GHG - Earnings call transcript Q4 2021 | GreenTree Hospitality Group Ltd.

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Operator

Good morning, good afternoon, and good evening, and welcome to the GreenTree Hospitality Group Limited Fourth Quarter and Full Fiscal Year 2021 Financial Results Release Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. to conference like Vanguestaine. to now would turn over the Rene I go Please ahead.

Rene Vanguestaine

Hello you is and GreenTree's you, services. as everyone Thank Matthew. PR on thank IR at was Newswire earlier well as our earnings distributed for today on and available website ir.XXX.com, release us. joining

As website. that our a posted to comments presentation we PowerPoint also the reminder, a accompanies same IR

the Vice Officer; Officer; are Xu call Alex your Xu, and IR Huang, by Executive from Ms. Ms. Ms. questions Chief session, which Financial during company's be Chief and Huang, operations, then GreenTree Zheng, Mr. overview, will will of business Marketing; Ms. the financials will and Yang, On the discuss Q&A and Selina discuss Nicky QX XXXX Sales follow. Yang and guidance. President will performance Megan Chairman present answer who to Mr. followed They will Mr. Director. available

believes, differ which expects, can are company's aims, which and of may, similar materially relate to and including that Such These market current known of that as by from future, begin, facts, statements statements or current to the predict, historical the the of conference expectations amended, company's remind industry, Securities statements. statements. I'd will, management's to Exchange and in Act likely target, as uncertainties, unknown continue, you statements performance, Act terminologies forward, XXXX. XXXX, Before intends, operating meaning risks, involve such many difficult identified control, of the beyond not which are be confident, outlook, upon is forward-looking forward-looking and to cause statements Reform results, and achievements of forward-looking Litigation events conditions Securities and plans, and Private statements this XXE actual are other in defined based the estimates, about company its are those Section are or within and factors, that like the we going forward-looking U.S. as contains and all anticipates, call to, statements. of the may are Any

undue law. and in date. or factors You filings information The other are company's Xu. future a of obligation All Officer, Further should undertake U.S. go with and not included Commission. this or is company does Xu, pleasure the information, please is introduce risks, It during our and the to reliance forward-looking call, provided, Chairman not statements. as as ahead. the applicable conference uncertainties, regarding as information my update statements any Exchange forward-looking of on these otherwise, any events, place including statements today's Mr. new to now current made except under Mr. Alex forward-looking these required Executive result Chief Securities

Alex S. Xu

call. you thank and phone today's everyone, Hello joining Rene. Thanks, us for for

in recovery variants management. COVID-XX the First, we Facing way brand, these the our development to lockdowns. terminate our and of for a of support innovate and pandemic a quarter's our apologize time, last Slide business the earlier turns a new earnings to opportunity all of cases sustainable accidentally pandemic, call call. over. was the promote not call further opportunities, want and turn changes, the surge the hope, with actively the full have paved twists termination and we of once operator changes to the seized the will accidental during XXXX intermittent challenges, X. finally the and digital franchisees, believe is of the for Please We year We earlier. emergence strong this that virus and the phone

Slide RMB a decreased a million, XX.X%. X.X%. XX.X% income quarter. that XXX.X million, margin the provided XX.X% RMB decreased XXX, impacted Net year margin the the operations in adjusted QX in adjusted meet RMB share to a quarter. decreased to Compared per the XX.X numbers is X.X% EBITDA. total last total income, revenue operating XXXX, income, our and China. with On increased RevPAR X.X% with RMB performance previous quarter XX.X% XX.X% for was total XX.X%. to XX.X detailed million, with fourth the Slide to XX.XX RMB to resurgence earnings our with of decreased X.XX. net COVID-XX million. from given million, with EBITDA to Non-GAAP of guidance slightly of for RMB for X,XXX.X X operating of in worth the various revenues RMB satisfied XX.X% It are increased revenue, X, And mentioning Income shows margin year-over-year of full We performance decreased revenue parts to

