- The Company's operations and performance were severely impacted by the outbreak of COVID-19 that resulted in the lock-down of certain cities, business closures, and restrictions on travel imposed by governments around China.
- A total of 3,998 hotels with 292,716 hotel rooms were in operation as of March 31, 2020, compared to 3,957 hotels and 290,026 hotel rooms as of December 31, 2019.
- Total revenues decreased 33.1% year-over-year to RMB157.4 million (US$22.2 million)[1].
- Adjusted EBITDA (non-GAAP) decreased 64.5% year-over-year to RMB47.6 million (US$6.7 million)[1]
- Net income decreased 110.6% year-over-year to net loss of RMB14.1 million (US$2.0 million)[1].
- Core net income (non-GAAP) decreased 69.9% year-over-year to RMB27.7 million (US$3.9 million)[1].
- Net loss per ADS (basic and diluted) was RMB0.11 (US$0.02)[1].
- Core net income per ADS (basic and diluted) (non-GAAP) of the Company was RMB0.27 (US$0.04)[1].
GreenTree Hospitality Group Ltd. (NYSE: GHG) last week announced its unaudited financial results for the first quarter ended March 31, 2020.
First Quarter 2020 Operational Highlights
- As of March 31, 2020, the Company had 35 leased-and-operated ("L&O") hotels and 3,963 franchised-and-managed ("F&M") hotels in operation in 342 cities across China, compared to 30 L&O hotels and 2,799 F&M hotels in operation in 292 cities as of March 31, 2019. The geographic coverage increased by 17.1% year over year.
- During the quarter, the Company opened 62 hotels, a decrease of 40 comparing to 102 hotels in the first quarter of 2019. Among the hotels opened, 7 were in the mid-to-up-scale segment, 37 in the mid-scale segment, and 18 in the economy segment. Geographically speaking, 3 hotels were in Tier 1 cities[2], 13 in Tier 2 cities and the remaining 46 in Tier 3 and smaller cities in China.
The Company closed 21 hotels, 5 due to brand upgrade, and 8 due to their non-compliance with the Company's brand and operating standards. The remaining 8 were closed for property related issues. The Company added a net opening of 41 hotels to its portfolio.
- As of March 31, 2020, the Company had a pipeline of 1,025 hotels contracted for or under development, among which 56 hotels were in the luxury hotel segment, 200 in the mid-to-up-scale segment, 403 in the mid-scale segment, and 366 in the economy segment.
- The average daily room rate, or ADR, for all hotels in operation, was RMB150, a decrease of 7.8% year-over-year.
- The occupancy rate, or OCC for all hotels in operation was 47.3%, compared with 78.1% in the first quarter of 2019.
- The revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR by its occupancy rate, was RMB71, representing a 44.1% year-over-year decrease.
- As of March 31, 2020, the Company's loyalty program had more than 46 million individual members and over 1,520,000 corporate members, compared to approximately 44 million and over 1,510,000 corporate members as of December 31, 2019. The Company had approximately 93.6% of room nights sold directly.
| [1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB7.0808 on March 31, 2020 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20200406/ |
| [2] Tier 1 Cities refers to Beijing, Shanghai, Shenzhen and Guangzhou; Tier 2 Cities refers to the 32 major cities, other than Tier 1 Cities, 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. |
"The outbreak of COVID-19 severely impacted our business in the first quarter as a result of the lock-down of certain cities, business closures, and restrictions on travel imposed by governments around China." said Mr. Alex Xu, Chairman and Chief Executive Officer of GreenTree. "However, it also presented new opportunities that we were able to capture successfully thanks to the extreme dedication of our staff and franchisees who worked relentlessly to guarantee the safety and health of our guests, including medical staff, volunteers and travelers that needed to be quarantined. Our overall performance was better than the average performance across the hospitality industry in China. Our occupancy rate has rebounded and exceed 65% on average in the second half of May, from a low of 21.5% at the end of January.
The Board and our entire management team would like to extend our heartfelt thanks to all our franchisees, employees, guest and medical professionals, police, firefighters, and community leaders who have helped us weather this unprecedented crisis and resume our business rapidly.
