- Total revenues increased by 12.1% year over year to RMB794.2 million (US$109.5 million)[1].
- Income from operations was RMB150.9 million (US$20.8 million)[1], compared to RMB-474.3 million for the first half of 2022.
- Net income was RMB177.3 million (US$24.5 million)[1], compared to RMB-384.5 million for the first half of 2022.
- Adjusted EBITDA (non-GAAP)[2] increased by 137.8% year over year to RMB226.9 million (US$31.3 million)[1].
- Core net income (non-GAAP)[3] increased by 65.2% year over year to RMB136.1 million (US$18.8 million)[1].
GreenTree Hospitality Group Ltd. (NYSE: GHG), a leading hospitality and restaurant management group in China, today announced its unaudited financial results for the first half of 2023. As Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China, were all under the control of our founder, Alex S. Xu, until their acquisition by the Company, the Company accounted for the common-control acquisitions by using the pooling of interest method. The consolidated balance sheets and consolidated statements of comprehensive income/(loss) include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under common control. In this report, the comparative financial data have been restated to reflect the business combinations under common control.
First Half 2023 Operational Highlights
Hotels
- A total of 4,108 hotels with 303,387 hotel rooms were in operation as of June 30, 2023.
- The Company opened 183 hotels during the six months ended June 30, 2023, and had a pipeline of 969 hotels contracted for or under development as of June 30, 2023.
- The average daily room rate was RMB167 in the first quarter of 2023, an increase of 9.1% from RMB153 in the first quarter of 2022, and RMB181 in the second quarter of 2023, a 23.1% year-over-year increase.
- The occupancy rate was 71.7% in the first quarter of 2023, up from 60.0% in the first quarter of 2022, and 77.8% in the second quarter of 2023, compared to 62.2% in the second quarter of 2022.
- Revenue per available room, or RevPAR, was RMB120 in the first quarter of 2023, a 30.4% year-over-year increase, and RMB141 in the second quarter of 2023, a 54.0% year-over-year increase.
Restaurants
- A total of 218 restaurants were in operation as of June 30, 2023.
- The AC (average check) was RMB55 in the first quarter of 2023, a 19.2% year-over-year increase, and RMB53 in the second quarter of 2023, a 2.2% year-over-year increase.
- The ADT (average daily tickets) was 110 in the first quarter of 2023, down from 130 in the first quarter of 2022, and 120 in the second quarter of 2023, compared to 78 in the second quarter of 2022.
- The ADS (average daily sales per store) was RMB 6,080 in the first quarter of 2023, an increase of 0.9% from RMB 6,027 in the first quarter of 2022, and RMB 6,371 in the second quarter of 2023, a 57.3% year-over-year increase.
"For our hotel business, the first quarter of 2023 marked a new beginning thanks to the recovery in the hospitality industry and the entire economy in China. RevPAR recovered to 94.3% of its first quarter of 2019 level. RevPAR during the national Labor Day holiday in early May reached more than 120% of its level in the same period in 2019, capitalizing on the popularity of travel during the national holiday period. And due to an increase in the number of people traveling during the summer vacation, RevPAR in July and August was nearly stable at 110% of its level in the same period in 2019.
As previously disclosed, the Company completed the acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China from our controlling shareholder. Our strategy and execution in our restaurant business focus on further expansion in the proportion of franchised-and-managed restaurants and greater penetration to street stores. To ensure the profitability of our restaurant business, we closed unprofitable stores. In the first half of 2023, the ADS of restaurant business recovered to 122.9% of its first half of 2022 level.
"We are grateful for the hard work of our team, franchisees, and partners, and the support of our customers that made it possible to recover quickly starting from the first quarter of 2023 as China began returning to normal life," said Mr. Alex S. Xu, Chairman and Chief Executive Officer of GreenTree.
First Half 2023 Financial Results
| Six months Ended | ||||
| June 30, 2022 | June 30, 2022 | June 30, 2022 | June 30, 2022 | |
| RMB | RMB | RMB | RMB | |
| Hotel | Restaurant | Elimination | Total | |
| Revenues | ||||
| Leased-and-operated revenues | 171,272,365 | 171,008,920 | (229,756) | 342,051,529 |
| Franchised-and-managed revenues | 275,539,547 | 18,229,310 | 293,768,857 | |
| Wholesales and others | 10,564,787 | 62,284,229 | 72,849,016 | |
| Total revenues | 457,376,699 | 251,522,459 | (229,756) | 708,669,402 |
| Six months Ended | |||||
| June 30, 2023 | June 30, 2023 | June 30, 2023 | June 30, 2023 | June 30, 2023 | |
| RMB | RMB | RMB | RMB | US$ | |
| Hotel | Restaurant | Elimination | Total | Total | |
| Revenues | |||||
| Leased-and-operated revenues | 213,563,927 | 168,340,074 | (1,125,179) | 380,778,822 | 52,511,801 |
| Franchised-and-managed revenues | 347,417,000 | 17,355,892 | 364,772,892 | 50,304,482 | |
| Wholesales and others | 2,225,580 | 46,432,697 | 48,658,277 | 6,710,283 | |
| Total revenues | 563,206,507 | 232,128,663 | (1,125,179) | 794,209,991 | 109,526,566 |
Total revenues for the first half of 2023 were RMB794.2 million (US$109.5 million)[1], a 12.1% year-over-year increase.
Hotel revenues were RMB563.2 million (US$77.7 million), a 23.1% year-over-year increase. The increase was mainly attributable to the recovery in RevPAR and the increase in the number of hotels.
Restaurant revenues were RMB232.1 million (US$32.0 million), a 7.7% year-over-year decrease. The decrease was mainly due to the closure of 64 stores, and partially offset by an increase in ADS.
Total revenues from leased-and-operated, or L&O, hotels and restaurants were RMB380.8 million (US$52.5 million)[1], a 11.3% year-over-year increase.
Total revenues from L&O hotels for the first half of 2023 were RMB213.6 million (US$29.5 million)[1], a 24.7% year-over-year increase. The increase was primarily attributable to a 47.8% year-over-year increase in L&O hotels' first half RevPAR and more newly opened L&O hotels in the first half of 2023 as compared to the first half of 2022.