this rate of at to the and only tourism occupancy XX% performance to a the year. strongly to respectively, Chinese It X a in domestic in New boom XX.X% and We the at XXXX, quarter May with beginning and the after to better as to shows average. the then last week leading the levels, finish RevPAR at hospitality the through of XX.X% Year versus RevPAR beginning than due recover performance over COVID-XX XXXX of in RevPAR a reunions week started all recovered the XX.X%, weekly recovered several drop XX.X% recovered in December. in industry. way drop family year trended the cities. fourth XXXX. of resurgence RevPAR seasonal to first of the Our of gradually industry Slide November to recovery, October, to cases the actually After subsided historical

cities increasing again. number downtrend another since round variant Jilin affected home. Olympics Province decline by down further and April However, Omicron being XX% that locked to that millions May. early of resulted it in in major further started at Shanghai confined RevPAR was some outbreaks This residents in to the have in of reintroduction caused and in March COVID-XX March outbreaks of and Prolonged and during down Winter travel cases sent of restrictions the the

of we of under can believe partners various We, our approximately we customers' Omicron-related a outperform market governments, continue total remains While stable and our income. the portfolio. China's our of due by to around Currently, lines. across domestic XX.X% requisition business under infections, pressure franchisees, industry hotels to wave XXX are

we ways, many them an franchisee loans eliminating interest in management providing including addition, and at and reducing attractive support rate. recurring fees In

are the prevention quarantine stations. meals also of including to supporting and personnel. to calls pandemic actively staff We taking supplies responded and prevention hotel our volunteers delivering charge reception measures food control of with staff government pandemic tasks, observation and of the prevention the undertake and quarantine water and the and pandemic Furthermore,

in execution and the segment with X to well expansion with XX, in Now, upscale brand talk and the let's Slide mid South strategies starting about lower renovation. and cities Tier as the as China, and further Southwest

XX. Slide Let's take a look at

growing these more XXXX. to mid the the this of segment total We segments to been past our increased luxury have in segments fourth XX. over these our to quarter, Slide few years. compared plan had And the hotels We and hotels XX of upscale XXX, by in to turn end continuously open portfolio, year. the XX.X% in only with Please

cities the the Tier have in new faster have in they in been past other quarters. most cities, and lower hotels most five Over recovered of where X China's than rising our years,

performing of those smaller In a lower-tier well, are cities with addition, number hotels some rooms. especially in

substantial As in we and hotels in in the are execute our such will current of to capitalize cities, pipelines such strategic we new continue on locations. our further XX.X% opportunities all plan,

Let's XX. have a look at Slide

for process trend, recent we provinces and into Sichuan, Southeast, map COVID-XX. to made both of We operation, mid Shanghai, we turn with performance These RMB XX XXX, new and Southwestern now gamers renovation in type even to next The other reducing than our target Slide to Central, occupancy local Please Jiangxi, market have and L&O in the rates our XX need XXX us provinces, XX around and The an hotels have for possible we during ADR it around XXX%. These have hotel this Chongqing, days, to typically usual accelerated innovations F&M growing hotels step e-sports XX. guests During expansion record franchisees. openings. segment quarters, launched complete e-sports the expansion the XXX a in Hubei, and markets. for been to and our hotels the has the footprint Furthermore, e-sports brand costs hotels into shows RMB experience. answer called over renovation better Responding further additional upscale to within allow a months. hotels. of including

seven us We road hotels no in also in but enabled introduced is an the our put has operating past changing The two personality to Hotel, control years, segment it changes measures a that cost a to rapidly to these we embodies innovative the quickly all Geli faster in new have grow by Hotel efforts over and operation. implemented industry brands. strong brand, of have post-COVID-XX. lies currently straight. All our efficiencies improve environment, position is adapt means and In and market ahead, recovery to us in mid-tier Geli vitality. positioned strict to

will highly team model while our and thanks accumulated resilient experience and flexible forward, business the trends our Going have to remain capture growth to emerging adaptable we market and combatting that opportunities, and franchisees COVID-XX.

