GreenTree Hospitality Group Ltd. (NYSE: GHG), a hospitality management group in China, today announced its unaudited financial results for the second quarter of 2021.
Second Quarter of 2021 Operational Highlights
- A total of 4,542 hotels with 328,773 hotel rooms were in operation as of June 30, 2021, compared to 4,464 hotels and 323,648 hotel rooms as of March 31, 2021.
- As of June 30, 2021, the Company had 63 leased-and-operated ("L&O") hotels and 4,479 franchised-and-managed ("F&M") hotels in operation in 358 cities across China, compared to 35 L&O hotels and 4,029 F&M hotels in operation in 342 cities as of June 30, 2020. The geographic coverage increased by 4.7% year over year.
- During the quarter, the Company opened 201 hotels, an increase of 90 compared to 111 hotels in the second quarter of 2020. Two of those hotels were in the luxury segment, 43 in the mid-to-up-scale segment, 137 in the mid-scale segment, and 19 in the economy segment. Geographically speaking, 10 hotels were in Tier 1 cities [3], 49 in Tier 2 cities and the remaining 142 in Tier 3 and lower cities in China.
- As of June 30, 2021, the Company had a pipeline of 1,271 hotels contracted for or under development, among which 56 hotels were in the luxury hotel segment, 300 in the mid-to-up-scale segment, 506 in the mid-scale segment, and 409 in the economy segment.
- The average daily room rate, or ADR, for all hotels in operation, was RMB 171, an increase of 20.2% from RMB142 in the second quarter of 2020, and a 0.8% decrease compared with RMB172 in the pre-COVID-19 second quarter of 2019.
- The occupancy rate, or OCC for all hotels in operation was 78.6%, an increase of 15.2% compared with 63.4% in the second quarter of 2020, and a 2.5% decrease compared with 81.1% in the pre-COVID-19 second quarter of 2019.
- The revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR by its occupancy rate, was RMB 134, a 49.0% year-over-year increase, and a 3.8% decrease compared with RMB139 in the pre-COVID-19 second quarter of 2019.
- As of June 30, 2021, the Company's loyalty program had more than 62 million individual members and more than 1,760,000 corporate members, compared to over 59 million individual members and approximately 1,710,000 corporate members respectively as of March 31, 2021. The Company sold approximately 91.1% of room nights directly during the second quarter 2021.
"With the extensive contributions of every franchisee and members of our staff, our Q2 financials made substantial improvements," said Mr. Alex Xu, Chair and Chief Executive Officer of Greentree. "Although the new waves of COVID-19 outbreaks have somewhat dampened the recovery and had a negative impact in the affected regions, we have seen optimistic signs of recovery in domestic tourism and business travel, especially during the Tomb-Sweeping Day and the Labor Day Festival. During the quarter, we accelerated our expansion into the mid-range and high-end markets in central, southeast and southwest China. We opened 20 L&O hotels and finished the quarter. Unlike previous years, we were able to secure choice locations at economically attractive prices. All these L&O hotels are situated within popular transportation hubs, central business districts, or government centers. We believe that they will act as anchor hotels and will attract new franchisees to our Company. While improving our own services, we have also been developing a cloud-based IT infrastructure that secures internal and personal data in real time. We are the first to have moved all systems to the Cloud, and we are benefiting from higher operating efficiency and stability. Thanks to this new development, I believe that in the near future, our operations and performance will reach new heights. Once again, I would like to thank our dedicated teams, franchisees, and shareholders for their continuous support over the years.
Second Quarter of 2021 Financial Results
| Quarter Ended | |||||
| June 30, 2020 | June 30, 2021 | June 30, 2021 | |||
| RMB | RMB | US$ | |||
| Revenues | |||||
| Leased-and-operated hotels | 50,337,339 | 116,882,174 | 18,102,743 | ||
| Franchised-and-managed hotels | 158,534,095 | 217,656,936 | 33,710,767 | ||
| others | 7,118,530 | 12,517,770 | 1,938,756 | ||
| Total revenues | 215,989,964 | 347,056,880 | 53,752,266 | ||
| Six Months Ended | |||||
| June 30, 2020 | June 30, 2021 | June 30, 2021 | |||
| RMB | RMB | US$ | |||
| Revenues | |||||
| Leased-and-operated hotels | 84,137,483 | 172,995,482 | 26,793,588 | ||
| Franchised-and-managed hotels | 276,197,197 | 395,606,563 | 61,271,654 | ||
| others | 13,051,275 | 19,667,293 | 3,046,076 | ||
| Total revenues | 373,385,955 | 588,269,338 | 91,111,318 | ||
Total revenues were RMB347.1 million (US$53.8 million) [1], a 60.7% year-over-year increase. The increase was primarily due to the sustained recovery in hotel operations from the impact of COVID-19 and our newly opened L&O hotels. Compared with the pre-COVID-19 second quarter of 2019, total revenues increased by 26.2%. Total revenues for the first half of 2021 were RMB 588.3 million (US$91.1 million) [1], representing a 57.5% year-over-year increase.
Total revenues from leased-and-operated hotels were RMB116.9 million (US$18.1 million) [1], a 132.2% year-over-year increase. The increase was primarily due to the 98.7% year-over-year increase in L&O hotels' RevPAR and revenues from the 30 L&O hotels opened since the third quarter of 2020. The revenue increase was partially offset by the closure of 2 L&O hotels over the same period. Total revenues from L&O hotels for the first half of 2021 were RMB173.0 million (US$26.8 million) [1], representing a 105.6% year-over-year increase.
