 38.6% in the second quarter of 2018 was primarily attributable to increased headquarter staff costs, increased share-based compensation expenses and new IT program expenses.
Gross profit for the second quarter of 2018 was RMB167.7 million (US$25.3 million)[1], compared to RMB136.2 million in the second quarter of 2017, representing a year-over-year increase of 23.1%. Gross margin in the second quarter improved to 71.9%, compared to 70.2% a year ago. Gross profit for the first half of 2018 was RMB307.6 million (US$46.5 million)[1], compared to RMB245.5 million in the first half of 2017, representing a year-over-year increase of 25.3%.
Income from operations for the second quarter of 2018 was RMB143.2 million (US$21.6 million)[1], compared to RMB113.1 million in the second quarter of 2017, representing a year-over-year increase of 26.6%. Operating margin in the second quarter improved to 61.4%, compared to 58.3% a year ago. Income from operations for the first half of 2018 was RMB265.0 million (US$40.0 million)[1], compared to RMB193.7 million in the first half of 2017, representing a year-over-year increase of 36.8%.
Adjusted EBITDA (non-GAAP) for the second quarter of 2018 was RMB139.2 million (US$21.0 million)[1], compared to RMB114.8 million for the second quarter of 2017, a year-over-year increase of 21.2%. The adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as percentage of total revenues, was 59.6% in the second quarter of 2018, compared to 59.2% in the second quarter of 2017. Adjusted EBITDA (non-GAAP) for the first half of 2018 was RMB252.8 million (US$38.2 million)[1], compared to RMB202.5 million for the first half of 2017, a year-over-year increase of 24.8%.
Core net income (non-GAAP) for the second quarter of 2018 was RMB110.9 million (US$16.8 million)1, compared to RMB88.9 million in the second quarter of 2017, representing a 24.7% year-over-year increase. The core net margin, defined as core net income (non-GAAP) as percentage of total revenues, was 47.5% in the second quarter of 2018, compared to 45.9% in the second quarter of 2017. Core net income (non-GAAP) for the first half of 2018 was RMB194.8 million (US$29.4 million)[1], compared to RMB154.8 million in the first half of 2017, representing a 25.9% year-over-year increase.
Net income attributable to GreenTree Hospitality Group Ltd. for the second quarter of 2018 was RMB97.2 million (US$14.7 million)[1], or 41.7% of total revenues, compared to RMB108.7 million, or 56.0% of total revenues, in the second quarter of 2017, a year-over-year decrease of 10.5%. Net income attributable to GreenTree Hospitality Group Ltd. for the first half of 2018 was RMB187.4 million (US$28.3 million)[1] compared to RMB183.2 million in the first half of 2017, a year-over-year increase of 2.3%.
Basic and diluted core net income per ADS (non-GAAP) were RMB1.09 (US$0.16)[1] for the second quarter of 2018, compared to RMB0.97 for the second quarter of 2017. Basic and diluted core net income per ADS (non-GAAP) were RMB2.01 (US$0.30)[1] for the first half of 2018, compared to RMB1.69 for the first half of 2017.
Basic and diluted earnings per ADS for the second quarter of 2018 was RMB0.96 (US$0.14)[1], compared to RMB1.19 for the second quarter of 2017. Basic and diluted earnings per ADS were RMB1.94 (US$0.29)[1] for the first half of 2018, compared to RMB2.01 for the first half of 2017.
Cash flow. Operating cash inflow for the second quarter of 2018 was RMB83.4 million (US$12.6 million)[1], due primarily to improved operating performance across our hotel portfolio. Operating cash inflow for the first half of 2018 was RMB199.4 million (US$30.1 million)[1]. Investing cash outflow for the second quarter of 2018 was RMB337.3 million (US$51.0 million)[1], which was attributable primarily to net purchase of short term investments of RMB274.9 million and purchase of property and equipment of RMB54.7 million. Investing cash outflow for the first half of 2018 was RMB177.2 million (US$26.8 million)[1]. Financing cash outflow for the second quarter of 2018 was RMB185.9 million (US$28.1 million)[1], which was mainly due to dividends distributed to pre-IPO shareholders of RMB160.8 million and IPO related costs. Financing cash inflow for the first half of 2018 was RMB604.6 million (US$91.4 million)[1],
Cash and cash equivalents, restricted cash, Short term investments and Trading securities. As of June 30, 2018, the Company had a total balance of cash and cash equivalents, restricted cash, short term investments and trading securities of RMB1,898.8 million (US$286.9 million)[1], as compared to RMB1,254.6 million as of December 31, 2017, primarily due to the proceeds of our IPO net of capitalized expenses and net operating cash inflow.
