Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, ladies and gentlemen. Thank you for standing by for GreenTree's Second Half and Fiscal Year 2022 Earnings Conference Call. [Operator Instructions].

As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to your host for today's call, Mr. GreenTree's firm. Christensen, of Vanguestaine Investor Relations Rene Please proceed, Rene.

Rene Vanguestaine

and for joining you, Andrea. you everyone, Hello, Thank us. thank

ir.XXX.com. have We posted at to a accompanies that our PowerPoint comments IR our presentation website

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

I'd XXXX you aims, identified of anticipates, may, as section amended are of and statements conference outlook Before likely including about similar that going confident, such intends, plans, target, industry the as or its will, statements forward-looking the These to, forward, XXXX. expects, estimates, of not to XXE defined can forward-looking Reform are the statements are we Private remind be Any forward-looking historical Act this by that as statements. and is believes, facts, terminologies company within Litigation continue, statements future, statements. begin, Securities contains call Litigation U.S. Act meaning of in and the Securities like

the the performance which the which involve to control, conditions cause to and and and company's based uncertainties are relate are materially unknown current from statements. achievements Such statements of differ are may actual of that forward-looking in factors, which predict and and upon those management's known difficult all results, beyond many other and market or company's expectation to events current operating risk,

should not statements. reliance place on undue forward-looking these You

including company does risks, are filings as currently -- future and current the with to obligation Commission. any All applicable a as any factors in required the uncertainties events statements provided, these new or Further as undertake update is not are information Exchange of law. during information, result conference date. made The other or this included Securities today's otherwise, except U.S. information call under regarding of forward-looking and statements the company's forward-looking

is Xu. our and pleasure my It now ahead. Chairman go Executive to Chief Mr. Xu, introduce Officer, please Mr. Alex

Alex Xu

everyone, thank today. and Thanks, for Hello, us Rene. joining you

posting for I to First, do apology the of PPT, the to want meeting delayed XX the your because the understanding. delays you you thank We make of for was of the minutes.

year change -- a XXXX challenges. of was full and of So

half, lockdown COVID-XX of During the country especially in the first outbreaks in cities many Shanghai. parts in many in resulted

third and the transportation RevPAR restrictions enter quarter, we recovered. were As relaxed

fresh of the relief, to October early to of anti-pandemic outbreaks, to wave November measures again. of year However, the more and thanks brought of of the once XX% our at pre-pandemic slowing And levels. RevPAR recovery December, its recovered than our a end down lifting the

and plan delivering assist healthy changes, Regardless flow. we maintaining quality networks profitabilities franchisees a our extending strives maintaining to external operations, our in that cash stable growth environmental long-term strategic of these to hotel execute operating and continued

Urban decrease disposal Please to since RMB XXX. Argyle in June of RMB of turn with the the to Slide second deconsolidation revenues decreased and XXXX, to XXXX. November million. half on XX.X% X. RevPAR decreased our Total XXX.X of XX, Compared interest The XXXX to X.X% the partially to due was

to these decreased Excluding compared impacts, ago. XX.X% revenues year organic X

Income a margin increased of to X.X%. XX from RMB million, operations

with negative to million, activities decreased operating was purely X.X%. of a RMB with negative of from income a XX.X% income this, RMB the And margin million XX.X%. Excluding XX net XX.X margin

total Slide XXX.X to XX.X%. activities Cash revenues, numbers RMB of provided net by XXX operating decreased Adjusted XX.X% million. for income, as and to were adjusted with EBITDA. operating shows margin non-GAAP million RMB EBITDA a income detailed X

On Slide quarter, at the of of was and during outbreaks XXXX. X, industry the the second XX.X% half COVID respectively, performances exceeding continuously RevPAR and by the XX.X% fourth third the average. impacted XXXX was operating levels in

the quarter XXXX. in of October November. down first the week to and performance RevPAR more again Slide of resurgence of recovered RevPAR compared gradually in slowing third second the XX% the XXXX to weekly the last and of and shows XXXX. than its In of due pre-pandemic in levels RevPAR X fluctuated the with was XXXX, once COVID-XX, half XXXX in quarter