Total revenues from L&O restaurants for the first half of 2023 were RMB168.3 million (US$23.2 million)[1], a 1.6% year-over-year decrease. The decrease was mainly due to the closure of 47 L&O stores, and partially offset by an increase in ADS.
Total revenues from franchised-and-managed, or F&M, hotels and restaurants were RMB364.8 million (US$ 50.3 million)[1], a 24.2% year-over-year increase.
Total revenues from F&M hotels were RMB347.4 million (US$47.9 million)[1], a 26.1% year-over-year increase. Initial franchise fees increased 9.3% year over year, mainly because of the increase in the gross opening number of F&M hotels. Recurring franchisee management fees and others increased by 27.8% year over year, primarily due to a 46.4% increase in F&M hotels' RevPAR and the increase of 167 F&M hotels.
Total revenues from F&M restaurants were RMB17.4 million (US$2.4 million)[1], a 4.8% year-over-year decrease. The decrease was mainly due to a decrease of 17 F&M stores numbers,and partially offset by a 22.9% increase in F&M stores' average daily sales.
Total revenues from wholesale and others were RMB48.7 million (US$ 6.7 million)[1], a 33.2% year-over-year decrease, mainly because of reduced business from supermarkets, partially offset by increased business through distributors.
Total operating costs and expenses
| Six Months Ended | ||||
| June 30, 2022 | June 30, 2022 | June 30, 2022 | June 30, 2022 | |
| RMB | RMB | RMB | RMB | |
| Hotel | Restaurant | Elimination | Total | |
| Operating costs and expenses | ||||
| Operating costs | 307,750,028 | 234,911,742 | 289,605 | 542,951,375 |
| Selling and marketing expenses | 18,852,606 | 9,717,435 | 28,570,041 | |
| General and administrative expenses | 99,724,402 | 21,847,196 | 121,571,598 | |
| Other operating expenses | 2,048,734 | 2,240,920 | 4,289,654 | |
| Other general expenses | 490,619,710 | 490,619,710 | ||
| Total operating costs and expenses | 918,995,480 | 268,717,293 | 289,605 | 1,188,002,378 |
| Six Months Ended | |||||
| June 30, 2023 | June 30, 2023 | June 30, 2023 | June 30, 2023 | June 30, 2023 | |
| RMB | RMB | RMB | RMB | US$ | |
| Hotel | Restaurant | Elimination | Total | Total | |
| Operating costs and expenses | |||||
| Operating costs | 284,364,378 | 204,308,159 | (610,088) | 488,062,449 | 67,306,890 |
| Selling and marketing expenses | 24,838,605 | 9,385,645 | 34,224,250 | 4,719,740 | |
| General and administrative expenses | 90,535,547 | 21,338,810 | 111,874,357 | 15,428,179 | |
| Other operating expenses | 843,564 | 6,990,654 | 7,834,218 | 1,080,388 | |
| Other general expenses | 15,973,584 | 15,973,584 | 2,202,858 | ||
| Total operating costs and expenses | 416,555,678 | 242,023,268 | (610,088) | 657,968,858 | 90,738,055 |
Operating costs were RMB488.1 million (US$67.3 million)[1], a 10.1% year-over-year decrease.
Operating costs of the hotel business were RMB284.4 million (US$39.2 million)[1], a 7.6% year-over-year decrease. The decrease was mainly due to the deconsolidation of Argyle Hotel Management Group (Australia) Pty Ltd., or Argyle, and the disposal of our interest in Urban Hotel Group, or Urban, and was partially offset by higher consumables and higher utility costs as business rebounded, as well as higher rents with lower exemption compared to last year.
Operating costs of the restaurant business were RMB204.3 million (US$28.2 million)[1], a 13.0% year-over-year decrease. The decrease was due to the closure of 64 stores.
Selling and marketing expenses were RMB34.2 million (US$4.7 million)[1], a 19.8% year-over-year increase.
Selling and marketing expenses of the hotel business were RMB24.8 million (US$3.4 million)[1], a 31.8% year-over-year increase. The increase was mainly attributable to higher sales-channel commissions, higher sales staff salaries, and higher travel expenses.
Selling and marketing expenses of the restaurant business were RMB9.4 million (US$1.3 million)[1], a 3.4% year-over-year decrease. The decrease was mainly attributable to lower advertising expenses and lower sales-channel commissions.
General and administrative, or G&A expenses were RMB111.9 million (US$15.4 million)[1], an 8.0% year-over-year decrease.
G&A expenses of the hotel business were RMB90.5 million (US$12.5 million)[1], a 9.2% year-over-year decrease. The decrease was mainly due to the deconsolidation of Argyle and the disposal of our interest in Urban,and partially offset by higher consulting fees and higher staff related expenses.
G&A expenses of the restaurant business were RMB21.3 million (US$2.9 million)[1], a 2.3 % year-over-year decrease. The decrease was mainly due to lower staff related expenses and lower rents due to the closure of 64 stores.
Other general expenses of the hotel business were RMB16.0 million (US$2.2 million)[1], a 96.7% year-over-year decrease.These expenses include the provisions for loan receivables related to franchisee loans, and impairments caused by the disposal of 4 unprofitable hotels.
Gross profit was RMB306.1 million (US$42.2 million)[1], a year-over-year increase of 84.7%. Gross margin was 38.5%, compared to 23.4% a year ago. The gross profit of the hotel business was RMB278.8 million (US$38.5 million)[1], an 86.4% year-over-year increase. The gross profit of the restaurant business was RMB27.8 million (US$3.8 million)[1], a 67.5% year-over-year increase.
Income from operations was RMB150.9 million (US$20.8 million)[1] , compared to a loss from operations of RMB474.3 million in the first half of 2022, with a margin of 19.0%.
Income from operations of the hotel business was RMB160.4 million (US$22.1 million)[1], compared to a loss from operations of RMB457.7 million in the first half of 2022, with a margin of 28.5%.