me Megan. the let turn call Now, to

Megan Huang

fourth in XX, X.X% XXX our the to Slide to decreased impact RMB XXX. opened X.X% to Alex. quarter, increased than to rebound due from ADR occupancy and We rates the of which COVID-XX. hotels Thank XX.X%, Blended less of turn decreased the the in year-over-year operating Please you, COVID-XX. XXX, margins highlights to new X.X% RevPAR the planned impact RMB

had SlideXX. and At the of more L&O than franchised-and-managed, our fourth or of operations, before. F&M, the the X,XXX we the X,XXX were year end quarter, were Sixty-six X.X% Moving or hotels; hotels. these leased-and-operated, hotels in to hotels

our total By mid-scale of of while hotels, stable expansion remained to end of XX.X% hotels quarter, we the at core XX.X%. our segment the portfolio, into the mid remains economy fourth higher-end upscale our continued and the luxury the segment segment. the accounted XX.X% with of While for the all the business,

Tier the third mentioned, quarter. of see XXX the economy Slide Three solidified in hotels already can and XX Alex our mid market, quarter our in were lower upscale in dominant remaining of the in in we end and our in and segment, of upscale X XXX the position were Slide the luxury X XX XX mid hotels, XXX the cities. performance. at lower shows cities, quarter segment, located segment, XX mid-scale due XX -- the of closed were operating XX, also opened hotels and of due noncompliance The XX.X% to XX Tier operating quarterly a XX property-related to our the of added XXXX. segment. XX the the compared XX with trend the in in and where issues. the China, to Tier closed to standards. Tier portfolio. cities, opened luxury rent net X were in hotels cities, the we and to in XX.X% We in X you We the were in segment remaining On to XX that of XX hotels As the hotels our

X.X year-over-year the in million for hotels members million from RMB members which XXX. F&M sales increased to to XX ago; our XX XXX. to fourth our Slide RMB increased L&O to For our hotels up XXX. grew up XX RMB hotels our XX.X%. ago. and the to the comparison, in RevPAR quarter, L&O direct to for corporate Individual L&O accounted XX% a highlights year and and F&M RevPAR of ADR increased for for at in a XXX, grew F&M year our XX.X%, our from to at most decreased hotels occupancy membership X.X growth RMB the hotels decreased million, to in million, ADR our hotels for programs, decreased Occupancy quarter.

by call With the of booked of nights the pass percentage in over industry. highest to CFO, one I'll Selina individual have the corporate our room members We and that, Yang.

Yiping Yang

utilities attributable and for capital the lower of were In marketing impact year-over-year total XX.X%. quarter, hotel XX.X XX Please L&O our RMB to our XXX.X one-time that's we Slide and XXX.X since consumables, compensation, the hotels were ramp-up to million. The XX.X% XX.X% of XXX.X hotel our decreased mainly bad to decrease L&O decrease opening the year-over-year revenue mainly of fees administrative XXXX. decrease F&M higher our and hotels hotels markets the hotels X.X%. total that's one-time XX which attributable and to XXXX, of was with and in the during XX.X% you can depreciation In expenses RMB Megan. of see compared fourth see XX. were and million, a turn hotel newly leased-and-operated quarter quarter, can the from million, the we On X.X% XXXX, in up expenses XX.X% year for and fourth increased higher was increased L&O hotels opened you, to of excluding consulting for and The Total million. increased advertising expenses. Slide operating increase resulted expenses excluded debts higher year-over-year. consulting in year-over-year by hotels that's was million, impacts year-over-year, that's If our the increased L&O RMB administrative operating RMB from increase XX.X% The beginning opened newly were revenue million, General XX, of RMB that to fourth Selling was costs beginning fees, increase. XXXX. our costs the Thank XXX.X RMB XX.X%. general XXXX, rents, If the XXX.X advice, total revenues opening XX.X headcount million, mainly the higher increase costs RMB the higher costs. staff amortization, since attributable a up and operating to while