Total revenues from franchised-and-managed hotels were RMB217.7 million (US$33.7 million) [1], a 37.3% year-over-year increase. Initial franchise fees increased by 47.3% year-over-year, mainly attributable to the gross opening of 181 F&M hotels and the closed F&M hotels. Recurring franchisee management fees and others increased 36.4% year-over-year primarily due to the 47.9% increase in RevPAR and the 11.2% increase in the number of F&M hotels, and was offset by the fee waiver to franchisees related to newly acquired hotels. Total revenues from F&M hotels for the first half of 2021 were RMB395.6 million (US$61.3 million) [1], representing a 43.2% year-over-year increase.
| Quarter Ended | |||||
| June 30, 2020 | June 30, 2021 | June 30, 2021 | |||
| RMB | RMB | US$ | |||
| Initial franchise fee | 13,313,072 | 19,613,749 | 3,037,783 | ||
| Recurring franchise management fee and others | 145,221,023 | 198,043,187 | 30,672,984 | ||
| Revenues from franchised-and-managed hotels | 158,534,095 | 217,656,936 | 33,710,767 | ||
| Six Months Ended | |||||
| June 30, 2020 | June 30, 2021 | June 30, 2021 | |||
| RMB | RMB | US$ | |||
| Initial franchise fee | 26,365,904 | 37,592,607 | 5,822,353 | ||
| Recurring franchise management fee and others | 249,831,293 | 358,013,956 | 55,449,301 | ||
| Revenues from franchised-and-managed hotels | 276,197,197 | 395,606,563 | 61,271,654 | ||
Total operating costs and expenses
| Quarter Ended | |||||
| June 30, 2020 | June 30, 2021 | June 30, 2021 | |||
| RMB | RMB | US$ | |||
| Operating costs and expenses | |||||
| Hotel operating costs | 94,916,577 | 164,437,048 | 25,468,056 | ||
| Selling and marketing expenses | 11,999,656 | 21,703,311 | 3,361,415 | ||
| General and administrative expenses | 48,143,971 | 71,043,670 | 11,003,263 | ||
| Other operating expenses | 41,123 | 2,752,734 | 426,344 | ||
| Total operating costs and expenses | 155,101,327 | 259,936,763 | 40,259,078 | ||
| Six Months Ended | |||||
| June 30, 2020 | June 30, 2021 | June 30, 2021 | |||
| RMB | RMB | US$ | |||
| Operating costs and expenses | |||||
| Hotel operating costs | 184,679,850 | 286,667,300 | 44,399,111 | ||
| Selling and marketing expenses | 29,840,978 | 39,821,421 | 6,167,553 | ||
| General and administrative expenses | 76,889,542 | 127,001,827 | 19,670,078 | ||
| Other operating expenses | 1,198,272 | 4,146,290 | 642,178 | ||
| Total operating costs and expenses | 292,608,642 | 457,636,838 | 70,878,920 | ||
Hotel operating costs were RMB164.4 million (US$25.5 million) [1], a 73.2% increase year-over-year. The increase was mainly attributable to the opening of 23 L&O hotels since the beginning of 2021, which resulted in higher rents, higher staff headcount and compensation, higher depreciation and amortization, and higher utilities and consumables. Excluding the impact from newly opened L&O hotels in 2021, hotel operating costs increased 21.9%. For the first half of 2021, hotel operating costs were RMB286.7 million (US$44.4 million) [1], representing a 55.2% increase.
| Quarter Ended | |||||
| June 30, | June 30, | June 30, | |||
| 2020 | 2021 | 2021 | |||
| RMB | RMB | US$ | |||
| Rental | 35,806,000 | 64,073,601 | 9,923,737 | ||
| Utilities | 3,172,300 | 6,307,116 | 976,848 | ||
| Personnel cost | 9,332,835 | 17,417,652 | 2,697,651 | ||
| Depreciation and amortization | 10,588,191 | 17,515,961 | 2,712,877 | ||
| Consumable, food and beverage | 8,440,379 | 20,386,884 | 3,157,526 | ||
| Costs of general managers of franchised-and-managed hotels | 20,691,454 | 28,077,251 | 4,348,612 | ||
| Other costs of franchised-and-managed hotels | 5,476,527 | 6,906,955 | 1,069,751 | ||
| Others | 1,408,891 | 3,751,628 | 581,054 | ||
| Hotel Operating Costs | 94,916,577 | 164,437,048 | 25,468,056 | ||
| Six Months Ended | |||||
| June 30, | June 30, | June 30, | |||
| 2020 | 2021 | 2021 | |||
| RMB | RMB | US$ | |||
| Rental | 62,908,982 | 103,794,352 | 16,075,698 | ||
| Utilities | 7,592,490 | 12,203,535 | 1,890,087 | ||
| Personnel cost | 19,080,814 | 31,071,099 | 4,812,300 | ||
| Depreciation and amortization | 21,927,026 | 33,683,464 | 5,216,904 | ||
| Consumable, food and beverage | 19,026,605 | 31,726,274 | 4,913,774 | ||
| Costs of general managers of franchised-and-managed hotels | 41,334,102 | 55,395,961 | 8,579,742 | ||
| Other costs of franchised-and-managed hotels | 9,979,587 | 12,448,949 | 1,928,097 | ||
| Others | 2,830,244 | 6,343,666 | 982,509 | ||
| Hotel Operating Costs | 184,679,850 | 286,667,300 | 44,399,111 | ||
Selling and marketing expenses were RMB21.7 million (US$3.4million) [1], an 80.9% year-over-year increase. The increase was mainly attributable to higher staff headcount and compensation and the opening of 23 L&O hotels since the beginning of 2021. Excluding the impact from newly opened L&O hotels in 2021, selling and marketing expenses increased 41.1%. For the first half of 2021, selling and marketing expenses were RMB39.8 million (US$6.2 million) [1], representing a 33.4% increase.