Loss from operations of the restaurant business was RMB9.0 million (US$1.2 million)[1], compared to a loss from operations of RMB16.1 million in the first half of 2022, with a margin of -3.9%.
Net income was RMB177.3 million (US$24.5 million)[1], compared to a net loss of RMB384.5 million in the first half of 2022, and net margin was 22.3%.
Net income of the hotel business was RMB191.8 million (US$26.5 million)[1], compared to a net loss of RMB360.9 million in the first half of 2022, and net margin was 34.1%.
Net loss of the restaurant business was RMB14.1 million (US$1.9 million)[1], compared to a net loss of RMB23.2 million in the first half of 2022, and net margin was -6.1%.
Adjusted EBITDA (non-GAAP)[2] was RMB226.9 million (US$31.3 million)[1], a year-over-year increase of 137.8%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, was 28.6%, compared to 13.5% a year ago.
Core net income (non-GAAP) was RMB136.1 million (US$18.8 million)[1], a year-over-year increase of 65.2%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, for the first half of 2023 was 17.1%, compared to 11.6% one year ago.
Earnings per American Depositary Share, or ADS, (basic and diluted) were RMB1.79 (US$0.25)[1], up from RMB-3.38 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) for the first half of 2023 was RMB1.33 (US$0.18)[1], up from RMB0.80 a year ago.
Cash flow Operating cash inflow was RMB313.1 million (US$43.2 million)[1] as a result of income from operations. Investing cash inflow for the first half of 2023 was RMB128.2 million (US$17.7 million)[1], which was primarily attributable to proceeds from short-term investments and repayment from franchisees. The investing cash inflow was partially offset by purchases of property and equipment and short-term investments. Financing cash outflow was RMB37.4 million (US$5.2 million)[1], mainly attributable to the repayment of bank loans by the end of the June 30, 2023.
Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposits. As of June 30, 2023, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,440.1 million (US$198.6 million)[1], compared to RMB1,119.4 million as of December 31, 2022. The increase was primarily due to cash from operating activities and repayment from franchisees, proceeds from disposal of subsidiaries, partially offset by repayment of bank loans and investment of property.
Guidance
Taking into account the recovery in long-term trends and short-term industry fluctuations, we expect total revenues of organic hotels for the full year of 2023 to grow 30%-35% of the 2022 levels. Total revenues for our restaurant business and our organic hotel business, for the full year of 2023 are expected to grow 15%-20% over the 2022 levels.
The guidance set forth above reflects the Company's current and preliminary views based on its recovery and may not be indicative of the final financial results for any future periods or the full year.
About GreenTree Hospitality Group Ltd.
GreenTree Hospitality Group Ltd. (NYSE: GHG) is a leading hospitality and restaurant management group in China. As of June 30, 2023, GreenTree had a total number of 4,108 hotels and 218 restaurants. In 2023, HOTELS magazine ranked GreenTree 12th among the 225 largest global hotel groups in terms of number of hotels in its annual HOTELS' 225. GreenTree was the fourth largest hospitality company in China in 2022 according to the China Hospitality Association. In 2023, GreenTree completed its acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China.
GreenTree has a broad portfolio of diverse brands spanning from the economy to mid-scale, up-scale and luxury segments of the hospitality industry mainly in China. 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 diverse brand portfolio that features comfort, style and value.
| GreenTree Hospitality Group Ltd. | ||||||
| Unaudited Condensed Consolidated Balance Sheets | ||||||
| December 31, | June 30, | June 30, | ||||
| 2022 | 2023 | 2023 | ||||
| RMB | RMB | US$ | ||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | 701,332,213 | 1,115,384,452 | 153,818,550 | |||
| Restricted cash | 7,937,397 | - | - | |||
| Short-term investments | 186,031,572 | 235,416,298 | 32,465,392 | |||
| Investments in equity securities | 41,361,346 | 27,460,488 | 3,786,974 | |||
| Accounts receivable, net of allowance | 140,429,505 | 126,306,120 | 17,418,410 | |||
| Amounts due from related parties | 451,786,275 | 44,473,106 | 6,133,122 | |||
| Prepaid rent | - | - | - | |||
| Inventories | 30,503,712 | 23,052,986 | 3,179,152 | |||
| Other current assets | 142,169,713 | 147,472,648 | 20,337,408 | |||
| Loans receivable, net | 181,667,170 | 152,938,524 | 21,091,187 | |||
| Total current assets | 1,883,218,903 | 1,872,504,622 | 258,230,195 | |||
| Non-current assets: | ||||||
| Amounts due from a related party | 112,360,000 | 112,360,000 | 15,495,153 | |||
| Restricted cash | 25,359,592 | 23,544,862 | 3,246,985 | |||
| Long-term time deposits | 130,000,000 | - | - | |||
| Loans receivable, net | 177,172,509 | 98,598,159 | 13,597,308 | |||