Slide opened during for of exclude from also was L&O mainly million, hotels year-over-year impact income XX%, was by the loss XXXX XXX margin period hotels, attributable ramp-up COVID-XX. to increase RMB newly a Turning a to their XX operations newly of L&O decrease that's of million, recorded operating XX.X% with the a opened the income of If and year-over-year. downsized was due fourth to of we XX.X%, operations margin XX, RMB quarter XX.X%. from With the the

These If Adjusted net X.X%. with income income to with decreased decreased XX.X to were and adjusted adjusted for and our million, of our XX.X% newly with XX.X%. million, the EBITDA XX.X%. XXX.X decreased pipeline. slide, net same to XX.X margin of net RMB the a of impact million, both the with newly we margin quarter a was XX.X%. and hotels, XX.X in margin EBITDA L&O also decreases EBITDA a our hotels, exclude RMB adjusted mainly opened RMB increased million, On the with EBITDA attributable fourth Core income opened number in of RMB was non-GAAP margin of

turn a please, $X.XX diluted, XX. per ADS, and ADS to was Net net that's X.XX, was let's income core X.XX. income Next, U.S. RMB Slide basic per and non-GAAP RMB

look a XX. take Slide now Let's at

As for and cash, The XXXX million by as in offset total parts securities X,XXX.X XXXX prior our XX, grow the revenues X% franchisees. December the equity XX, RMB to of time deposits Slide XXXX, by On full restricted total quarter expect of was RMB to to costs investments, value outbreak of the had cash equity the and China, of changes in XXXX. compared cash acquisition the L&O increase continuing of of hotels, of we in over to loans million, fair given various COVID-XX X% year the to shareholders, attributable XX, the for and September and dividend securities, mainly short-term company X,XXX.X drawing levels. to equivalents, from down distributions investment facilities, of bank

a may over we that repurchase of months. the prepared concludes XX $XX announced the which to Q&A repurchase Operator, the now our slide, begin authorized remarks. ready program, next company Directors the session. million to on has next share Board we our U.S. On up also are This

Operator

you. [Operator Thank Instructions].

Your from question from Please Morgan go first ahead. comes Xu Stanley. Dan

Dan Xu

hear Hi, good morning, Can me? you everyone.

Alex S. Xu

you. Yes, Dan. Thank very clearly,

Dan Xu

questions, question. I Can So, Alex, you. if to sense of are was net XXXX first? just relating much hotels planning to currently question XX Thank the morning, in just the first my new the you I first ask of first question was going in so saw the get opening want I many I for three under forward? Selina. Megan, L&O we presentation. I Good how was have and That and hotels. hotels Thank may. a that my XXXX. L&O

Alex S. Xu

plan Thanks, any XXXX. to the hotels Dan. be And, are identified the going L&O opportunity not The pipeline to XXXX -- and L&O XXXX, to of yet I new six do in hotels. we think, add There's already. number in Those we Dan, significant be opened.

if there a we is restrictions, fall. -- and there the the added rates the why at reason time in will chart of is travel Slide trend L&O X, a you clear need you travel hotels the this there in Now, that you XXXX of occupancy list more every have rebound that the look see are