General and administrative expenses were RMB71.0 million (US$11.0 million) [1], a 47.6% year-over-year increase. The increase was mainly attributable to the opening of 23 L&O hotels since the beginning of 2021, the increased one-time consulting fees for exploring financial or investment alternatives as well as for capital market advice. Excluding the impact from newly opened L&O hotels and one-time consulting fees, general and administrative expenses increased 0.5%. General and administrative expenses for the first half of 2021 were RMB127.0 million (US$19.7 million) [1], representing a 65.2% year-over-year increase.
Gross profit was RMB182.6 million (US$28.3 million) [1], a year-over-year increase of 50.8%. Gross margin was 52.6%, compared to 56.1% a year ago. The increase was primarily due to the recovery in our hotel RevPAR from the impact of COVID-19 but was offset by the operating loss of recorded by newly opened L&O hotels during their ramp-up period. Gross profit for the first half of 2021 was RMB301.6 million (US$46.7 million) [1], representing a 59.8% year-over-year increase.
Income from operations were RMB89.3 million (US$13.8 million) [1], a year-over-year increase of 42.5%. The increase was mainly due to the sustained recovery in RevPAR but was offset by the operating loss of recorded by newly opened L&O hotels during their ramp-up period. Operating margin was 25.7%, compared to 29.0% a year ago. Excluding the negative impact of newly opened hotels, income from operations was RMB123.0 million, a year-over-year increase of 96.4%. Income from operations for the first half of 2021 was RMB150.7 million (US$23.3 million) [1], representing a year-over-year increase of 50.9%.
Net income was RMB80.3 million (US$12.4 million) [1], compared to RMB93.7 million in the second quarter of 2020 and net margin was 23.1%.The year-over-year decrease was mainly attributable to the operating loss of recorded by newly opened L&O hotels during their ramp-up period. Excluding the impact of newly opened hotels, net income was RMB114.0 million, a year-over-year increase of 21.6%. Net income for the first half of 2021 was RMB146.3 million (US$22.7 million) [1], representing a year-over-year increase of 83.8%.
Adjusted EBITDA (non-GAAP) [2] was RMB111.2 million (US$17.2 million) [1], a year-over-year increase of 44.0%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, was 32.1%, compared to 35.8% a year ago. Adjusted EBITDA (non-GAAP) for the first half of 2021 was RMB175.2 million (US$27.1 million) [1], representing a year-over-year increase of 53.4%.
Core net income (non-GAAP) was RMB78.9 million (US$12.2 million) [1], a year-over-year increase of 5.7%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, was 22.7%, compared to 34.6% one year ago. Core net income (non-GAAP) for the first half of 2021 was RMB122.8 million (US$19.0 million) [1], representing a year-over-year increase of 31.1%.
Earnings per ADS (basic and diluted) was RMB0.79 (US$0.12) [1], down from RMB1.01 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB0.77 (US$0.12) [1], up from RMB0.72 a year ago. Earnings per ADS (basic and diluted) for the first half of 2021 was RMB1.47 (US$0.23) [1] up from RMB0.90 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB1.19 (US$0.18) [1] for the first half of 2021, an increase from RMB0.91 a year ago.
Cash flow. Operating cash inflow was RMB44.6 million (US$6.9 million) [1] as a result of income from operations. Investing cash outflow was RMB 242.5 million (US$37.6 million) [1], which was primarily attributable to acquisition costs of our L&O hotels, investments and deposits of property and equipment, loans to franchisees, and purchases of short-term investments. The investing cash outflow was partially offset by proceeds from the disposal of equity securities and proceeds from short-term investments. Financing cash inflow was RMB13.7 million (US$2.1 million). Operating cash inflow for the first half of 2021 was RMB42.9 million (US$6.6 million) [1]. Investing cash outflow for the first half of 2021 was RMB500.7 million (US$77.6 million) [1]. Financing cash inflow for the first half of 2021 was RMB149.8 million (US$23.2 million) [1].
Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposit. As of June 30, 2021, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,291.0 million (US$200.0 million) [1], compared to RMB1,734.0 million as of March 31, 2021. The decrease from the prior quarter was primarily attributable to acquisition costs of our L&O hotels, loans to franchisees, and property investments, offset by drawing down of bank facilities.