| Property and equipment, net | 899,985,340 | 883,944,435 | 121,901,512 | |||
| Intangible assets, net | 174,748,932 | 171,687,271 | 23,676,757 | |||
| Goodwill | 128,752,950 | 128,752,950 | 17,755,844 | |||
| Long-term investments | 176,854,460 | 186,909,291 | 25,775,970 | |||
| Operating lease right-of-use assets | 1,676,544,520 | 1,633,368,783 | 225,251,856 | |||
| Other assets | 120,620,533 | 114,673,765 | 15,814,236 | |||
| Deferred tax assets | 242,186,616 | 260,348,940 | 35,903,761 | |||
| TOTAL ASSETS | 5,747,804,355 | 5,486,693,078 | 756,649,577 | |||
| LIABILITIES AND EQUITY | ||||||
| Current liabilities: | ||||||
| Short-term bank loans | 298,100,000 | 270,700,000 | 37,331,237 | |||
| Long-term bank loans, current portion | - | - | - | |||
| Accounts payable | 123,522,029 | 113,604,869 | 15,666,828 | |||
| Advance from customers | 26,480,779 | 22,822,957 | 3,147,430 | |||
| Amounts due to related parties | 24,810,304 | 23,130,913 | 3,189,899 | |||
| Salary and welfare payable | 89,343,058 | 95,815,922 | 13,213,620 | |||
| Deferred rent | - | - | - | |||
| Deferred revenue | 199,656,130 | 201,488,954 | 27,786,597 | |||
| Accrued expenses and other current liabilities | 455,519,530 | 505,932,951 | 69,771,345 | |||
| Income tax payable | 74,672,133 | 116,954,407 | 16,128,750 | |||
| Dividends payable | - | - | - | |||
| Operating lease liabilities, current | 271,518,556 | 280,717,711 | 38,712,743 | |||
| Deferred tax liabilities | 34,473,265 | 34,344,492 | 4,736,322 | |||
| Total current liabilities | 1,598,095,784 | 1,665,513,176 | 229,684,771 | |||
| Long-term bank loans | 160,000,000 | 150,000,000 | 20,685,946 | |||
| Deferred rent | - | - | - | |||
| Deferred revenue | 232,857,456 | 225,165,519 | 31,051,745 | |||
| Other long-term liabilities | 128,196,031 | 112,114,674 | 15,461,320 | |||
| Operating lease liabilities, non-current | 1,521,589,481 | 1,473,955,554 | 203,267,766 | |||
| Deferred tax liabilities | 63,815,023 | 50,773,630 | 7,002,004 | |||
| Unrecognized tax benefits | 350,002,241 | 381,962,640 | 52,675,057 | |||
| TOTAL LIABILITIES | 4,054,556,016 | 4,059,485,193 | 559,828,609 | |||
| Shareholders' equity: | ||||||
| Class A ordinary shares | 222,587,070 | 222,587,070 | 30,696,161 | |||
| Class B ordinary shares | 115,534,210 | 115,534,210 | 15,932,896 | |||
| Paid-in capital | 94,000,801 | 94,000,801 | 12,963,303 | |||
| Treasury Stock | (16,971,057) | (16,971,057) | (2,340,416) | |||
| Additional paid-in capital | 1,911,328,052 | 1,491,556,644 | 205,695,068 | |||
| Retained earnings (Accumulated losses) | (698,677,163) | (540,865,018) | (74,588,697) | |||
| Accumulated other comprehensive income | 27,732,104 | 28,728,211 | 3,961,801 | |||
| Total GreenTree Hospitality Group Ltd. shareholders' equity | 1,655,534,017 | 1,394,570,861 | 192,320,116 | |||
| Non-controlling interests | 37,714,322 | 32,637,024 | 4,500,852 | |||
| Total shareholders' equity | 1,693,248,339 | 1,427,207,885 | 196,820,968 | |||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 5,747,804,355 | 5,486,693,078 | 756,649,577 | |||
| GreenTree Hospitality Group Ltd. Unaudited Condensed Consolidated Statements of Comprehensive Income | |||||||||
| Six Months Ended | Three Months Ended | Six Months Ended | |||||||
| June 30, 2022 | March 31, 202 | June 30, 202 | June 30, 2023 | June 30, 202 | |||||
| RMB | RMB | RMB | RMB | US$ | |||||
| Revenues | |||||||||
| Leased-and-operated revenues | 342,051,529 | 170,890,916 | 209,887,906 | 380,778,822 | 52,511,801 | ||||
| Franchised-and-managed revenues | 293,768,857 | 178,526,853 | 186,246,039 | 364,772,892 | 50,304,482 | ||||
| Wholesales and others | 72,849,016 | 29,802,650 | 18,855,627 | 48,658,277 | 6,710,283 | ||||
| Total revenues | 708,669,402 | 379,220,419 | 414,989,572 | 794,209,991 | 109,526,566 | ||||
| Operating costs and expenses | |||||||||
| Operating costs | (542,951,375) | (243,155,310) | (244,907,139) | (488,062,449) | (67,306,890) | ||||
| Selling and marketing expenses | (28,570,041) | (16,015,579) | (18,208,671) | (34,224,250) | (4,719,740) | ||||
| General and administrative expenses | (121,571,598) | (57,755,145) | (54,119,212) | (111,874,357) | (15,428,179) | ||||
| Other operating expenses | (4,289,654) | (1,492,483) | (6,341,735) | (7,834,218) | (1,080,388) | ||||
| Other general expenses | (490,619,710) | (11,664,345) | (4,309,239) | (15,973,584) | (2,202,858) | ||||
| Total operating costs and expenses | (1,188,002,378) | (330,082,862) | (327,885,996) | (657,968,858) | (90,738,055) | ||||
| Other operating income | 5,043,707 | 3,159,519 | 11,511,398 | 14,670,917 | 2,023,212 | ||||
| Income from operations | (474,289,269) | 52,297,076 | 98,614,974 | 150,912,050 | 20,811,723 | ||||
| Interest income and other, net | 24,042,558 | 7,629,014 | 9,750,337 | 17,379,351 | 2,396,722 | ||||
| Interest expense | (17,441,575) | (5,528,061) | (3,868,469) | (9,396,530) | (1,295,841) | ||||
| Gains (losses) from investment in equity securities | 21,687,584 | (4,536,562) | (263,836) | (4,800,398) | (662,005) | ||||