As we have emerged from the crisis and as the Chinese economic recovery strengthens, we are well positioned to deliver another year of outstanding services to our guests, strong performance to our franchisees, and sustainable growth to our shareholders."
| First Quarter of 2020 Financial Results | ||||||
| Quarter Ended | ||||||
| March 31, 2019 | March 31, 2020 | March 31, 2020 | ||||
| RMB | RMB | US$ | ||||
| Revenues | ||||||
| Leased-and-operated hotels | 51,833,041 | 33,800,144 | 4,773,492 | |||
| Franchised-and-managed hotels | 183,460,067 | 123,595,847 | 17,455,068 | |||
| Total revenues | 235,293,108 | 157,395,991 | 22,228,560 | |||
Total revenues were RMB157.4 million (US$22.2 million)[1], representing a 33.1% year-over-year decrease. The decrease was primarily due to the impact of COVID-19, which resulted in declined RevPAR of L&O hotels and F&M hotels, temporary closure of hotels in certain regions according to local governments' requirements, delay in new hotel openings, as well as partial reduction and extension of sublease income. Additionally from February 1, 2020 to March 31, 2020, we reduced franchise management fees and central reservation system ("CRS") usage fees, by 50% to support our franchisees.
- Total revenues from leased-and-operated hotels were RMB33.8 million (US$4.8 million)[1], representing a 34.8% year-over-year decrease. The decrease was primarily due to RevPAR decrease of 53.6%, temporary closure of certain hotels, and partial reduction and extension of sublease income, and partially offset by the revenue contributed by 6 L&O hotels of the Urban Hotel Group ("Urban").
- Total revenues from franchised-and-managed hotels for the first quarter of 2020 were RMB123.6 million (US$17.5 million)[1], representing a 32.6% year-over-year decrease. Initial franchise fees increased by 2.4% year-over-year, mainly attributable to the gross opening of 62 hotels and contribution from historical amortization under ASC606, which was adopted since the first quarter of 2019. The 35.2% decrease from the first quarter of 2019 in recurring franchisee management fees and others was primarily due to the delay in new hotel openings, RevPAR decrease of 43.8%, as well as the abovementioned reduction by 50% of franchise management fees and CRS usage fees.
| Quarter Ended | |||||
| March 31, 2019 | March 31, 2020 | March 31, 2020 | |||
| RMB | RMB | US$ | |||
| Initial franchise fee | 12,752,949 | 13,052,832 | 1,843,412 | ||
| Recurring franchise management fee and others | 170,707,118 | 110,543,015 | 15,611,656 | ||
| Revenues from franchised-and- managed hotels | 183,460,067 | 123,595,847 | 17,455,068 | ||
| Total operating costs and expenses | |||||
| Quarter Ended | |||||
| March 31, 2019 | March 31, 2020 | March 31, 2020 | |||
| RMB | RMB | US$ | |||
| Operating costs and expenses | |||||
| Hotel operating costs | 79,999,844 | 89,763,273 | 12,676,996 | ||
| Selling and marketing expenses | 24,676,102 | 17,841,322 | 2,519,676 | ||
| General and administrative expenses | 25,732,486 | 28,745,571 | 4,059,650 | ||
| Other operating expenses | 42,624 | 1,157,149 | 163,421 | ||
| Total operating costs and expenses | 130,451,056 | 137,507,315 | 19,419,743 | ||
Hotel operating costs were RMB89.8 million (US$12.7 million)[1], representing a 12.2% increase from the first quarter of 2019. The increase was mainly attributable to the higher depreciation and amortization, and the consolidation of operation costs of Argyle Hotel Management Group (Australia) Pty Ltd ("Argyle") and Urban. Excluding the impact from newly consolidated entities, hotel operating costs for this quarter decreased 3.9%, which was primarily due to a decrease in salaries of regional general managers, decreases in utilities, consumable, food and beverage, that resulted from the declined occupancy rate.