Guidance
For the full year 2018, the Company reaffirms total revenue growth guidance of 20-25% from 2017.
The guidance set forth above reflects the Company's current and preliminary view based on our estimates, may not be indicative of our financial results for future interim periods and the full year ended December 31, 2018 and is subject to change.
About GreenTree Hospitality Group Ltd.
GreenTree Hospitality Group Ltd. ("GreenTree" or the "Company") (NYSE :GHG ) is a leading franchised hotel operator in China. As of December 31, 2017, GreenTree had the highest proportion of franchised-and-managed hotels among the top four economy to mid-scale hotel networks in China. In 2017, GreenTree was the fourth largest economy to mid-scale hotel group in China in terms of number of hotel rooms according to the China Hospitality Association. The Company has built a strong suite of brands including its flagship "GreenTree Inns" brand as a result of its long-standing dedication to the hospitality industry in China, the consistent quality of its services, signature hotel designs, broad geographic coverage and convenient locations. GreenTree has positioned its brands to appeal to value- and quality-conscious business and leisure travelers.
| [1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.6171 on June 29, 2018 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20180702 . |
| [2] "Tier 1 cities" refers to the term used by the National Bureau of Statistics of China and refer to Beijing, Shanghai, Shenzhen and Guangzhou. |
| [3] "Tier 2 cities" refers to the 32 major cities, other than Tier 1 cities, as categorized by the National Bureau of Statistics of China, including provincial capitals, administrative capitals of autonomous regions, direct-controlled municipalities and other major cities designated as "municipalities with independent planning" by the State Council. |
| GreenTree Hospitality Group Ltd. | |||
| Unaudited Condensed Consolidated Balance Sheets | |||
| December 31, 2017 | June 30, 2018 | June 30, 2018 | |
| RMB | RMB | USD | |
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | 161,963,665 | 789,355,308 | 119,290,219 |
| Short-term investment | 781,850,000 | 843,769,909 | 127,513,550 |
| Trading securities | 307,754,960 | 262,642,263 | 39,691,445 |
| Accounts receivable, net of allowance for doubtful accounts | 53,882,894 | 72,652,828 | 10,979,557 |
| Amounts due from related parties | 3,248,692 | 6,026,569 | 910,757 |
| Prepaid rent | 4,292,472 | 4,161,168 | 628,851 |
| Inventories | 2,355,154 | 1,393,732 | 210,626 |
| Other current assets | 127,269,801 | 143,086,346 | 21,623,724 |
| Loans receivable, net | 6,600,000 | 20,360,000 | 3,076,877 |
| Deferred tax assets | 36,207,884 | 37,158,836 | 5,615,577 |
| Total current assets | 1,485,425,522 | 2,180,606,959 | 329,541,183 |
| Non-current assets: | |||
| Amounts due from a related party | 2,600,000 | 2,600,000 | 392,921 |
| Restricted cash | 3,000,000 | 3,000,000 | 453,371 |
| Loan receivable, net | - | 12,900,000 | 1,949,494 |
| Property and equipment, net | 96,669,251 | 92,693,446 | 14,008,168 |
| Intangible assets, net | 3,727,383 | 6,649,314 | 1,004,868 |
| Goodwill | 2,959,183 | 2,959,183 | 447,202 |
| Long-term investments | 122,508,832 | 121,418,808 | 18,349,248 |
| Other assets | 5,741,301 | 113,274,089 | 17,118,389 |