So, The very the demand strong. strong. very demand underlying is is

a will think where, consumption fundamentally. the that sort also compensatory and pandemic of have opportunities and very is first area is traditionally, of the program in thought several new there in growing so, Chinese I that do there. behavior prevention we domestic travel think the effective tourism we market market were be healthy And identified We the XXXX, slower. quarter the very

of by hotels And the those March COVID in the we're during the second of during we the will cause China, China, regions, L&O as of not growth year new do well. half accelerate or of picking -- XXXX. able to you variant our those and especially February so, know, travel up several first hotels' the first Southwest especially of And expect half in implement the major F&M -- the cities during to restrictions and Southeast

a the you XXXX. as performance anticipated the we've L&O quarter such result, in our hotels, the number not know, As the of achieve second peak had did

or the the the the strengthen our up in South China. L&O -- in for substantially that's the China our XXXX rationale of more our quarter also of of we first behind part of area weak Southwest and So, completed the part position of our goal hotels traditional picking plan XXXX the in because to brands

Dan Xu

noncompliance year, many full of quarter about my was remind impact the a due -- you. may, many first and for question closures you for the the XXXX our closures. you if XXX Thank much use and were how how were consider COVID Thank XXXX it what the situation, those us we you. and Can was Thank have XXXX? hotel I can many property how ask, was know and one-off I closure similar that second you, should now Alex. be due I closure given COVID should to how If to was due the current XXXX, to data to

Yiping Yang

to Okay and the opened our a among closed more of make issues. hotels we our with have none to And standards our of all standards. hotels all due line COVID-XX, standard property last them year operational for the we because you, thank hotels to closed near sure last the were Dan. the in license in due hotels the higher closed XX% to are in Actually, all the year,

Alex S. Xu

The --

Dan Xu

OK.

Alex S. Xu

further. will I little elaborate a Dan,

So, the make total all number for of find main higher to us standard ask the you of hotel shortly. our reason also hotels with trying hotels exploratory we we will have to I is The higher. required we have several, closed the of closed operating in the -- total Selina number permits.

have been requirements. the all we standard So, in our increasing permission

mentioned Selina As you, result hotels, relevant that, them as permits. possessing a to to -- the half due about the of we not of the closed all

The reason have that hotels. fewer to closed we is second pandemic, that the prior

some the that the hotels XXXX. the -- And most to closed pandemic some leases, already that's -- in more reason And many ages. the required leases. them. during that the the because closed the and the permits, substantially not to and standard also caused renew we anymore, we then as standard of So, -- don't owners -- close has the faster aging to expect longer, We in know, XXXX, the of extend hotel we hotels second you the not pandemic wanting are is conforming

Yiping Yang

of Dan, total hotels. year, number for closed XXX Yeah, last yeah. we a And, the

Dan Xu

chains the If much, about quick I two the about so was and recent may, proposal you Selina. Thank acquisition my question China. in Alex potential of fast-food nonbinding GTI from last

think some business, this much Just about and please? should we we fast-food without hospitality how -- GreenTree's the proposal, thoughts too about or the synergy around business, hotel some chains, if get can revealing with details, highlights this

Alex S. Xu

moment, no special the to don't evaluating share at this one. news have still proposal, -- any so is that we for this Dan, committee is -- with this everyone there's

Dan Xu

you, Thank you. Alex, the Thank problem. and no management. Sure,

Alex S. Xu

Thank you, Dan.

Operator

you. Thank

Your go Cheung question Simon ahead. Sachs. from Goldman Please comes next from

Simon Cheung

also presentations. the of for everyone. couple Hi, Thanks questions. a have I

to as compared franchisees Obviously, One, a Just you RevPAR of evens how I guess RMB acquire break leased-and-owned. leased-and-owned hotel into you're mentioned, I back help able doing better XXX-something. so-called kind these I I've to question. already at more basically leased-and-owned What franchisee get being hotels? RevPAR to your expanding to guess at would wanted sufficient to the and several of did supports the maybe hotel, of that's things. the seen leased-and-owned sense the for be strategies. addition the first or you

I more have on. I two follow-up think later

Alex S. Xu

is later. can the I to cash Okay, flow hotels. think be breakeven side that XXX, further -- we performance the that but typically have the to going in L&O XXX add Selina the -- And for

hotels have those The roll to we second in reason of didn't up where those we in is because hotels. those set we're these example trying areas an cities, those -- model