COVID-19 Update
During the second quarter, travel demand gradually resumed as the pandemic was well contained and life returned to normalcy, especially for travel during the Tomb-Sweeping day and the Labor Day Festivals. Our RevPAR recovered substantially month-over-month in April, May and June. However, these recovery trends and the momentum in the business were negatively impacted during the third quarter and in October. There were some resurgences of COVID-19 cases in Nanjing city and Jiangsu Province at the end of July, leading to tightened travel restrictions which inevitably imposed a negative impact on the travel industry in the region. Our RevPAR dropped to about 60.7% of the 2019 level during the first week of August from 106.0% of the 2019 level by the end of June. The recent COVID-19 outbreaks in several cities in China have definitely caused some short-term turbulences and created pressure on China's domestic travel market again. This resulted in a drop in our RevPAR to about 81.3% of the 2019 level during the first week of November from 99.9% of the 2019 level by the second week of September after rebounding from the end of July. We are very optimistic about our pipeline plans and expect our recovery to resume shortly after the resurgence of COVID-19 is well under control with effective control measures implemented by the Chinese government, and we expect travel restrictions to gradually ease once again. Moving forward, we are well positioned with our resilient business model to meet the demand when domestic travels increase.
Guidance
Considering the impact of COVID-19 clusters in Nanjing city and other places in China recently, and assuming the resurgence of these outbreaks remains under control in China in the coming quarters, the Company expects an increase in total revenues of 25%-30% for the full year 2021, compared to 2020 and an increase in total revenues of 7%-12% for the full year 2021, 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 June 30, 2021, GreenTree had a total number of 4,542 hotels. In 2020, HOTELS magazine ranked GreenTree Top 12 Ranking among 225 largest global hotel groups in terms of number of hotels in its annual HOTELS' 225. GreenTree was also the fourth largest hospitality company in China in 2020 based on the statistics issued by the China Hospitality Association.
| GreenTree Hospitality Group Ltd. | |||||
| Unaudited Condensed Consolidated Balance Sheets | |||||
| December 31, | June 30, | June 30, | |||
| 2020 | 2021 | 2021 | |||
| RMB | RMB | US$ | |||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 611,358,209 | 301,977,626 | 46,770,379 | ||
| Short-term investment | 301,983,182 | 457,389,492 | 70,840,611 | ||
| Investments in equity securities | 242,378,696 | 258,063,433 | 39,968,936 | ||
| Accounts receivable, net of allowance | 101,511,057 | 118,420,083 | 18,340,935 | ||
| Amounts due from related parties | 9,770,871 | 96,724,469 | 14,980,713 | ||
| Prepaid rent | 13,597,867 | 27,794,835 | 4,304,872 | ||
| Inventories | 3,804,680 | 2,124,236 | 329,002 | ||
| Other current assets | 77,649,794 | 207,630,731 | 32,157,906 | ||
| Loans receivable, net | 222,244,629 | 229,822,383 | 35,594,954 | ||
| Total current assets | 1,584,298,985 | 1,699,947,288 | 263,288,308 | ||
| Non-current assets: | |||||
| Restricted cash | 22,369,900 | 22,369,900 | 3,464,656 | ||
| Long-term time deposits | 490,000,000 | 200,000,000 | 30,976,056 | ||
| Loan receivable, net | 145,703,988 | 374,363,755 | 57,981,562 | ||
| Property and equipment, net | 668,605,661 | 932,584,414 | 144,438,933 | ||
| Intangible assets, net | 491,513,073 | 528,910,391 | 81,917,788 | ||
| Goodwill | 100,231,487 | 104,582,687 | 16,197,796 | ||
| Long-term investments | 369,525,917 | 184,385,036 | 28,557,606 | ||
| Other assets | 66,635,394 | 304,334,781 | 47,135,455 | ||
| Deferred tax assets | 156,070,112 | 134,764,674 | 20,872,390 | ||
| TOTAL ASSETS | 4,094,954,517 | 4,486,242,926 | 694,830,550 | ||
| LIABILITIES AND EQUITY | |||||
| Current liabilities: | |||||
| Short-term bank loans | 150,000,000 | 290,000,000 | 44,915,280 | ||
| Accounts payable | 19,606,344 | 18,092,131 | 2,802,114 | ||
| Advance from customers | 34,305,508 | 27,860,877 | 4,315,100 | ||
| Amounts due to related parties | 3,198,253 | 5,355,911 | 829,525 | ||
| Salary and welfare payable | 51,567,587 | 56,836,957 | 8,802,924 | ||