| Deferred tax assets | 33,351,457 | 33,396,565 | 5,047,009 |
| TOTAL ASSETS | 1,755,982,929 | 2,569,498,364 | 388,311,853 |
| LIABILITIES AND EQUITY | |||
| Current liabilities: | |||
| Accounts payable | 7,293,341 | 10,152,957 | 1,534,351 |
| Advance from customers | 33,662,363 | 33,191,324 | 5,015,993 |
| Amounts due to related parties | 473,018 | 953,720 | 144,130 |
| Salary and welfare payable | 44,577,683 | 42,926,392 | 6,487,191 |
| Deferred rent | 2,916,205 | 4,146,333 | 626,609 |
| Deferred revenue | 109,101,986 | 134,668,678 | 20,351,616 |
| Accrued expenses and other current liabilities | 293,741,951 | 266,921,014 | 40,338,066 |
| Income tax payable | 103,830,578 | 64,290,664 | 9,715,837 |
| Dividends payable | 39,691,103 | - | - |
| Deferred tax liabilities | 27,745,951 | 18,111,810 | 2,737,122 |
| Total current liabilities | 663,034,179 | 575,362,892 | 86,950,915 |
| Deferred rent | 23,050,635 | 19,777,360 | 2,988,826 |
| Deferred revenue | 144,258,584 | 155,257,846 | 23,463,125 |
| Other long-term liabilities | 73,937,277 | 83,412,257 | 12,605,561 |
| Deferred tax liabilities | 5,797,260 | 4,806,469 | 726,371 |
| Unrecognized tax benefits | 113,299,633 | 160,240,788 | 24,216,165 |
| Total liabilities | 1,023,377,568 | 998,857,612 | 150,950,963 |
| Shareholders' equity: | |||
| Class A ordinary shares | 160,189,926 | 217,421,867 | 32,857,576 |
| Class B ordinary shares | 140,696,841 | 115,534,210 | 17,459,946 |
| Additional paid-in capital | 212,309,734 | 990,664,622 | 149,712,808 |
| Retained earnings | 223,134,889 | 249,728,708 | 37,739,902 |
| Accumulated other comprehensive loss | (4,086,149) | (3,042,408) | (459,780) |
| Total GreenTree Hospitality Group Ltd. shareholders' equity | 732,245,241 | 1,570,306,999 | 237,310,452 |
| Noncontrolling interests | 360,120 | 333,753 | 50,438 |
| Total shareholders' equity | 732,605,361 | 1,570,640,752 | 237,360,890 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,755,982,929 | 2,569,498,364 | 388,311,853 |
| GreenTree Hospitality Group Ltd. | |||||||
| Unaudited Condensed Consolidated Statements of Comprehensive Income | |||||||
| Quarter Ended | Six Months Ended | ||||||
| June 30, 2017 | June 30, 2018 | June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2018 | ||
| RMB | RMB | USD | RMB | RMB | USD | ||
| Revenues | |||||||
| Leased-and-operated hotels | 47,063,998 | 49,740,478 | 7,516,960 | 88,826,814 | 93,915,936 | 14,192,915 | |
| Franchised-and-managed hotels | 134,262,270 | 165,509,815 | 25,012,440 | 246,498,634 | 309,378,578 | 46,754,406 | |
| Membership fees | 12,619,532 | 18,103,997 | 2,735,941 | 24,887,139 | 35,003,197 | 5,289,809 | |
| Total revenues | 193,945,800 | 233,354,290 | 35,265,341 | 360,212,587 | 438,297,711 | 66,237,130 | |
| Operating costs and expenses | |||||||
| Hotel operating costs | (57,725,535) | (65,633,713) | (9,918,803) | (114,760,347) | (130,744,785) | (19,758,623) | |
| Selling and marketing expenses | (9,401,701) | (11,555,287) | (1,746,277) | (19,055,646) | (22,904,354) | (3,461,389) | |
| General and administrative expenses | (18,146,306) | (25,150,930) | (3,800,899) | (36,581,236) | (45,551,787) | (6,883,950) | |
| Other operating expenses | (295,431) | (35,330) | (5,339) | (1,148,166) | (178,592) | (26,989) | |