| Quarter Ended | |||||
| March 31, | March 31, | March 31, | |||
| 2019 | 2020 | 2020 | |||
| RMB | RMB | US$ | |||
| Rental | 20,608,265 | 27,102,982 | 3,827,672 | ||
| Utilities | 6,154,563 | 4,420,190 | 624,250 | ||
| Personnel cost | 8,794,274 | 10,230,645 | 1,444,843 | ||
| Depreciation and amortization | 6,524,205 | 11,338,835 | 1,601,349 | ||
| Consumable, food and beverage | 6,837,151 | 8,750,868 | 1,235,859 | ||
| Costs of general managers of franchised-and- managed hotels | 22,444,643 | 20,642,648 | 2,915,299 | ||
| Other costs of franchised-and-managed hotels | 5,686,583 | 4,503,060 | 635,954 | ||
| Others | 2,950,160 | 2,774,045 | 391,770 | ||
| Hotel Operating Costs | 79,999,844 | 89,763,273 | 12,676,996 | ||
Selling and marketing expenses were RMB17.8 million (US$2.5 million)[1], representing a 27.7% year-over-year decrease. The decrease was mainly attributable to decreases in cost for advertising, travelling and meals, because of measures taken to control the spread of COVID-19, including the lock-down of certain cities, business closures, and restrictions on travel. Excluding Argyle's and Urban's expenses, selling and marketing expenses in this quarter decreased 34.0%.
General and administrative expenses were RMB28.7 million (US$4.1 million)[1], representing a 11.7% year-over-year increase. The increase was primarily attributable to increased legal and accounting consulting fees, and the consolidation of expenses from Argyle and Urban. Excluding Argyle and Urban, G&A expenses decreased by 15.5%, mainly due to the decrease in staff related costs and compensation expenses.
Gross profit was RMB67.6 million (US$9.6 million)[1], representing a decrease of 56.4% from the first quarter of 2019. Gross margin was 43.0%, compared to 66.0% a year ago. The decrease was primarily due to decreased revenues as a result of COVID-19.
Income from operations totaled RMB37.2 million (US$5.3 million)[1], representing a year-over-year decrease of 66.7%. The decrease was mainly due to decreased revenues resulting from lower RevPAR, temporary closure of certain hotels, and delays in new hotel openings. Operating margin, defined as income from operations as percentage of total revenues, was 23.6%, compared to 47.5% a year ago.
Adjusted EBITDA (non-GAAP) was RMB47.6 million (US$6.7 million)[1], representing a year-over-year decrease of 64.5%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, was 30.2%, compared to 56.9% in the first quarter of 2019.
Net loss was RMB14.1 million (US$2.0 million)[1], representing a year-over-year decrease from net income of 110.6%. Net margin was -9.0%, compared to 56.9% a year ago. The year-over-year decrease was primarily due to revenue decrease and losses from investments in equity securities, partially offset by interest income.
Core net income (non-GAAP) was RMB27.7 million (US$3.9 million)[1], representing a year-over-year decrease of 69.9%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, was 17.6%, compared to 39.2% one year ago.
Loss per ADS (basic and diluted) was RMB0.11 (US$0.02)[1], down from earnings per ADS of RMB1.33 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB0.27 (US$0.04) [1], down from RMB0.91 in the first quarter of 2019.
Cash flow. Operating cash outflow was RMB48.4 million (US$6.8 million)[1] as a result of an operational net income loss because of COVID-19. Investing cash inflow was RMB155.0 million (US$21.9 million)[1], which was primarily attributable to proceeds from short-term investments and partially offset by loan to franchisees. Financing cash inflow was RMB10.4 million (US$1.47 million)[1].
Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposit. As of March 31, 2020, the Company had a total balance of cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,613.9 million (US$227.9 million)[1], as compared to RMB1,809.3 million as of December 31, 2019, primarily due to loans to franchisees, losses from investment in equity securities, and investment on upgrade decoration.
COVID-19 Update
Thanks to the Chinese Government's efforts to contain the spread of COVID-19, the outbreak has come under control in China. Since March, travel between cities has gradually returned to normal and a growing number of companies have resumed business.