| Deferred rent | 1,356,132 | 2,568,897 | 397,871 | ||
| Deferred revenue | 221,314,997 | 222,434,022 | 34,450,643 | ||
| Accrued expenses and other current liabilities | 300,696,673 | 384,637,018 | 59,572,690 | ||
| Income tax payable | 87,483,970 | 51,441,614 | 7,967,291 | ||
| Total current liabilities | 869,529,464 | 1,059,227,427 | 164,053,438 | ||
| Deferred rent | 28,642,973 | 42,833,226 | 6,634,022 | ||
| Deferred revenue | 361,901,369 | 336,579,118 | 52,129,467 | ||
| Other long-term liabilities | 115,862,713 | 130,626,161 | 20,231,416 | ||
| Deferred tax liabilities | 178,413,413 | 175,797,535 | 27,227,571 | ||
| Unrecognized tax benefits | 290,679,902 | 312,079,760 | 48,335,000 | ||
| TOTAL LIABILITIES | 1,845,029,834 | 2,057,143,227 | 318,610,914 | ||
| Shareholders' equity: | |||||
| Class A ordinary shares | 222,587,070 | 222,587,070 | 34,474,347 | ||
| Class B ordinary shares | 115,534,210 | 115,534,210 | 17,893,971 | ||
| Additional paid-in capital | 1,149,280,404 | 1,150,227,409 | 178,147,540 | ||
| Retained earnings | 570,042,924 | 721,270,906 | 111,710,638 | ||
| Accumulated other comprehensive income | 45,586,647 | 44,212,936 | 6,847,712 | ||
| Total GreenTree Hospitality Group Ltd. shareholders' equity | 2,103,031,255 | 2,253,832,531 | 349,074,208 | ||
| Non-controlling interests | 146,893,428 | 175,267,168 | 27,145,428 | ||
| Total shareholders' equity | 2,249,924,683 | 2,429,099,699 | 376,219,636 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 4,094,954,517 | 4,486,242,926 | 694,830,550 | ||
| GreenTree Hospitality Group Ltd. | |||||||||||
| Unaudited Condensed Consolidated Statements of Comprehensive Income | |||||||||||
| Quarter Ended | Six Months Ended | ||||||||||
| June 30, 2020 | June 30, 2021 | June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2021 | ||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||
| Revenues | |||||||||||
| Leased-and-operated hotels | 50,337,339 | 116,882,174 | 18,102,743 | 84,137,483 | 172,995,482 | 26,793,588 | |||||
| Franchised-and-managed hotels | 158,534,095 | 217,656,936 | 33,710,767 | 276,197,197 | 395,606,563 | 61,271,654 | |||||
| Others | 7,118,530 | 12,517,770 | 1,938,756 | 13,051,275 | 19,667,293 | 3,046,076 | |||||
| Total revenues | 215,989,964 | 347,056,880 | 53,752,266 | 373,385,955 | 588,269,338 | 91,111,318 | |||||
| Operating costs and expenses | |||||||||||
| Hotel operating costs | (94,916,577) | (164,437,048) | (25,468,056) | (184,679,850) | (286,667,300) | (44,399,111) | |||||
| Selling and marketing expenses | (11,999,656) | (21,703,311) | (3,361,415) | (29,840,978) | (39,821,421) | (6,167,553) | |||||
| General and administrative expenses | (48,143,971) | (71,043,670) | (11,003,263) | (76,889,542) | (127,001,827) | (19,670,078) | |||||
| Other operating expenses | (41,123) | (2,752,734) | (426,344) | (1,198,272) | (4,146,290) | (642,178) | |||||
| Total operating costs and expenses | (155,101,327) | (259,936,763) | (40,259,078) | (292,608,642) | (457,636,838) | (70,878,920) | |||||
| Other operating income | 1,762,982 | 2,181,186 | 337,823 | 19,093,913 | 20,053,589 | 3,105,905 | |||||
| Income from operations | 62,651,619 | 89,301,303 | 13,831,011 | 99,871,226 | 150,686,089 | 23,338,303 | |||||
| Interest income and other, net | 14,107,924 | 14,151,551 | 2,191,796 | 24,721,184 | 29,282,647 | 4,535,304 | |||||
| Interest expense | (1,727,991) | (4,089,714) | (633,417) | (2,738,246) | (7,477,925) | (1,158,183) | |||||
| Gains (losses) from investment in equity securities | 42,534,583 | 16,149,045 | 2,501,169 | (12,640,335) | 43,873,336 | 6,795,115 | |||||
| Income before income taxes | 117,566,135 | 115,512,185 | 17,890,559 | 109,213,829 | 216,364,147 | 33,510,539 | |||||
| Income tax expense | (24,399,003) | (35,332,983) | (5,472,382) | (30,576,563) | (70,539,794) | (10,925,223) | |||||
| Income before share of loss in equity investees | 93,167,132 | 80,179,202 | 12,418,177 | 78,637,266 | 145,824,353 | 22,585,316 | |||||
| Share of gains in equity investees, net of tax | 553,487 | 84,331 | 13,061 | 948,331 | 463,897 | 71,849 | |||||
| Net income | 93,720,619 | 80,263,533 | 12,431,238 | 79,585,597 | 146,288,250 | 22,657,165 | |||||
| Net loss attributable to non-controlling interests | 10,621,047 | 1,053,211 | 163,122 | 12,910,415 | 4,939,732 | 765,067 | |||||