| Total operating costs and expenses | (85,568,973) | (102,375,260) | (15,471,318) | (171,545,395) | (199,379,518) | (30,130,951) | |
| Other operating income | 4,722,477 | 12,242,088 | 1,850,069 | 5,066,976 | 26,067,489 | 3,939,413 | |
| Income from operations | 113,099,304 | 143,221,118 | 21,644,092 | 193,734,168 | 264,985,682 | 40,045,592 | |
| Interest income and other, net | 5,674,569 | 11,420,031 | 1,725,836 | 12,409,580 | 16,123,893 | 2,436,701 | |
| Gains (losses) from trading securities | 24,385,333 | (25,862,935) | (3,908,500) | 35,967,385 | (31,036,562) | (4,690,357) | |
| Other expense, net | (28,852) | - | - | (69,818) | - | - | |
| Income before income taxes | 143,130,354 | 128,778,214 | 19,461,428 | 242,041,315 | 250,073,013 | 37,791,936 | |
| Income tax expense | (34,494,218) | (31,356,198) | (4,738,662) | (58,331,623) | (61,574,619) | (9,305,378) | |
| Income before share of loss in equity investees | 108,636,136 | 97,422,016 | 14,722,766 |
183,709,692 |
188,498,394 |
28,486,558 | |
| Share of (gain ) loss in equity investees, net of tax | 52,078 | (182,988) | (27,654) | (513,447) | (1,090,024) | (164,728) | |
| Net income | 108,688,214 | 97,239,028 | 14,695,112 | 183,196,245 | 187,408,370 | 28,321,830 | |
| Net loss (gain) attributable to noncontrolling interests | 7,131 | (3,152) | (476) | 35,249 | 26,367 | 3,985 | |
| Net income attributable to ordinary shareholders | 108,695,345 | 97,235,876 | 14,694,636 | 183,231,494 | 187,434,737 | 28,325,815 | |
| Net earnings per share | |||||||
| Class A ordinary share-basic and diluted | 1.19 | 0.96 | 0.14 | 2.01 | 1.94 | 0.29 | |
| Class B ordinary share-basic and diluted | 1.19 | 0.96 | 0.14 | 2.01 | 1.94 | 0.29 | |
| Net earnings per ADS | |||||||
| Class A ordinary share-basic and diluted | 1.19 | 0.96 | 0.14 | 2.01 | 1.94 | 0.29 | |
| Class B ordinary share-basic and diluted | 1.19 | 0.96 | 0.14 | 2.01 | 1.94 | 0.29 | |
| Weighted average shares outstanding | |||||||
| Class A ordinary share-basic and diluted | 48,635,252 | 66,789,299 | 66,789,299 | 48,635,252 | 58,866,740 | 58,866,740 | |
| Class B ordinary share-basic and diluted | 42,716,957 | 34,762,909 | 34,762,909 | 42,716,957 | 37,839,060 | 37,839,060 | |
| Other comprehensive income, net of tax | |||||||
| -Foreign currency translation adjustments | (827,530) | 1,213,623 | 183,407 | (1,979,774) | 1,043,741 | 157,734 | |
| Comprehensive income, net of tax | 107,860,684 | 98,452,651 | 14,878,519 | 181,216,471 | 188,452,111 | 28,479,564 | |
| Comprehensive loss (gain) attributable to noncontrolling interests | 7,131 | (3,152) | (476) | 35,249 | 26,367 | 3,985 | |
| Comprehensive income attributable to ordinary shareholders | 107,867,815 | 98,449,499 | 14,878,043 | 181,251,720 | 188,478,478 | 28,483,549 | |
| GreenTree Hospitality Group Ltd. | ||||||||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | |||||||||||
| 2017 | 2018 | 2018 | 2017 | 2018 | 2018 | |||||||||||
| RMB | RMB | USD | RMB | RMB | USD | |||||||||||
| Operation activities: | ||||||||||||||||
| Net income | 108,688,214 | 97,239,028 | 14,695,112 | 183,196,245 | 187,408,370 | 28,321,830 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 6,115,165 | 4,557,247 | 688,708 | 12,674,080 | 9,951,749 | 1,503,944 | ||||||||||
| Share of loss (gain) in equity method investments | (52,078) | 182,988 | 27,654 | 513,447 | 1,090,024 | 164,728 | ||||||||||