| Other income, net | 14,751,769 | (2,149,582) | 77,119,089 | 74,969,507 | 10,338,768 | ||||
| Income before income taxes | (431,248,933) | 47,711,885 | 181,352,095 | 229,063,980 | 31,589,367 | ||||
| Income tax expense | 46,658,590 | 7,022,835 | (57,972,918) | (50,950,083) | (7,026,338) | ||||
| Income (loss) before share of gains in equity investees | (384,590,343) | 54,734,720 | 123,379,177 | 178,113,897 | 24,563,029 | ||||
| Share of loss/(income) in equity investees, net of tax | 75,125 | (445,618) | (341,265) | (786,883) | (108,516) | ||||
| Net income(loss) | (384,515,218) | 54,289,102 | 123,037,912 | 177,327,014 | 24,454,513 | ||||
| Net loss/(income) attributable to non- controlling interests | 35,800,468 | 3,768,594 | 1,308,704 | 5,077,298 | 700,192 | ||||
| Net income attributable to ordinary shareholders | (348,714,750) | 58,057,696 | 124,346,616 | 182,404,312 | 25,154,705 | ||||
| Net earnings per share | |||||||||
| Class A ordinary share- basic and diluted | (3.38) | 0.57 | 1.22 | 1.79 | 0.25 | ||||
| Class B ordinary share- basic and diluted | (3.38) | 0.57 | 1.22 | 1.79 | 0.25 | ||||
| Net earnings per ADS | |||||||||
| Class A ordinary share- basic and diluted | (3.38) | 0.57 | 1.22 | 1.79 | 0.25 | ||||
| Class B ordinary share- basic and diluted | (3.38) | 0.57 | 1.22 | 1.79 | 0.25 | ||||
| Weighted average shares outstanding | |||||||||
| Class A ordinary share- basic and diluted | 68,286,954 | 67,416,046 | 67,416,046 | 67,416,046 | 67,416,046 | ||||
| Class B ordinary share- basic and diluted | 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 | (9,730,001) | 810,574 | 185,533 | 996,107 | 137,370 | ||||
| Comprehensive income, net of tax | (394,245,219) | 55,099,676 | 123,223,445 | 178,323,121 | 24,591,883 | ||||
| Comprehensive loss/(income) attributable to non-controlling interests | 35,800,468 | 3,768,594 | (4,843,631) | (1,075,037) | (148,254) | ||||
| Comprehensive income (loss) ordinary shareholders | (358,444,751) | 58,868,270 | 118,379,814 | 177,248,084 | 24,443,629 | ||||
| GreenTree Hospitality Group Ltd. Unaudited Hotel Business Results | |||||||||
| Six Months Ended | Three Months Ended | Six Months Ended | |||||||
| June 30, 2022 | March 31, 202 | June 30, 202 | June 30, 2023 | June 30, 202 | |||||
| RMB | RMB | RMB | RMB | US$ | |||||
| Revenues | |||||||||
| Leased-and-operated revenues | 171,272,365 | 82,073,240 | 131,490,687 | 213,563,927 | 29,451,812 | ||||
| Franchised-and-managed revenues | 275,539,547 | 169,480,457 | 177,936,543 | 347,417,000 | 47,910,995 | ||||
| Others | 10,564,787 | 1,036,848 | 1,188,732 | 2,225,580 | 306,921 | ||||
| Total revenues | 457,376,699 | 252,590,545 | 310,615,962 | 563,206,507 | 77,669,728 | ||||
| Operating costs and expenses | |||||||||
| Hotel operating costs | (307,750,028) | (134,236,998) | (150,127,380) | (284,364,378) | (39,215,641) | ||||
| Selling and marketing expenses | (18,852,606) | (11,075,999) | (13,762,606) | (24,838,605) | (3,425,400) | ||||
| General and administrative expenses | (99,724,402) | (46,092,069) | (44,443,478) | (90,535,547) | (12,485,423) | ||||
| Other operating expenses | (2,048,734) | (151,220) | (692,344) | (843,564) | (116,333) | ||||
| Other general expenses | (490,619,710) | (11,664,345) | (4,309,239) | (15,973,584) | (2,202,858) | ||||
| Total operating costs and expenses | (918,995,480) | (203,220,631) | (213,335,047) | (416,555,678) | (57,445,655) | ||||
| Other operating income | 3,917,398 | 2,608,096 | 11,183,689 | 13,791,785 | 1,901,974 | ||||
| Income from operations | (457,701,383) | 51,978,010 | 108,464,604 | 160,442,614 | 22,126,047 | ||||
| Interest income and other, net | 23,730,138 | 7,475,298 | 9,597,042 | 17,072,340 | 2,354,383 | ||||
| Interest expense | (15,178,612) | (4,724,690) | (3,167,262) | (7,891,952) | (1,088,350) | ||||
| Gains (losses) from investment in equity securities | 21,687,584 | (4,536,562) | (263,836) | (4,800,398) | (662,005) | ||||
| Other income, net | 14,664,617 | (2,426,540) | 76,946,162 | 74,519,622 | 10,276,727 | ||||
| Income before income taxes | (412,797,656) | 47,765,516 | 191,576,710 | 239,342,226 | 33,006,802 | ||||
| Income tax expense | 51,800,695 | 9,365,855 | (56,097,180) | (46,731,325) | (6,444,544) | ||||
| Income (loss) before share of gains in equity investees | (360,996,961) | 57,131,371 | 135,479,530 | 192,610,901 | 26,562,258 | ||||
| Share of loss/(income) in equity investees, net of tax | 75,125 | (445,618) | (341,265) | (786,883) | (108,516) | ||||
| Net income(loss) | (360,921,836) | 56,685,753 | 135,138,265 | 191,824,018 | 26,453,742 | ||||
| GreenTree Hospitality Group Ltd. Unaudited Restaurant Business Results | |||||||||
| Six Months Ended | Three Months Ended | Six Months Ended | |||||||
| June 30, 2022 | March 31, 202 | June 30, 202 | June 30, 2023 | June 30, 202 | |||||
| RMB | RMB | RMB | RMB | US$ | |||||
| Revenues | |||||||||
| Leased-and-operated revenues | 171,008,920 | 89,376,893 | 78,963,181 | 168,340,074 | 23,215,158 | ||||
| Franchised-and-managed revenues | 18,229,310 | 9,046,396 | 8,309,496 | 17,355,892 | 2,393,487 | ||||