| Net income attributable to ordinary shareholders | 104,341,666 | 81,316,744 | 12,594,360 | 92,496,012 | 151,227,982 | 23,422,232 | |||||
| Net earnings per share | |||||||||||
| Class A ordinary share-basic and diluted | 1.01 | 0.79 | 0.12 | 0.90 | 1.47 | 0.23 | |||||
| Class B ordinary share-basic and diluted | 1.01 | 0.79 | 0.12 | 0.90 | 1.47 | 0.23 | |||||
| Net earnings per ADS | |||||||||||
| Class A ordinary share-basic and diluted | 1.01 | 0.79 | 0.12 | 0.90 | 1.47 | 0.23 | |||||
| Class B ordinary share-basic and diluted | 1.01 | 0.79 | 0.12 | 0.90 | 1.47 | 0.23 | |||||
| Weighted average shares outstanding | |||||||||||
| Class A ordinary share-basic and diluted | 68,286,954 | 68,286,954 | 68,286,954 | 68,286,954 | 68,286,954 | 68,286,954 | |||||
| Class B ordinary share-basic and diluted | 34,762,909 | 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 | (1,181,225) | (3,804,473) | (589,238) | 3,816,008 | (1,373,712) | (212,761) | |||||
| Comprehensive income, net of tax | 92,539,394 | 76,459,060 | 11,842,000 | 83,401,605 | 144,914,538 | 22,444,404 | |||||
| Comprehensive loss attributable to non-controlling interests | 10,621,047 | 1,053,211 | 163,122 | 12,910,415 | 4,939,732 | 765,067 | |||||
| Comprehensive income attributable to ordinary shareholders | 103,160,441 | 77,512,271 | 12,005,122 | 96,312,020 | 149,854,270 | 23,209,471 | |||||
| GreenTree Hospitality Group Ltd. | |||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||||
| Quarter Ended | Six Months Ended | ||||||||||
| June 30, 2020 | June 30, 2021 | June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2021 | ||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||
| Operating activities: | |||||||||||
| Net income | 93,720,619 | 80,263,533 | 12,431,238 | 79,585,597 | 146,288,250 | 22,657,165 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 16,339,200 | 21,363,445 | 3,308,776 | 32,005,845 | 40,437,845 | 6,263,025 | |||||
| Share of gains in equity method investments | (553,487) | (84,331) | (13,061) | (948,331) | (463,897) | (71,848) | |||||
| Fair value change in returnable consideration and contingent consideration, net | - | - | - | - | (502,712) | (77,860) | |||||
| Interest income | (2,097,419) | (1,765,790) | (273,486) | (4,841,860) | (3,855,030) | (597,068) | |||||
| Bad debt expense | 12,009,289 | 8,703,709 | 1,348,033 | 17,928,925 | 20,461,144 | 3,169,028 | |||||
| (Gains)losses from investments in equity securities | (42,534,582) | (16,149,045) | (2,501,169) | 12,640,335 | (43,873,336) | (6,795,115) | |||||
| Foreign exchange (gains) losses | (1,367,301) | 1,775,361 | 274,968 | (209,869) | 2,507,642 | 388,384 | |||||
| Share-based compensation | - | 529,166 | 81,957 | 232,558 | 1,307,865 | 202,562 | |||||
| Income tax expenses related to dividend distribution or retained profits | 4,089,529 | - | - | 8,089,529 | - | - | |||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (44,819,542) | (20,719,952) | (3,209,112) | (38,698,091) | (32,846,596) | (5,087,290) | |||||
| Prepaid rent | 5,586,585 | (6,091,256) | (943,415) | 9,922,250 | (14,196,968) | (2,198,830) | |||||
| Inventories | 156,836 | 507,466 | 78,596 | (237,377) | 1,680,444 | 260,268 | |||||
| Amounts due from related parties | 715,354 | (488,496) | (75,658) | 1,510,197 | (3,873,538) | (599,935) | |||||
| Other current assets | (5,488,452) | (42,766,291) | (6,623,655) | 14,827,078 | (123,719,995) | (19,161,787) | |||||
| Other assets | (3,332,215) | (9,573,784) | (1,482,790) | (9,014,522) | (7,784,920) | (1,205,731) | |||||
| Accounts payable | 1,602,850 | (3,319,895) | (514,186) | 2,888,996 | (1,514,213) | (234,522) | |||||
| Amounts due to related parties | (30,278) | 2,056,471 | 318,507 | (2,048,301) | 2,157,658 | 334,179 | |||||
| Salary and welfare payable | 3,390,002 | 4,595,233 | 711,711 | 1,372,751 | 5,269,370 | 816,121 | |||||
| Deferred revenue | (8,125,238) | (9,538,448) | (1,477,317) | (39,043,755) | (24,203,226) | (3,748,602) | |||||
| Advance from customers | (5,183,719) | (2,191,085) | (339,356) | (7,757,920) | (6,444,631) | (998,146) | |||||
| Accrued expenses and other current liabilities | 76,631,257 | 36,992,871 | 5,729,466 | (28,104,147) | 52,388,512 | 8,113,947 | |||||
| Income tax payable | (30,267,700) | (41,031,173) | (6,354,919) | (46,418,967) | (36,042,356) | (5,582,250) | |||||
| Unrecognized tax benefits | (17,495,140) | 15,757,387 | 2,440,508 | (3,209,911) | 21,399,858 | 3,314,416 | |||||