And that, And model people's of the so, L&O doing we our the a in of staff, increased number further hotels. [ph] show help those growth franchisee a our then, accelerate us to -- those standardized accelerate showing cities it franchisees those hotel have and will by to hotels, by created staffs. -- performance and with

it And some renovated, the not created we positive have L&O still, but influence. has hotels very that of fully

we've by your more all you hotel hope As traditional answered growing can XX% a cities. of those portfolio weak in I in than result, question. been those areas, our see I

Yiping Yang

more the like years, two Okay, newly actually, I We opened add of last of to XXXX. opened second hotels and the L&O quarter would most in in XX comments. them

in are loss construction. that pipeline, included or the needs our under But this number second nearly so full year. book those and a quarter, hotels operate actually, XXX of the rentals new since recorded whatever hotels, they're the all to that's of RMB paid total our for each operation in book million for X,XXX we loss So, -- quarter, hotels RMB those a the

hotels standards, If according XX to the standards. exclude -- recorded was of our mean, million. impact accounting decline, RMB new rental actual L&O losses these I less that's we this So, our for than

Simon Cheung

that I bit situations? second that, the you paying my of up, the quantify debt maybe that. last franchisee just to and, be on must more how issues. question, the over the then mentioned rate months, And given you that trend guess you in about tax a stuff. are Understood. related seeing of and what's couple how you a elaborate the a bad percentage terms maybe Thanks Can of to trying pick the COVID for

Alex S. Xu

I didn't Can all the Simon, quite catch repeat? you questions.

Simon Cheung

Yeah. Yeah.

So, I listened you just had there's comment earlier made bad Selina, provisions some made. that debt being about

a got two, bad can what's I look would haven't a We debt to provisions one, be bad last financial you get that Thank chance that wanted that helpful? sense, seen and to you. the but the that into and trend over debt related quarters, you maybe also to; couple have quantify of the

Yiping Yang

Okay, yes. you. Thank

flow, process, decorating or a cash you for hotels. and the our standard million. are year loans. last to was are assist our a match the of financial they for during franchisees central the assigned That's our in about of our we our our completed franchisees X our find because back many who this Or And most occurred also loan provided decoration -- their -- prove -- first fourth institutions the team their the franchisees. to -- have its maintenance franchisees' and to support quarter three has to have quarters For year, franchisees RMB in Actually, may account year. franchisees

of franchisees support institutions from financial So company. -- and our instead could co-operated our most get our of financial

is million, the month fourth year. decreased reasons franchisees. receivable, or last A the impairment debt, due the debt. that's that's find why about bad franchisees -- accounts receivable, you half of age quarter of loans due to accounts a to of the why them our since were bad two are And and sharply to of your lot decreased of So, second half will that's XX question

thank you. Okay,

Simon Cheung

I guidance, that. the revenue then understand RevPAR the expectations? to for perhaps guidance for is year. X% versus Could Thanks at to Great. year-on-year full you to last X% that us help between And question your hotel maybe your guess breakdown my back

Yiping Yang

may as May. of find a over forecasted due and full April much quarter of our impact for the the first the we in was you percentage year during COVID-XX, year our positive increase, higher for maybe guidance XXXX. Okay, not to especially But the and the XXXX,

we in third year. was a full during assumptions, So, still but year the quarter, our good. we And the until bit for fourth we year second expected expected was worst XXXX not And the XXXX. excuse assumed -- the But performance little of the recovery season quarter our actually, as of quarter, was the fourth the in good. we the know nearly same the quarter me, not,

of So, that's XXXX. expected -- our of we such operation year for performance the XXXX why trend

full So, for the that's year. non-aggressive a forecast

over we our the much increase think So, we better year. expectation, than is Thank than for if full may COVID-XX earlier and industry expectation whole you. may forecast our recover our the

Simon Cheung

lot, Selina. Alex a Thanks Great. a Thanks and lot.