Thanks to the effective policies and financial assistance from central and local governments and support measures from GreenTree, most franchisees have now resumed business operations. Occupancy rate has rebounded and exceed 65% on average in the second half of May, up substantially from the low of 21.5% on January 31, 2020.
Guidance
Due to the impact of COVID-19, the Company expects a decline in total revenues in the second quarter of 2020 of 18%-23% year-over-year, and a decline in total revenues of 10%-15% for the full year 2020, compared to 2019.
The guidance set forth above reflects the Company's current and preliminary views based on our recovery speed and may not be indicative of the final financial results for future interim periods and the full year.
About GreenTree Hospitality Group Ltd.
GreenTree Hospitality Group Ltd. (NYSE: GHG) is a leading hospitality management group in China. As of March 31, 2020, GreenTree had a total number of 3,998 hotels. In 2018, GreenTree ranked among the Top 12 worldwide in terms of number of hotels in "World's Largest Hotel Companies: HOTELS' 325", published by HOTELS magazine, and was as well the fourth largest hospitality company in China in 2018 based on the statistics issued by the China Hospitality Association.
GreenTree 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 and consistent quality of its services, signature hotel designs, broad geographic coverage and convenient locations. GreenTree has further expanded its brand portfolio into mid-to-up-scale and luxury segments through a series of strategic investments. By offering diverse brands, 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 brand portfolio that features comfort, style and value.
| GreenTree Hospitality Group Ltd. | |||||
| Unaudited Condensed Consolidated Balance Sheets | |||||
| December 31, | March 31, | March 31, | |||
| 2019 | 2020 | 2020 | |||
| RMB | RMB | US$ | |||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 319,847,701 | 436,432,446 | 61,636,036 | ||
| Short-term investment | 437,279,026 | 146,226,781 | 20,651,167 | ||
| Investments in equity securities | 207,007,926 | 181,073,060 | 25,572,401 | ||
| Accounts receivable, net of allowance for doubtful accounts | 99,701,226 | 87,660,139 | 12,379,977 | ||
| Amounts due from related parties | 31,739,731 | 30,944,889 | 4,370,253 | ||
| Prepaid rent | 18,794,665 | 14,458,999 | 2,042,001 | ||
| Inventories | 2,537,717 | 2,931,930 | 414,068 | ||
| Other current assets | 66,004,017 | 45,688,487 | 6,452,447 | ||
| Loans receivable, net | 82,312,201 | 124,652,138 | 17,604,245 | ||
| Total current assets | 1,265,224,210 | 1,070,068,869 | 151,122,595 | ||
| Non-current assets: | |||||
| Restricted cash | 22,312,522 | 22,169,900 | 3,130,988 | ||
| Long-term time deposits | 560,000,000 | 590,000,000 | 83,323,918 | ||
| Loan receivable, net | 121,563,742 | 164,938,342 | 23,293,744 | ||
| Property and equipment, net | 614,936,505 | 626,620,753 | 88,495,757 | ||
| Intangible assets, net | 496,280,316 | 494,253,797 | 69,801,971 | ||
| Goodwill | 100,078,236 | 100,078,236 | 14,133,747 | ||
| Long-term investments | 398,637,701 | 374,207,313 | 52,848,169 | ||
| Other assets | 76,957,992 | 82,640,300 | 11,671,040 | ||
| Deferred tax assets | 160,488,193 | 169,881,712 | 23,991,880 | ||