| Deferred rent | (910,363) | 11,168,115 | 1,729,721 | 4,151,399 | 15,403,018 | 2,385,624 | |||||
| Other long-term liabilities | 4,624,768 | 3,352,037 | 519,164 | 17,619,297 | 14,233,448 | 2,204,480 | |||||
| Deferred taxes | 1,599,014 | 11,269,091 | 1,745,360 | (12,368,615) | 18,689,560 | 2,894,644 | |||||
| Net cash provided by operating activities | 58,259,867 | 44,614,339 | 6,909,881 | 9,873,091 | 42,903,196 | 6,644,859 | |||||
| Investing activities: | |||||||||||
| Purchases of property and equipment | (18,550,705) | (89,389,814) | (13,844,719) | (41,628,937) | (157,888,825) | (24,453,865) | |||||
| Purchases of intangible assets | (9,075) | - | - | (9,075) | - | - | |||||
| Proceeds from disposal of property and equipment | 11,125 | - | - | 11,125 | - | - | |||||
| Payment for acquisition of minority equity | - | - | - | - | (868,388) | (134,496) | |||||
| Acquisitions, net of cash received | (1,255,807) | (119,469,020) | (18,503,395) | (1,255,807) | (173,128,625) | (26,814,209) | |||||
| Collection of acquisition advances | 35,440,000 | 9,148,000 | 1,416,845 | 35,440,000 | 10,148,000 | 1,571,725 | |||||
| Advances for purchases of property and equipment | (170,426,363) | (26,395,682) | (204,889,383) | (31,733,325) | |||||||
| Purchases of short-term investments | (46,420,027) | (73,361,955) | (11,362,320) | (147,690,027) | (138,286,310) | (21,417,822) | |||||
| Proceeds from short-term investments | 3,567,419 | 133,185,790 | 20,627,852 | 398,634,105 | 356,735,030 | 55,251,220 | |||||
| Proceeds from sales of long-term time deposits | - | - | - | - | 50,000,000 | 7,744,015 | |||||
| Increase of long-term time deposits | - | - | - | (30,000,000) | (130,000,000) | (20,134,436) | |||||
| Proceeds from disposal of equity securities and dividends received from equity securities | 2,540,418 | 211,307,112 | 32,727,304 | 2,540,418 | 211,307,112 | 32,727,304 | |||||
| Proceeds from disposal of euqity method investments | 6,380,000 | - | - | 6,380,000 | - | - | |||||
| Loan to related parties | (19,850,000) | (53,467,680) | (8,281,090) | (185,366,500) | (231,745,560) | (35,892,818) | |||||
| Repayment from related parties | 20,639,679 | 1,250,000 | 193,600 | 186,156,179 | 148,665,500 | 23,025,354 | |||||
| Loan to third parties | (1,200,000) | (9,000,000) | (1,393,922) | (3,200,000) | (10,500,000) | (1,626,243) | |||||
| Repayment of loan from third parties | - | 46,500,000 | 7,201,933 | - | 46,500,000 | 7,201,933 | |||||
| Loan to franchisees | (47,721,778) | (269,415,292) | (41,727,115) | (146,451,778) | (460,435,294) | (71,312,346) | |||||
| Repayment from franchisees | 20,199,572 | 140,599,873 | 21,776,147 | 35,215,035 | 183,674,199 | 28,447,511 | |||||
| Net cash (used in) provided by investing activities | (46,229,179) | (242,539,349) | (37,564,562) | 108,774,738 | (500,712,544) | (77,550,498) | |||||
| Financing activities: | |||||||||||
| Loan from non-controlling interest | - | - | - | - | 2,792,853 | 432,558 | |||||
| Proceeds from short-term borrowings | - | 10,000,000 | 1,548,803 | 10,000,000 | 140,000,000 | 21,683,239 | |||||
| Capital contribution from noncontrolling interest holders | 2,978,387 | 3,740,000 | 579,252 | 3,378,387 | 7,031,000 | 1,088,963 | |||||
| Net cash provided by financing activities | 2,978,387 | 13,740,000 | 2,128,055 | 13,378,387 | 149,823,853 | 23,204,760 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 1,167,214 | (1,804,220) | (279,437) | 592,196 | (1,395,088) | (216,071) | |||||
| Net increase(decrease) in cash and cash equivalents | 16,176,289 | (185,989,230) | (28,806,063) | 132,618,412 | (309,380,583) | (47,916,950) | |||||
| Cash and cash equivalents at the beginning of the period | 458,602,346 | 510,336,756 | 79,041,098 | 342,160,223 | 633,728,109 | 98,151,985 | |||||
| Cash and cash equivalents at the end of the period | 474,778,635 | 324,347,526 | 50,235,035 | 474,778,635 | 324,347,526 | 50,235,035 | |||||
| GreenTree Hospitality Group Ltd. | |||||||||||
| Unaudited Reconciliation of GAAP and Non-GAAP Results | |||||||||||
| Quarter Ended | Six Months Ended | ||||||||||
| June 30, 2020 | June 30, 2021 | June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2021 | ||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||
| Net income | 93,720,619 | 80,263,533 | 12,431,238 | 79,585,597 | 146,288,250 | 22,657,165 | |||||