Operator

[Operator Thank you. Instructions].

Your next of question comes from Billy Ng from Bank America. Please ahead. go

Billy Ng

Selina. Good Alex and morning, Hi.

doing them? assume -- like are are being those being and sense the and well. as of especially just requisite, them are many hotels leased-and-operated to a hotel the for being how of hotels, they many are collecting you relatively are wanted management requisite, they they on I And are requisite, our being get current from if are questions situation. secondly, quick Just I lockdown how fees -- requisite are

guess ultimate like much L&O my the So, question how situation, I the loss or drag from is during hotels? fee Yeah. of current or a a

Alex S. Xu

Thanks, Billy.

that in think are about in franchisees. portfolio, do XXX of hotels not the number collect the of [ph] hotels. they use we government, the now past I until Typically, believe, fees of the by hotels more the than from XX.X%, requisited our franchisees any Regarding I in our being

able the that of sent. that's hotel the franchisees more as sort hardships those are to some and So, hotels. have government income a loss of that that primarily and get rationale they they local And royalty management the is the experienced fees for use quarantine the from and some a generate to

for to we franchisees about or the government program, be amounted close in our as collect fees And year. fees. probably of more the and XX we those past, support as decided So, million a support prevention a a to not do those that pandemic we

depending then a but on have numbers. how the lot reason -- -- think have think the than hotels. is -- difference a Shanghai, I the more I by I calculate how -- the that. I except requisited is is and think hotels quarantine under forgot government question -- second the that to so the the requisite. our -- that's So, second reduction the L&O lot the hotels have two, of more been you hotels In And we I that many except L&O -- all have we

income -- hotels. for stable quarantine the the is non-quarantine much So, more the hotels, the revenue than and better much

last control the third second very is will expect depends company. allow the question on we reopen hopeful restrictions to in the L&O it can quarter a reduce the performance? lifted, as are assuming to and So, of that still L&O generate the And we will be new quickly the markets really a much will again program, the year, then soon. a which overall the similar of to lifted, that really pandemic cash hotels the the how effectively and how be cases that recovery of you then of positive current restrictions flow the that will And have drag hotels

Yiping Yang

will year, Alex to in the hotels million will quarter thank due Yeah, quarter in of Selina. April, ongoing as quarantine, of find eviction China, the is in were and X of And hotels about This some we regarding of question. fees COVID-XX for fees. you in year, the Actually, mentioned. -- March, this [indiscernible] more fourth resurgence since XXX Billy. hi, the for cities quarantine, Yeah, our the RMB the company especially franchisees about you first were for last

much hotels, So, near be most we've for amount million. quarantine higher. RMB those fees, They're and ongoing they that the exceed -- waived will XX their -- of for

Alex S. Xu

That's than be going more million. roughly to the XXX it's total,

Yiping Yang

Yeah.

Alex S. Xu

fees, For royalty Billy. the

Billy Ng

Thanks. you. thank Okay,

Operator

[Operator Thank you. Instructions].

Don Your China next question comes from Please Renaissance. go Lau from ahead.

Don Lau

Hey, Can good morning. me? management, you hear guys

Alex S. Xu

Yes, Don.

Don Lau

Hi. Yeah. Hi.

I So, quick one have just question.

million like I'm Sorry, $XX so I just guys the but just of now buyback what's But buyback refrained just joined rationale to from -- your the behind program, the share the like buyback, a of you behind kind in wondering share -- some our buyback we what's past, about yet, thinking? have it like late [Question Inaudible] we just I'm just talked conflict. like so, rationale conference because like the on wondering due we that's share wondering, announced

Alex S. Xu

value. this because that through model, we our as believe buyback also we return will of been some -- to continuing the resilient to the shareholders such valuation have shareholders' our the share that we well authorized ability business company believe especially, the we strengthen fight Board the And believe buyback the to repurchase. and of also the pandemic a be The cash as

So, such authorization, made the that's Board why Don. an

Don Lau

this have I about Yeah. issue. threefold the thing

shares our of XX% like, free for only, are that us. Given

in our means XX that's, translate of way, total like So, of the would around into issued people. million a X% our XX% shares, which

any like, on So, thought this?