| Wholesale and others | 62,284,229 | 28,765,802 | 17,666,895 | 46,432,697 | 6,403,362 | ||||
| Total revenues | 251,522,459 | 127,189,091 | 104,939,572 | 232,128,663 | 32,012,007 | ||||
| Operating costs and expenses | |||||||||
| Restaurant operating costs | (234,911,742) | (109,219,983) | (95,088,176) | (204,308,159) | (28,175,384) | ||||
| Selling and marketing expenses | (9,717,435) | (4,939,580) | (4,446,065) | (9,385,645) | (1,294,340) | ||||
| General and administrative expenses | (21,847,196) | (11,663,076) | (9,675,734) | (21,338,810) | (2,942,756) | ||||
| Other operating expenses | (2,240,920) | (1,341,263) | (5,649,391) | (6,990,654) | (964,055) | ||||
| Other general expenses | - | - | - | - | - | ||||
| Total operating costs and expenses | (268,717,293) | (127,163,902) | (114,859,366) | (242,023,268) | (33,376,535) | ||||
| Other operating income | 1,126,309 | 551,423 | 327,709 | 879,132 | 121,238 | ||||
| Income from operations | (16,068,525) | 576,612 | (9,592,085) | (9,015,473) | (1,243,290) | ||||
| Interest income and other, net | 312,420 | 153,716 | 153,295 | 307,011 | 42,339 | ||||
| Interest expense | (2,262,963) | (803,371) | (701,207) | (1,504,578) | (207,491) | ||||
| Gains (losses) from investment in equity securities | - | - | - | - | - | ||||
| Other income, net | 87,152 | 276,958 | 172,926 | 449,884 | 62,041 | ||||
| Income before income taxes | (17,931,916) | 203,915 | (9,967,071) | (9,763,156) | (1,346,401) | ||||
| Income tax expense | (5,271,945) | (2,407,407) | (1,940,124) | (4,347,531) | (599,552) | ||||
| Income (loss) before share of gains in equity investees | (23,203,862) | (2,203,492) | (11,907,194) | (14,110,686) | (1,945,953) | ||||
| Share of loss/(income) in equity investees, net of tax | - | - | - | - | - | ||||
| Net income(loss) | (23,203,862) | (2,203,492) | (11,907,194) | (14,110,686) | (1,945,953) | ||||
| GreenTree Hospitality Group Ltd. | |||||||
| Unaudited Condensed Consolidated Statements | |||||||
| Six Months Ended | Six Months Ended | Six Months Ended | Six Months Ended | ||||
| June 30, 2022 | June 30, 2022 | June 30, 2022 | June 30, 2022 | ||||
| Hotel | Restaurant | Elimination | Total | ||||
| RMB | RMB | RMB | RMB | ||||
| Revenues | |||||||
| Leased-and-operated hotels | 171,272,365 | 171,008,920 | (229,756) | 342,051,529 | |||
| Franchised-and-managed hotels | 275,539,547 | 18,229,310 | 293,768,857 | ||||
| Wholesale and Others | 10,564,787 | 62,284,229 | 72,849,016 | ||||
| Total revenues | 457,376,699 | 251,522,459 | (229,756) | 708,669,402 | |||
| Operating costs and expenses | |||||||
| Operating costs | (307,750,028) | (234,911,742) | (289,605) | (542,951,375) | |||
| Selling and marketing expenses | (18,852,606) | (9,717,435) | (28,570,041) | ||||
| General and administrative expenses | (99,724,402) | (21,847,196) | (121,571,598) | ||||
| Other operating expenses | (2,048,734) | (2,240,920) | (4,289,654) | ||||
| Other general expenses | (490,619,710) | (490,619,710) | |||||
| Total operating costs and expenses | (918,995,480) | (268,717,293) | (289,605) | (1,188,002,378) | |||
| Other operating income | 3,917,398 | 1,126,309 | 5,043,707 | ||||
| Income from operations | (457,701,383) | (16,068,525) | (519,361) | (474,289,269) | |||
| GreenTree Hospitality Group Ltd. | |||||||
| Unaudited Condensed Consolidated Statements | |||||||
| Six Months Ended | Six Months Ended | Six Months Ended | Six Months Ended | ||||
| June 30, 2023 | June 30, 2023 | June 30, 2023 | June 30, 2023 | ||||
| Hotel | Restaurant | Elimination | Total | ||||
| RMB | RMB | RMB | RMB | ||||
| Revenues | |||||||
| Leased-and-operated hotels | 213,563,927 | 168,340,074 | (1,125,179) | 380,778,822 | |||
| Franchised-and-managed hotels | 347,417,000 | 17,355,892 | 364,772,892 | ||||
| Wholesales and others | 2,225,579 | 46,432,698 | 48,658,277 | ||||
| Total revenues | 563,206,506 | 232,128,664 | (1,125,179) | 794,209,991 | |||
| Operating costs and expenses | |||||||
| Operating costs | (284,364,378) | (204,308,159) | 610,088 | (488,062,449) | |||
| Selling and marketing expenses | (24,838,605) | (9,385,645) | (34,224,250) | ||||
| General and administrative expenses | (90,535,547) | (21,338,810) | (111,874,357) | ||||
| Other operating expenses | (843,564) | (6,990,654) | (7,834,218) | ||||
| Other general expenses | (15,973,584) | (15,973,584) | |||||
| Total operating costs and expenses | (416,555,678) | (242,023,268) | 610,088 | (657,968,858) | |||
| Other operating income | 13,791,785 | 879,132 | 14,670,917 | ||||
| Income from operations | 160,442,613 | (9,015,472) | (515,091) | 150,912,050 | |||
| GreenTree Hospitality Group Ltd. | |||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||
| Six Months Ended | Three Months Ended | Six Months Ended | |||||||
| June 30, 2022 | March 31, 2023 | June 30, 2023 | June 30, 2023 | June 30, 2023 | |||||
| RMB | RMB | RMB | RMB | US$ | |||||
| Operating activities: | |||||||||
| Net (loss) income | -384,515,218 | 54,289,102 | 123,037,911 | 177,327,013 | 24,454,513 | ||||