| TOTAL ASSETS | 3,816,479,417 | 3,694,859,222 | 521,813,809 | ||
| LIABILITIES AND EQUITY | |||||
| Current liabilities: | |||||
| Short-term bank loans | 60,000,000 | 70,000,000 | 9,885,889 | ||
| Accounts payable | 15,296,042 | 16,582,188 | 2,341,852 | ||
| Advance from customers | 40,105,627 | 37,531,426 | 5,300,450 | ||
| Amounts due to related parties | 3,518,031 | 1,500,008 | 211,842 | ||
| Salary and welfare payable | 42,650,527 | 40,633,276 | 5,738,515 | ||
| Deferred rent | 5,179,664 | 5,337,577 | 753,810 | ||
| Deferred revenue | 231,925,272 | 225,381,221 | 31,829,909 | ||
| Accrued expenses and other current liabilities | 302,448,361 | 199,959,098 | 28,239,620 | ||
| Income tax payable | 93,909,177 | 77,757,910 | 10,981,514 | ||
| Total current liabilities | 795,032,701 | 674,682,704 | 95,283,401 | ||
| Deferred rent | 17,821,686 | 22,725,535 | 3,209,459 | ||
| Deferred revenue | 410,807,248 | 386,432,782 | 54,574,735 | ||
| Other long-term liabilities | 118,112,511 | 131,107,040 | 18,515,851 | ||
| Deferred tax liabilities | 195,303,547 | 194,729,437 | 27,501,050 | ||
| Unrecognized tax benefits | 261,641,717 | 275,926,946 | 38,968,329 | ||
| TOTAL LIABILITIES | 1,798,719,410 | 1,685,604,444 | 238,052,825 | ||
| Shareholders' equity: | |||||
| Class A ordinary shares | 219,526,699 | 222,587,070 | 31,435,300 | ||
| Class B ordinary shares | 115,534,210 | 115,534,210 | 16,316,548 | ||
| Additional paid-in capital | 1,152,108,217 | 1,149,280,404 | 162,309,401 | ||
| Retained earnings | 308,698,533 | 296,852,879 | 41,923,636 | ||
| Accumulated other comprehensive income | 65,300,854 | 70,298,087 | 9,927,985 | ||
| Total GreenTree Hospitality Group Ltd. shareholders' equity | 1,861,168,513 | 1,854,552,650 | 261,912,870 | ||
| Non-controlling interests | 156,591,494 | 154,702,128 | 21,848,114 | ||
| Total shareholders' equity | 2,017,760,007 | 2,009,254,778 | 283,760,984 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 3,816,479,417 | 3,694,859,222 | 521,813,809 | ||
| GreenTree Hospitality Group Ltd. | |||||
| Unaudited Condensed Consolidated Statements of Comprehensive Income | |||||
| Quarter Ended | |||||
| March 31, 2019 | March 31, 2020 | March 31, 2020 | |||
| RMB | RMB | US$ | |||
| Revenues | |||||
| Leased-and-operated hotels | 51,833,041 | 33,800,144 | 4,773,492 | ||
| Franchised-and-managed hotels | 183,460,067 | 123,595,847 | 17,455,068 | ||
| Total revenues | 235,293,108 | 157,395,991 | 22,228,560 | ||
| Operating costs and expenses | |||||
| Hotel operating costs | (79,999,844) | (89,763,273) | (12,676,996) | ||
| Selling and marketing expenses | (24,676,102) | (17,841,322) | (2,519,676) | ||
| General and administrative expenses | (25,732,486) | (28,745,571) | (4,059,650) | ||
| Other operating expenses | (42,624) | (1,157,149) | (163,421) | ||
| Total operating costs and expenses | (130,451,056) | (137,507,315) | (19,419,743) | ||
| Other operating income | 6,906,453 | 17,330,931 | 2,447,595 | ||
| Income from operations | 111,748,505 | 37,219,607 | 5,256,412 | ||
| Interest income and other, net | 16,469,011 | 10,613,260 | 1,498,879 | ||
| Interest expense | (685,125) | (1,010,255) | (142,675) | ||
| Gains/(losses) from investment in equity securities | 59,934,470 | (55,174,918) | (7,792,187) | ||
| Other income, net | 829,781 | - | - | ||