| Interest income | (2,788,706) | (234,004) | (35,364) | (5,838,706) | (4,937,866) | (746,228) | ||||||||||
| Bad debt expense | 581,251 | 379,445 | 57,343 | 1,154,523 | 698,703 | 105,591 | ||||||||||
| (Gains) losses from trading securities | (24,385,333) | 25,862,935 | 3,908,500 | (35,967,385) | 31,036,562 | 4,690,357 | ||||||||||
| Loss on disposal of property and equipment | (695,230) | - | - | 157,506 | - | - | ||||||||||
| Foreign exchange (gain) loss | (374,755) | (1,340,059) | (202,515) | (1,298,256) | (614,853) | (92,919) | ||||||||||
| Share-based compensation | - | 3,586,930 | 542,070 | - | 3,746,769 | 566,225 | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Restricted cash | - | - | - | 7,200,000 | - | - | ||||||||||
| Accounts receivable | (15,539,614) | (8,246,047) | (1,246,172) | (26,245,214) | (19,468,637) | (2,942,171) | ||||||||||
| Prepaid rent | 2,630,635 | (1,455,073) | (219,896) | 6,598,997 | 131,304 | 19,843 | ||||||||||
| Inventories | (206,252) | 186,242 | 28,146 | 11,224 | 961,422 | 145,294 | ||||||||||
| Amounts due from related parties | 1,181,694 | 1,938,481 | 292,950 | 3,435,718 | 1,522,123 | 230,029 | ||||||||||
| Other current assets | 970,740 | (19,562,202) | (2,956,310) | (1,819,059) | (26,365,951) | (3,984,518) | ||||||||||
| Other assets | - | - | - | 1,728,263 | - | - | ||||||||||
| Accounts payable | 800,856 | (4,359,732) | (658,858) | 2,115,442 | 337,208 | 50,960 | ||||||||||
| Amounts due to related parties | (157,557) | 154,006 | 23,274 | 2,538,414 | 480,702 | 72,645 | ||||||||||
| Salary and welfare payable | 2,140,122 | 27,794 | 4,200 | (678,679) | (1,651,291) | (249,549) | ||||||||||
| Deferred revenue | (2,225,451) | 21,657,037 | 3,272,889 | 14,667,526 | 36,565,954 | 5,525,979 | ||||||||||
| Advance from customers | 8,312,326 | 8,017,444 | 1,211,625 | 11,776,047 | (471,039) | (71,185) | ||||||||||
| Accrued expenses and other current liabilities | 3,252,222 | (31,297,653) | (4,729,814) | 15,533,168 | (27,214,366) | (4,112,733) | ||||||||||
| Income tax payable | (42,196,868) | (56,273,754) | (8,504,293) | (27,193,374) | (36,539,914) | (5,522,043) | ||||||||||
| Unrecognized tax benefits | 15,194,271 | 43,190,003 | 6,527,029 | 14,744,258 | 46,941,155 | 7,093,917 | ||||||||||
| Deferred rent | (5,683,343) | (1,028,699) | (155,461) | (10,891,391) | (2,043,147) | (308,768) | ||||||||||
| Other long-term liabilities | 8,865,201 | 7,701,591 | 1,163,892 | (172,893) | 9,474,980 | 1,431,893 | ||||||||||
| Deferred taxes | 5,754,724 | (7,506,008) | (1,134,335) | 5,790,416 | (11,620,992) | (1,756,206) | ||||||||||
| Net cash provided by operating activities | 70,182,234 | 83,377,940 | 12,600,374 | 173,730,317 |
199,418,969 |
30,136,915 | ||||||||||
| Investing activities: | ||||||||||||||||
| Purchases of property and equipment | (2,350,676) | (54,676,146) | (8,262,856) | (7,110,402) | (113,008,255) | (17,078,215) | ||||||||||
| Purchases of intangible assets | - | (900,000) | (136,011) | - | (900,000) | (136,011) | ||||||||||
| Purchases of short-term investments | - | (275,105,052) | (41,574,867) | - | (791,666,641) | (119,639,516) | ||||||||||
| Proceeds from short-term investments | - | 234,004 | 35,364 | - | 745,234,004 | 112,622,449 | ||||||||||
| Proceeds from disposal of property and equipment | - | - | - | 1,600,000 | - | - | ||||||||||