| Depreciation and amortization | 79,849,031 | 31,080,092 | 35,745,507 | 66,825,599 | 9,215,672 | ||||
| Impairment of long lived assets | 56,212,849 | 2,900,000 | 2,900,000 | 399,928 | |||||
| Impairment of goodwill | 91,236,480 | ||||||||
| Share of (gains) losses in equity method investments | -75,125 | 445,618 | 341,265 | 786,883 | 108,516 | ||||
| Non-cash lease expense | 41,659,260 | 64,053,832 | 70,769,259 | 134,823,091 | 18,592,954 | ||||
| Loss from disposal of a subsidiary | 13,944,925 | 1,223,952 | 1,223,952 | 168,791 | |||||
| Interest income | -262,334 | -390,378 | -1,267,532 | -1,657,910 | -228,636 | ||||
| Bad debt expense | 340,846,428 | 12,359,278 | 6,320,196 | 18,679,474 | 2,576,017 | ||||
| Losses and impairment (Gains) on equity securities held | -21,687,584 | 4,536,562 | 263,836 | 4,800,398 | 662,005 | ||||
| (Gains) losses on disposal of property and equipment | 3,050,035 | -113,587 | 341,428 | 227,841 | 31,421 | ||||
| Foreign exchange (gains) losses | -12,024,153 | 987,543 | -2,075,742 | -1,088,199 | -150,070 | ||||
| Share-based compensation | 271,139 | -11,636 | 40,228 | 28,592 | 3,943 | ||||
| Common control acquisition | 519,360 | 257,546 | 257,546 | 515,092 | 71,034 | ||||
| Changes in operating assets and liabilities | -65,089,156 | -6,084,179 | -86,198,991 | -92,283,170 | -12,726,431 | ||||
| Net cash provided by operating activities | 143,935,937 | 165,533,745 | 147,574,911 | 313,108,656 | 43,179,657 | ||||
| Investing activities: | |||||||||
| Purchases of property and equipment | -30,771,557 | -34,116,117 | -37,617,117 | -71,733,234 | -9,892,465 | ||||
| Purchases of intangible assets | -60,215 | -42,454 | -309,827 | -352,281 | -48,582 | ||||
| Proceeds from disposal of property and equipment | 2,288,823 | 6,973,574 | 7,723,107 | 14,696,681 | 2,026,765 | ||||
| Purchases of investments | -48,860,000 | -51,370,000 | -51,370,000 | -7,084,247 | |||||
| Proceeds from investments | 506,295,349 | 110,300,378 | 61,142,806 | 171,443,184 | 23,643,096 | ||||
| Loan advances | 94,927,368 | 27,302,903 | 48,235,746 | 75,538,649 | 10,417,256 | ||||
| Loan collections | -200,868,160 | -8,029,596 | -1,945,000 | -9,974,596 | -1,375,560 | ||||
| Net cash (used in) provided by investing activities | 322,951,608 | 102,388,688 | 25,859,715 | 128,248,403 | 17,686,263 | ||||
| Financing activities: | |||||||||
| Distribution to the shareholders | -40,999,458 | ||||||||
| Loan from non- controlling interest | 300,000 | ||||||||
| Repayment of short-term borrowings | -169,100,000 | -136,600,000 | -17,800,000 | -154,400,000 | -21,292,734 | ||||
| Proceeds from bank borrowings | 25,300,000 | 117,000,000 | 117,000,000 | 16,135,038 | |||||
| Capital contribution from non-controlling interest holders | -1,600,000 | ||||||||
| Net cash provided by (used in) financing activities | -186,099,458 | -19,600,000 | -17,800,000 | -37,400,000 | -5,157,696 | ||||
| Effect of exchange rate changes on cash and cash equivalents | 649,388 | -40,524 | 383,575 | 343,051 | 47,309 | ||||
| Net (decrease) increase in cash and cash equivalents | 281,437,475 | 248,281,909 | 156,018,201 | 404,300,110 | 55,755,533 | ||||
| Cash and cash equivalents at the beginning of the period | 385,452,920 | 734,629,202 | 734,629,202 | 101,310,000 | |||||
| Cash and cash equivalents at the end of the period | 666,890,395 | 982,911,111 | 156,018,201 | 1,138,929,312 | 157,065,533 | ||||
| GreenTree Hospitality Group Ltd. | |||||
| Unaudited Reconciliation of GAAP and Non-GAAP Results | |||||
| Six Months Ended | |||||
| June 30, 2022 | June 30, 2023 | June 30, 2023 | |||
| RMB | RMB | US$ | |||
| Net income | (384,515,218) | 177,327,013 | 24,454,513 | ||
| Deduct: | |||||
| Other operating income | 5,043,707 | 14,670,917 | 2,023,212 | ||
| Interest income and other, net | 24,042,558 | 17,379,351 | 2,396,722 | ||
| Gains from investment in equity securities | 21,687,584 | - | - | ||
| Share of gain in equity investees, net of tax | 75,125 | - | - | ||
| Other income, net | 14,751,769 | 74,969,507 | 10,338,768 | ||
| Add: | |||||
| Other operating expenses | 4,289,654 | 7,834,218 | 1,080,388 | ||
| Other general expenses | 490,619,710 | 15,973,584 | 2,202,858 | ||
| Income tax expenses (benefits) | (46,658,590) | 50,950,083 | 7,026,338 | ||
| Share of loss in equity investees, net of tax | - | 786,883 | 108,516 | ||
| Interest expenses | 17,441,575 | 9,396,530 | 1,295,841 | ||
| Depreciation and amortization | 79,849,031 | 66,825,599 | 9,215,672 | ||
| Losses from investment in equity securities | - | 4,800,398 | 662,005 | ||
| Adjusted EBITDA (Non-GAAP) | 95,425,419 | 226,874,533 | 31,287,429 | ||
| Six Months Ended | |||||
| June 30, 2022 | June 30, 2023 | June 30, 2023 | |||
| RMB | RMB | US$ | |||
| Net income | (384,515,218) | 177,327,013 | 24,454,513 | ||
| Deduct: | |||||
| Government subsidies (net of 25% tax) | 1,251,065 | 6,671,305 | 920,015 | ||
| Gains from investment in equity securities (net of 25% tax) | 16,265,688 | - | - | ||
| Other income (net of 25% tax) | 11,063,827 | 56,227,130 | 7,754,076 | ||
| Add: | |||||