| Income/(loss) before income taxes | 188,296,642 | (8,352,306) | (1,179,571) | ||
| Income tax expense | (54,165,392) | (6,177,560) | (872,438) | ||
| Income/(loss) before share of (losses)/gains in equity investees | 134,131,250 | (14,529,866) | (2,052,009) | ||
| Share of (losses)/gains in equity investees, net of tax | (173,231) | 394,844 | 55,763 | ||
| Net income/(loss) | 133,958,019 | (14,135,022) | (1,996,246) | ||
| Net loss attributable to non-controlling interests | 955,533 | 2,289,368 | 323,320 | ||
| Net income/(loss) attributable to ordinary shareholders | 134,913,552 | (11,845,654) | (1,672,926) | ||
| Net earnings/(losses) per share | |||||
| Class A ordinary share-basic and diluted | 1.33 | (0.11) | (0.02) | ||
| Class B ordinary share-basic and diluted | 1.33 | (0.11) | (0.02) | ||
| Net earnings/(losses) per ADS | |||||
| Class A ordinary share-basic and diluted | 1.33 | (0.11) | (0.02) | ||
| Class B ordinary share-basic and diluted | 1.33 | (0.11) | (0.02) | ||
| Weighted average shares outstanding | |||||
| Class A ordinary share-basic and diluted | 67,015,625 | 68,286,954 | 68,286,954 | ||
| Class B ordinary share-basic and diluted | 34,762,909 | 34,762,909 | 34,762,909 | ||
| Other comprehensive (loss)/income, net of tax | |||||
| Foreign currency translation adjustments | (14,802,518) | 4,997,233 | 705,744 | ||
| Comprehensive income/(loss), net of tax | 119,155,501 | (9,137,789) | (1,290,502) | ||
| Comprehensive loss attributable to non-controlling interests | 955,533 | 2,289,368 | 323,320 | ||
| Comprehensive income/(loss) attributable to ordinary shareholders | 120,111,034 | (6,848,421) | (967,182) | ||
| GreenTree Hospitality Group Ltd. | |||||
| Unaudited Condensed Consolidated Statements of Cash Flows | |||||
| Quarter Ended | |||||
| March 31, 2019 | March 31, 2020 | March 31, 2020 | |||
| RMB | RMB | US$ | |||
| Operating activities: | |||||
| Net income/(loss) | 133,958,019 | (14,135,022) | (1,996,246) | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Depreciation and amortization | 7,670,772 | 15,666,645 | 2,212,553 | ||
| Share of losses/(gains) in equity method investments | 173,231 | (394,844) | (55,763) | ||
| Interest income | (7,961,638) | (2,744,441) | (387,589) | ||
| Bad debt expense | 891,369 | 5,919,636 | 836,012 | ||
| (Gains)/losses from investments in equity securities | (59,934,470) | 55,174,917 | 7,792,187 | ||
| Foreign exchange (gains)/losses | (204,117) | 1,157,432 | 163,461 | ||
| Share-based compensation | 4,849,451 | 232,558 | 32,843 | ||
| Income tax expenses related to dividend distribution or retained profits | 3,844,492 | 4,000,000 | 564,908 | ||
| Changes in operating assets and liabilities: | |||||
| Accounts receivable | (18,018,161) | 6,121,451 | 864,514 | ||
| Prepaid rent | 711,581 | 4,335,665 | 612,314 | ||
| Inventories | 1,448,883 | (394,213) | (55,674) | ||
| Amounts due from related parties | 3,600 | 794,843 | 112,253 | ||
| Other current assets | 7,196,789 | 20,315,530 | 2,869,101 | ||
| Other assets | (4,689,629) | (5,682,307) | (802,495) | ||
| Accounts payable | 4,198,665 | 1,286,146 | 181,639 | ||
| Amounts due to related parties | (66,764) | (2,018,023) | (284,999) | ||
| Salary and welfare payable | (7,363,593) | (2,017,251) | (284,890) | ||