| Deduct: | |||||||||||
| Other operating income | 1,762,982 | 2,181,186 | 337,823 | 19,093,913 | 20,053,589 | 3,105,905 | |||||
| Interest income and other, net | 14,107,924 | 14,151,551 | 2,191,796 | 24,721,184 | 29,282,647 | 4,535,304 | |||||
| Gains from investment in equity securities | 42,534,583 | 16,149,045 | 2,501,169 | 42,534,583 | 43,873,336 | 6,795,114 | |||||
| Share of gains in equity investees, net of tax | 553,487 | 84,331 | 13,061 | 948,331 | 463,897 | 71,848 | |||||
| Add: | |||||||||||
| Other operating expenses | 41,123 | 2,752,734 | 426,344 | 1,198,272 | 4,146,290 | 642,179 | |||||
| Income tax expense | 24,399,003 | 35,332,983 | 5,472,382 | 30,576,563 | 70,539,794 | 10,925,223 | |||||
| Interest expense | 1,727,991 | 4,089,714 | 633,416 | 2,738,246 | 7,477,925 | 1,158,183 | |||||
| Depreciation and amortization | 16,339,200 | 21,363,445 | 3,308,776 | 32,005,845 | 40,437,845 | 6,263,025 | |||||
| Losses from investment in equity securities | - | - | - | 55,174,918 | - | - | |||||
| Adjusted EBITDA(Non-GAAP) | 77,268,960 | 111,236,296 | 17,228,308 | 114,213,988 | 175,216,635 | 27,137,601 | |||||
| Quarter Ended | Six Months Ended | ||||||||||
| June 30, 2020 | June 30, 2021 | June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2021 | ||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||
| Net income | 93,720,619 | 80,263,533 | 12,431,238 | 79,585,597 | 146,288,250 | 22,657,165 | |||||
| Deduct: | |||||||||||
| Government subsidies (net of 25% tax) | 779,513 | 843,954 | 130,712 | 13,212,085 | 11,134,872 | 1,724,572 | |||||
| Gains from investment in equity securities (net of 25% tax) | 31,900,937 | 12,111,784 | 1,875,876 | 31,900,937 | 32,905,002 | 5,096,336 | |||||
| Add: | |||||||||||
| Share-based compensation | - | 529,166 | 81,957 | 232,558 | 1,307,865 | 202,562 | |||||
| Losses from investments in equity securities (net of 25% tax) | - | - | - | 41,381,189 | - | - | |||||
| One-time fees and expense | 11,033,914 | 1,708,936 | - | 14,707,304 | 2,277,871 | ||||||
| Asset impairment/Accrued bad debt | 9,501,082 | - | 9,501,082 | 4,523,574 | 700,612 | ||||||
| Income tax expenses related to dividend distribution | 4,089,529 | - | - | 8,089,529 | - | - | |||||
| Core net income(Non-GAAP) | 74,630,780 | 78,870,874 | 12,215,543 | 93,676,933 | 122,787,119 | 19,017,303 | |||||
| Core net income per ADS (Non-GAAP) | |||||||||||
| Class A ordinary share-basic and diluted | 0.72 | 0.77 | 0.12 | 0.91 | 1.19 | 0.18 | |||||
| Class B ordinary share-basic and diluted | 0.72 | 0.77 | 0.12 | 0.91 | 1.19 | 0.18 | |||||
Operational Data
| 2020 Q2 | 2021 Q2 | |
| Total hotels in operation: | 4,064 | 4,542 |
| Leased-and-owned hotels | 35 | 63 |
| Franchised hotels | 4,029 | 4,479 |
| Total hotel rooms in operation | 296,307 | 328,773 |
| Leased-and-owned hotels | 4,359 | 7,229 |
| Franchised hotels | 291,948 | 321,544 |
| Number of cities | 342 | 358 |
| Quarter Ended | ||
| 2020 Q2 | 2021 Q2 | |
| Occupancy rate (as a percentage) | ||
| Leased-and-owned hotels | 46.5% | 72.9% |
| Franchised hotels | 63.7% | 78.8% |
| Blended | 63.4% | 78.6% |
| Average daily rate (in RMB) | ||
| Leased-and-owned hotels | 173 | 219 |
| Franchised hotels | 142 | 169 |
| Blended | 142 | 171 |
| RevPAR (in RMB) | ||
| Leased-and-owned hotels | 80 | 160 |
| Franchised hotels | 90 | 133 |
| Blended | 90 | 134 |
| Number of Hotels in Operation | Number of Hotel Rooms in Operation | |||
| 2020 Q2 | 2021 Q2 | 2020 Q2 | 2021 Q2 | |
| Luxury | 21 | 28 | 4,388 | 5,821 |
| Argyle | 21 | 28 | 4,388 | 5,821 |
| Mid-to-up-scale | 296 | 423 | 26,682 | 38,704 |
| GreenTree Eastern | 118 | 170 | 12,509 | 18,155 |
| Deepsleep Hotel | 2 | 5 | 161 | 356 |
| Gem | 32 | 39 | 2,896 | 3,605 |
| Gya | 28 | 50 | 2,348 | 4,212 |
| Vx | 28 | 52 | 2,260 | 4,520 |
| Ausotel | 11 | 14 | 1,521 | 1,877 |
| Urban Garden and others[1] | 77 | 93 | 4,987 | 5,979 |
| Mid-scale | 2,610 | 2,917 | 212,674 | 231,105 |
| GreenTree Inn | 2,047 | 2,158 | 173,519 | 179,790 |
| GT Alliance | 316 | 508 | 24,176 | 35,937 |
| GreenTree Apartment | 10 | 15 | 488 | 1,058 |
| Vatica | 124 | 115 | 9,026 | 8,386 |
| City 118 Selected and others[1] | 113 | 121 | 5,465 | 5,934 |
| Economy hotels | 1,139 | 1,174 | 52,563 | 53,143 |
| Shell | 574 | 617 | 25,017 | 26,714 |
| City 118 and others[1] | 565 | 557 | 27,546 | 26,429 |
| Total | 4,066 | 4,542 | 296,307 | 328,773 |