| Share-based compensation | 271,139 | 28,592 | 3,943 | ||
| Losses from investments in equity securities (net of 25% tax) | - | 3,600,299 | 496,504 | ||
| One-time fees and expenses | 4,588,086 | 2,055,989 | 283,534 | ||
| Other general expenses | 490,619,710 | 15,973,584 | 2,202,858 | ||
| Impairment charges and provisions for other assets | - | - | - | ||
| Core net income (Non-GAAP) | 82,383,137 | 136,087,042 | 18,767,261 | ||
| Core net income per ADS (Non- GAAP) | |||||
| Class A ordinary share-basic and diluted | 0.80 | 1.33 | 0.18 | ||
| Class B ordinary share-basic and diluted | 0.80 | 1.33 | 0.18 | ||
Hotel Operational Data
| June 30, 2022 | June 30, 2023 | |
| Total hotels in operation: | 4,669 | 4,108 |
| Leased and owned hotels | 67 | 65 |
| Franchised hotels | 4,602 | 4,043 |
| Total hotel rooms in operation | 332,073 | 303,387 |
| Leased and owned hotels | 6,986 | 7,137 |
| Franchised hotels | 325,087 | 296,250 |
| Number of cities | 367 | 357 |
| Quarter Ended | ||
| 2022 Q1 | 2023Q1 | |
| Occupancy rate (as a percentage) | ||
| Leased-and-owned hotels | 52.6 % | 62.9 % |
| Franchised hotels | 60.2 % | 71.9 % |
| Blended | 60.0 % | 71.7 % |
| Average daily rate (in RMB) | ||
| Leased-and-owned hotels |
199 |
229 |
| Franchised hotels |
152 |
166 |
| Blended |
153 |
167 |
| RevPAR (in RMB) | ||
| Leased-and-owned hotels |
105 |
144 |
| Franchised hotels |
91 |
119 |
| Blended |
92 |
120 |
| Quarter Ended | ||
| 2022 Q2 | 2023Q2 | |
| Occupancy rate (as a percentage) | ||
| Leased-and-owned hotels | 57.1 % | 74.6 % |
| Franchised hotels | 62.3 % | 77.9 % |
| Blended | 62.2 % | 77.8 % |
| Average daily rate (in RMB) | ||
| Leased-and-owned hotels |
217 |
255 |
| Franchised hotels |
145 |
179 |
| Blended | 147 | 181 |
| RevPAR (in RMB) | ||
| Leased-and-owned hotels |
124 |
190 |
| Franchised hotels |
90 |
139 |
| Blended |
91 |
141 |
| Number of Hotels in Operation | Number of Hotel Rooms in Operation | |||
| June 30, 2022 | June 30, 2023 | June 30, 2022 | June 30, 2023 | |
| Mid-to-up-scale | 528 | 438 | 47,347 | 42,338 |
| GreenTree Eastern | 201 | 217 | 22,402 | 23,205 |
| Deepsleep Hotel | 7 | 7 | 467 | 534 |
| Gem | 52 | 54 | 4,728 | 4,873 |
| Gya | 66 | 70 | 5,639 | 5,904 |
| Vx | 81 | 90 | 7,069 | 7,822 |
| Urban Garden and others | 121 | - | 7,042 | - |
| Mid-scale | 2,999 | 2,933 | 233,950 | 229,270 |
| GreenTree Inn | 2,183 | 2259 | 180,255 | 181,015 |
| GT Alliance | 521 | 545 | 37,545 | 39,091 |
| GreenTree Apartment | 19 | 21 | 1,260 | 1,351 |
| Vatica | 110 | 108 | 7,969 | 7,813 |
| City 118 Selected and others | 166 | - | 6,921 | - |
| Economy hotels | 1,142 | 737 | 50,776 | 31,779 |
| Shell | 648 | 737 | 28,030 | 31,779 |
| City 118 and others | 494 | - | 22,746 | - |
| Total | 4,669 | 4,108 | 332,073 | 303,387 |
Restaurant Operational Data
| June 30, 2022 | June 30, 2023 | |
| Total restaurants in operation: | 280 | 218 |
| Leased and owned restaurants | 146 | 104 |
| Franchised restaurants | 134 | 114 |
| Number of cities | 81 | 66 |
| Da Niang Dumplings | 245 | 182 |
| Bellagio | 35 | 36 |
| Total restaurants in operation: | 280 | 218 |
| Quarter Ended | ||
| 2022 Q1 | 2023Q1 | |
| ADT | ||
| Leased-and-owned restaurants | 170 | 143 |
| Franchised restaurants | 95 | 81 |
| Blended | 130 | 110 |
| AC (in RMB) | ||
| Leased-and-owned restaurants | 51 | 61 |
| Franchised restaurants | 39 | 46 |
| Blended | 46 | 55 |
| ADS (in RMB) | ||
| Leased-and-owned restaurants | 8,640 | 8,716 |
| Franchised restaurants | 3,712 | 3,745 |
| Blended | 6,027 | 6,080 |
| Quarter Ended | ||
| 2022 Q2 | 2023Q2 | |
| ADT | ||
| Leased-and-owned restaurants | 92 | 142 |
| Franchised restaurants | 56 | 86 |
| Blended | 78 | 120 |
| AC (in RMB) | ||
| Leased-and-owned restaurants | 60 | 61 |
| Franchised restaurants | 45 | 46 |
| Blended | 52 | 53 |
| ADS (in RMB) | ||
| Leased-and-owned restaurants | 5,505 | 8,657 |
| Franchised restaurants | 2,503 | 3,936 |
| Blended | 4,051 | 6,371 |
[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB 7.2513 on June 30, 2023 as set forth in H.10 statistical release of the U.S. Federal Reserve Board.
[2] Adjusted EBITDA (non-GAAP) is calculated as net income plus other operating expenses, income tax expense, share of loss in equity investees, net of tax, interest expense, depreciation and amortization, losses from investment in equity securities and the provision for bad debts, but excludes other operating income, interest income and other, net, gains from investment in equity securities, share of gains in equity investees (net of tax), and other income, net. The calculation of Adjusted EBITDA (non-GAAP) included in this report has been aligned according to the abovementioned definition.
[3] Core net income is calculated as net income plus share-based compensation, losses from investments in equity securities (net of 25% tax), one-time fees and expense and asset impairment/accrued bad debts but excludes government subsidies (net of 25% tax), gains from investment in equity securities (net of 25% tax), and other income (net of 25% tax).