| Deferred revenue | (4,393,076) | (30,918,517) | (4,366,529) | ||
| Advance from customers | (1,670,782) | (2,574,201) | (363,547) | ||
| Accrued expenses and other current liabilities | 25,592,668 | (104,735,404) | (14,791,465) | ||
| Income tax payable | 23,883,063 | (16,151,267) | (2,280,995) | ||
| Unrecognized tax benefits | 6,046,751 | 14,285,229 | 2,017,460 | ||
| Deferred rent | (292,571) | 5,061,762 | 714,857 | ||
| Other long-term liabilities | 1,047,726 | 12,994,529 | 1,835,178 | ||
| Deferred taxes | 5,270,154 | (13,967,629) | (1,972,606) | ||
| Net cash provided by (used in) operating activities | 122,192,413 | (48,386,776) | (6,833,518) | ||
| Investing activities: | |||||
| Purchases of property and equipment | (9,059,949) | (23,078,232) | (3,259,269) | ||
| Proceeds from disposal of property and equipment | 300,000 | - | - | ||
| Acquisitions, net of cash received | (10,000,000) | - | - | ||
| Purchases of short-term investments | (182,229,182) | (101,270,000) | (14,302,056) | ||
| Proceeds from short-term investments | 716,055,975 | 395,066,686 | 55,794,075 | ||
| Increase in long-term investments | (440,000,000) | (30,000,000) | (4,236,809) | ||
| Purchases of investments in equity securities | (1,976,351) | - | - | ||
| Purchases of long term investments | (249,464,401) | - | - | ||
| Proceeds from disposal of equity securities | 108,603,914 | - | - | ||
| Loan to related parties | (10,000,000) | (165,516,500) | (23,375,395) | ||
| Repayment from a related party | - | 165,516,500 | 23,375,395 | ||
| Loan to third parties | (15,940,000) | (2,000,000) | (282,454) | ||
| Loan to franchisees | (18,130,000) | (98,730,000) | (13,943,340) | ||
| Repayment from a franchisee | 5,293,397 | 15,015,463 | 2,120,588 | ||
| Net cash (used in) provided by investing activities | (106,546,597) | 155,003,917 | 21,890,735 | ||
| Financing activities: | |||||
| Distribution to the shareholders | (208,025,814) | - | - | ||
| Proceeds from short-term borrowings | - | 10,000,000 | 1,412,270 | ||
| Proceeds from non controlling interests | 10,390,000 | 400,000 | 56,491 | ||
| Net cash (used in) provided by financing activities | (197,635,814) | 10,400,000 | 1,468,761 | ||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | (11,689,960) | (575,018) | (81,209) | ||
| Net (decrease) increase in cash and cash equivalents and restricted cash | (193,679,958) | 116,442,123 | 16,444,769 | ||
| Cash and cash equivalents and restricted cash at the beginning of the period | 1,267,325,785 | 342,160,223 | 48,322,255 | ||
| Cash and cash equivalents and restricted cash at the end of the period | 1,073,645,827 | 458,602,346 | 64,767,024 | ||
| GreenTree Hospitality Group Ltd. | |||||
| Unaudited Reconciliation of GAAP and Non-GAAP Results | |||||
| Quarter Ended | |||||
| March 31, 2019 | March 31, 2020 | March 31, 2020 | |||
| RMB | RMB | US$ | |||
| Net income/(loss) | 133,958,019 | (14,135,022) | (1,996,246) | ||
| Deduct: | |||||
| Other operating income | 6,906,453 | 17,330,931 | 2,447,595 | ||
| Gains from investment in equity securities | 59,934,470 | - | - | ||
| Share of gain in equity investees, net of tax | - | 394,844 | 55,763 | ||
| Other income, net | 829,781 | - | - | ||
| Add: | |||||
| Other operating expenses | 42,624 | 1,157,149 | 163,421 | ||