| Purchases of trading securities | (5,886,700) | - | - | (37,029,398) | (4,795,838) | (724,764) | ||||||||||
| Proceeds from disposal of trading securities | 10,667,510 | 7,604,063 | 1,149,153 | 31,396,866 | 18,871,973 | 2,852,001 | ||||||||||
| Loan to a related party | (3,100,000) | - | - | (4,100,000) | - | - | ||||||||||
| Loan to franchisees | - | (17,800,000) | (2,690,000) | (3,500,000) | (37,800,000) | (5,712,472) | ||||||||||
| Repayment from a franchisee | - | 3,340,000 | 504,753 | - | 6,840,000 | 1,033,685 | ||||||||||
| Net cash (used in) provided by investing activities | (669,866) | (337,303,131) | (50,974,464) | (18,742,934) |
(177,224,757) |
(26,782,843) | ||||||||||
| Financing activities: | ||||||||||||||||
| Distribution to the shareholders | (9,651,158) | (160,840,918) | (24,306,859) | (9,651,158) | (200,532,021) | (30,305,123) | ||||||||||
| Income tax paid related to the above distribution | - | - | - | - |
(3,000,000) |
(453,372) | ||||||||||
| Proceeds from short-term borrowings | 60,000,000 | - | - | 60,000,000 | - | - | ||||||||||
| Changes in restricted cash | 90,000,000 | - | - | (785,000,000) | - | - | ||||||||||
| Proceeds from IPO, net of capitalized expenses | - | - | - |
833,202,245 |
125,916,526 | |||||||||||
| Payment for initial public offering costs | - | (25,087,646) | (3,791,336) | - |
(25,087,646) |
(3,791,336) | ||||||||||
| Net cash provided by (used in) financing activities | 140,348,842 | (185,928,564) | (28,098,195) | (734,651,158) |
604,582,578 |
91,366,695 | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (452,775) | 1,509,941 | 228,188 | (681,516) |
614,853 |
92,919 | ||||||||||
| Net increase (decrease) in cash and cash equivalents | 209,408,435 | (438,343,814) | (66,244,097) | (580,345,291) |
627,391,643 |
94,813,686 | ||||||||||
| Cash and cash equivalents at the beginning of the period | 107,029,209 | 1,227,699,122 | 185,534,316 | 896,782,935 |
161,963,665 |
24,476,533 | ||||||||||
| Cash and cash equivalents at the end of the period | 316,437,644 | 789,355,308 | 119,290,219 | 316,437,644 |
789,355,308 |
119,290,219 | ||||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||||||
| Income taxes paid | (55,742,089) | (48,194,805) | (7,283,373) | (65,025,390) | (62,794,370) | (9,489,712) | ||||||||||
| Interest paid | (261,294) | - | - | (261,294) | - | - | ||||||||||
| GreenTree Hospitality Group Ltd. | |||||||
| Unaudited Reconciliation of GAAP and Non-GAAP Results | |||||||
| Quarter Ended | Six Months Ended | ||||||
| June 30, 2017 | June 30, 2018 | June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2018 | ||
| RMB | RMB | USD | RMB | RMB | USD | ||
| Net income | 108,688,214 | 97,239,028 | 14,695,112 | 183,196,245 | 187,408,370 | 28,321,830 | |
| Deduct: | |||||||
| Other operating income | 4,722,477 | 12,242,088 | 1,850,069 | 5,066,976 | 26,067,489 | 3,939,413 | |
| Interest income and other, net | 5,935,863 | 11,420,031 | 1,725,836 | 12,670,874 | 16,123,893 | 2,436,701 | |
| Gains from trading securities | 24,385,333 | - | - | 35,967,385 | - | - | |
| Share of gain in equity investees, net of tax | 52,078 | - | - | 52,078 | - | - | |
| Add: | |||||||
| Other operating expenses | 295,431 | 35,330 | 5,339 | 1,148,166 | 178,592 | 26,989 | |
| Income tax expense | 34,494,218 | 31,356,198 | 4,738,662 | 58,331,623 | 61,574,619 | 9,305,378 | |