Alex S. Xu

the buyback depends know it do future, share market, really on the in Don. exactly the We not -- price the

will how the percentage exactly don't many know we So, future totally of in for. that accumulate

Don Lau

Can quick understood. I Okay, one more have question.

to compared who have new acquired let's So, for noticed on a your like just any wondering last franchisees quarter like, downward fourth year? of understanding, rent in properties the your based recently, change the say level you

Alex S. Xu

well, know, -- we you question please can clearly, didn't can rephrase so hear you it? the Don, you

Don Lau

sure. Yeah, Sure.

cutting compared the year? like level, the now level. downward for for any fourth you quarter say, noticed franchisees last in that rent like rent is we're question the Have further compared to, material the let's on my So, change

Alex S. Xu

the with last, property. compared of the see Okay, second last has before competition And you than event in always we And in event stayed the properties, -- getting in that year, lot fourth-tier some a and is quarter we the stable. terms relatively the certain of top is adjustment year. especially noticed to less do the not cities, has third stayed rent in last know,

so especially the and COVID first I think do them and half the year. And the about this last rent some rent doing believe franchisees quarter the of to we rent. result by second least, that, are fourth We year control in And are in -- taken the third didn't hotels a of see of sentiment by wait in there affected more quarter, we investment is quarter. similar started got we the somewhat the about and At doing quarter, measures. levels we the last franchisees for new any increase as see. see are lot a cautious

market, observation the So, the Don. in have we that's

Don Lau

clear. Thank management. They you, Okay, are got it. very

Operator

Thank you. [Operator Instructions].

ahead. Please next go comes Zou Your question from Yaren [ph] UBS. from

Unidentified Analyst

they that Hi, the thanks. brands question have I Jinjiang for regarding [Inaudible], management. low-tier Okay, we all can and have a competition because cities. see

Jinjiang Days, has has For example, [Inaudible]. X [Inaudible] and

Tier with hotels wondering if was in I So, the increase competition this cities? Thanks. our will Tier X X and

Alex S. Xu

there's of closed have Thanks, less being more Yaren. the overall are Absolutely. even the major And those our penetrating number the will be being of plus, opened cities, increased. corporations market to for I hotels and regions, established the hotels with think in brand all that and from and competition competition that brands levels been are more

However, because the more important. in franchisees the the to are lower-tier cities, support even

from design work model to the seemingly to a accumulated value. has at the together lot be So, And the have end. of construction the we experience business to deliver to support the that

this third, lot value pandemic the delivering opening. and that run, see the the hotels in achieve we're in the the have we can versus in hotels the competitiveness franchisees I -- we brands' sentiment growth, the light more of hotels the levels GreenTree's new think we headwind in our moment, hotels confident And reason new franchisees. -- we will from so, cities. deliver especially those the from from we long think we -- the pipeline and levels, that's remain these -- four-tier marketplaces. of And Even I can and the that to demonstrate same the that more between a investors And at value is clearly in can the brands

Unidentified Analyst

Okay, thanks. Very clear.

Operator

over turn Thank closing [Operator like remarks. the to Instructions]. conference back question-and-answer for Selina Yang would I you. any This our session. to concludes

Yiping Yang

interest on management closing, In of your entire we operator. you, call. in for behalf thank GreenTree participation team, and the you today's Thank

have Thank further any you, please to information free reach feel require to you us. us, contact If or plans all.

Operator

Thank you. This attending Thank is you conference now for presentation. concluded. today’s

You may now disconnect.

GreenTree Hospitality (GHG) 14 May 222021 Q4 Earnings call transcript