| Income tax expense | 54,165,392 | 6,177,560 | 872,438 | ||
| Share of loss in equity investees, net of tax | 173,231 | - | - | ||
| Interest expense | 685,125 | 1,010,255 | 142,675 | ||
| Share-based compensation | 4,849,451 | 232,558 | 32,843 | ||
| Depreciation and amortization | 7,670,772 | 15,666,645 | 2,212,553 | ||
| Losses from investment in equity securities | - | 55,174,918 | 7,792,187 | ||
| Adjusted EBITDA (Non-GAAP) | 133,873,910 | 47,558,288 | 6,716,513 | ||
| Quarter Ended | |||||
| March 31, 2019 | March 31, 2020 | March 31, 2020 | |||
| RMB | RMB | US$ | |||
| Net income/(loss) | 133,958,019 | (14,135,022) | (1,996,246) | ||
| Deduct: | |||||
| Government subsidies (net of 25% tax) | 4,815,000 | 12,432,572 | 1,755,815 | ||
| Gains from investment in equity securities (net of 25% tax) | 44,950,853 | - | - | ||
| Other income (net of 25% tax) | 622,336 | - | - | ||
| Add: | |||||
| Share-based compensation | 4,849,451 | 232,558 | 32,843 | ||
| Losses from investments in equity securities | - | 50,081,189 | 7,072,815 | ||
| Income tax expenses related to dividend distribution | 3,844,492 | 4,000,000 | 564,908 | ||
| Core net income (Non-GAAP) | 92,263,773 | 27,746,153 | 3,918,505 | ||
| Core net income per ADS (Non-GAAP) | |||||
| Class A ordinary share-basic and diluted | 0.91 | 0.27 | 0.04 | ||
| Class B ordinary share-basic and diluted | 0.91 | 0.27 | 0.04 | ||
| Operational Data | ||
| As of March 31, 2019 | As of March 31, 2020 | |
| Total hotels in operation: | 2,829 | 3,998 |
| Leased-and-owned hotels | 30 | 35 |
| Franchised hotels | 2,799 | 3,963 |
| Total hotel rooms in operation | 225,757 | 292,716 |
| Leased-and-owned hotels | 3,790 | 4,349 |
| Franchised hotels | 221,967 | 288,367 |
| Number of cities | 292 | 342 |
| Quarter Ended | ||
| As of March 31, 2019 | As of March 31, 2020 | |
| Occupancy rate (as a percentage) | ||
| Leased-and-owned hotels | 59.6% | 32.7% |
| Franchised hotels | 78.4% | 47.7% |
| Blended | 78.1% | 47.3% |
| Average daily rate (in RMB) | ||
| Leased-and-owned hotels | 200 | 169 |
| Franchised hotels | 162 | 149 |
| Blended | 162 | 150 |
| RevPAR (in RMB) | ||
| Leased-and-owned hotels | 119 | 55 |
| Franchised hotels | 127 | 71 |
| Blended | 127 | 71 |
| Number of Hotels in Operation | Number of Hotel Rooms in Operation | |||
| As of March 31, 2019 | As of March 31, 2020 | As of March 31, 2019 | As of March 31, 2020 | |
| Luxury | / | 20 | / | 4,607 |
| Argyle | / | 20 | / | 4,607 |
| Mid-to-up-scale | 124 | 272 | 12,718 | 24,595 |
| GreenTree Eastern | 91 | 109 | 9,732 | 11,649 |
| Deepsleep Hotel | 1 | 2 | 62 | 161 |
| Gem | 14 | 28 | 1,337 | 2,517 |
| Gya | 5 | 26 | 445 | 2,165 |
| Vx | 13 | 22 | 1,142 | 1,766 |
| Ausotel | / | 10 | / | 1,287 |
| Urban Garden and others* | / | 75 | / | 5,050 |
| Mid-scale | 2,318 | 2,582 | 196,323 | 211,155 |
| GreenTree Inn | 1,901 | 2,027 | 164,181 | 172,385 |
| GT Alliance | 294 | 315 | 23,090 | 24,231 |
| GreenTree Apartment | 2 | 10 | 129 | 438 |
| Vatica | 121 | 122 | 8,923 | 8,937 |
| City 118 Selected and others* | / | 108 | / | 5,164 |
| Economy hotels | 387 | 1,124 | 16,716 | 52,359 |
| Shell | 387 | 555 | 16,716 | 24,215 |
| City 118 and others* | / | 569 | / | 28,144 |
| Total | 2,829 | 3,998 | 225,757 | 292,716 |
| *Others include other brands in each segment of Urban | ||||