| Share of loss in equity investees, net of tax | - | 182,988 | 27,654 | 565,525 | 1,090,024 | 164,728 | |
| Interest expense | 261,294 | - | - | 261,294 | - | - | |
| Share-based compensation | - | 3,586,930 | 542,070 | - | 3,746,769 | 566,225 | |
| Depreciation and amortization | 6,115,165 | 4,557,247 | 688,708 | 12,674,080 | 9,951,749 | 1,503,944 | |
| Losses from trading securities | - | 25,862,935 | 3,908,500 | - | 31,036,562 | 4,690,357 | |
| Other expense, net | 28,852 | - | - | 69,818 | - | - | |
| Adjusted EBITDA (Non-GAAP) | 114,787,423 | 139,158,537 | 21,030,140 | 202,489,438 | 252,795,303 | 38,203,337 | |
| Quarter Ended | Six Months Ended | ||||||
| June 30,2017 | June 30,2018 | June 30,2018 | June 30,2017 | June 30,2018 | June 30,2018 | ||
| RMB | RMB | USD | RMB | RMB | USD | ||
| Net income | 108,688,214 | 97,239,028 | 14,695,112 |
183,196,245 |
187,408,370 |
28,321,830 | |
| Deduct: | |||||||
| Government subsidies (net of 25% tax) | 1,493,208 | 76,774 | 11,602 | 1,493,246 | 10,312,776 | 1,558,504 | |
| Gains from trading securities (net of 25% tax) | 18,289,000 | - | - | 26,975,539 | - | - | |
| Reimbursement related to the ADS program | - | 9,271,648 | 1,401,165 | - | 9,271,648 | 1,401,165 | |
| Add: | |||||||
| Share-based compensation | - | 3,586,930 | 542,070 | - | 3,746,769 | 566,225 | |
| Losses from trading securities (net of 25% tax) | - | 19,397,201 | 2,931,375 | - | 23,277,421 | 3,517,768 | |
| Other expense (net of 25% tax) | 21,639 | - | - | 52,364 | - | - | |
| Core net income (Non-GAAP) | 88,927,645 | 110,874,737 | 16,755,790 | 154,779,824 | 194,848,136 | 29,446,154 | |
| Core net income per ADS (Non-GAAP) | |||||||
| Class A ordinary share-basic and diluted | 0.97 | 1.09 | 0.16 | 1.69 | 2.01 | 0.30 | |
| Class B ordinary share-basic and diluted | 0.97 | 1.09 | 0.16 | 1.69 | 2.01 | 0.30 | |
Operational Data
| As of June 30,2017 | As of June 30,2018 | |
| Total hotels in operation: | 2,035 | 2,434 |
| Leased and owned hotels | 27 | 26 |
| Franchised hotels | 2,008 | 2,408 |
| Total hotel rooms in operation | 173,836 | 201,275 |
| Leased and owned hotels | 3,351 | 3,358 |
| Franchised hotels | 170,485 | 197,917 |
| Number of cities | 242 | 267 |
| Quarter Ended | ||
| June 30,2017 | June 30,2018 | |
| Occupancy rate (as a percentage) | ||
| Leased and owned hotels | 72.1% | 70.7% |
| Franchised hotels | 83.5% | 82.9% |
| Blended | 83.2% | 82.6% |
| Average daily room rate (in RMB) | ||
| Leased and owned hotels | 182 | 201 |
| Franchised hotels | 155 | 163 |
| Blended | 156 | 164 |
| RevPAR (in RMB) | ||
| Leased and owned hotels | 131 | 142 |
| Franchised hotels | 129 | 135 |
| Blended | 130 | 136 |
| Number of Hotels in Operation | Number of Hotel Rooms in Operation | ||||||
| As of June 30, 2017 | As of June 30, 2018 | As of June 30, 2017 | As of June 30, 2018 | ||||
| Economy hotels | 172 | 312 | 9,964 | 16,850 | |||
| Vatica | 83 | 111 | 6,224 | 8,295 | |||
| Shell | 89 | 201 | 3,740 | 8,555 | |||
| Mid-scale | 1,829 | 2,062 | 159,837 | 177,665 | |||
| GreenTree Inn | 1,604 | 1,785 | 141,553 | 155,470 | |||
| GreenTree Alliance | 225 | 277 | 18,284 | 22,195 | |||
| Business to Mid-to-up-scale | 34 | 60 | 4,035 | 6,760 | |||
| GreenTree Eastern | 34 | 59 | 4,035 | 6,650 | |||
| VX | 0 | 1 | 0 | 110 | |||
| Total | 2,035 | 2,434 | 173,836 | 201,275 | |||