China. control first recovery again January of RevPAR rapid pandemic lifted due in slowed the the were pandemic half during of after to involvement

to over reunions. recovered New Year, around levels thanks However, its XX% the family Chinese pre-pandemic of it to

according and February, the festival, recovery tourists in same XX.X% of Ministry recovered revenues Culture Tourism, to of and the this to of domestic XXXX. in exceeding of levels recovered the the a XX.X% number increase continued During and XXXX. period levels to Such of to tours the the

outbreaks However, in bit A certain of it cities. Influenza pulled in a to back March due little

XX. Slide with starting Now

the expansion the about with in the Da in strategy talk from development China Niang and restaurant Dumplings well the cities the the and X as recent X as XXXX of China in acquisition in leading further Tier Bellagio, under segment our controlling regarding South Let's chains shareholder. mid-to-upscale lower execution on QX

XX. at look a take Slide Let's

past segment We years. mid-to-upscale over continuously few have been growing our the

second XX total XXX the years. Argyle of our the like-to-like up in past the segment, and more of XXXX, only from to By That's of Urban XXXX. hotel will hotels. I few comparison, portfolio in we excluded a XX.X% this we For half in this open the end plan have hotels year. had in

XX. Slide to turn Please

new of thriving in X China's most the cities. Tier -- our in newly lower the Over years, been past hotels have X

to and cities in lower-tier the strategic hotels well, in such execute our of are XX.X% opportunities some such the in hotels plan. and current substantial addition, are will we performing on pipelines capitalize In our further continue locations. in locations

impact soundness of business the to under the past the in over cities. a such years, more panned strategy, of testament much was other COVID As this resilient X cities the our

of trade the recovery the X the first the the investment promotion cities. in However, and government the outpaced commissions, Tier XXXX X Tier and Tiers and lower X quarter shows of in recovery with resumption cities in

been building of XXXX, strategic flagship in the Central market. Southwest QX especially we China Since hotels and all locations, in Southeast on and have

quarter opened Fuzhou high-speed Airport XXXX, X hotels Railstation. Chongqing first high-speed east Jiangbei we the International During of Railstation, LO and in

expansion in areas. hotels districts franchisees, covers operating us our Chongqing believe Hubei, and Our By and around to other showcasing premises, footprint as government well hubs, attract also located as business more well centers. we these help our growth further brand Yanxi, standards, these will accelerating all central high-quality Shanghai transportation or

XXX now and restaurant acquisition of food business. Da Da few restaurant restaurants. with December Niang Dumplings XX, quick Slide during service is a as of chain let restaurants locations completed Niang the XX in and say cities We XX acquisition On XXXX. in XXX self-operated restaurant quarter a me -- The chain about and first of Bellagio XX, words franchised XXXX. Dumplings China of the covering affiliated operated had the

a Southeast Bellagio is a in including cities dining XX XX, restaurant XX Asia. than restaurant with Macau XXXX, December as covering casual in chain of more and the China, locations Mainland

X XX At year, and chain franchised had the the of last end restaurant. the self-operated

million. combined of year of RMB For a revenue brands generated unaudited XXXX, XXX the X about these

a we businesses. such be to stream discretionary stable dining for with this more healthy services dependent provide more stable on less demand and hotel expect and should compared acquisition fast our Since and business food revenue services, spending of are affordable businesses. casual X existing we our we opportunities nature for restaurant the cyclical also in cross-selling from services offset in that may witnessed and the hotel demand complementary and local aspects expect as The hotel increasing businesses food-related communities,

within team profit by economy We operating cash margin our also and stable company's sharing of integration ecosystem, resources, to as demonstrated improving expect the leverage the respective flow. common synergies and company's our overall upon unique scales our between achieving performance

we operating the on operating industry, recovery -- and management with system higher efficiency, widely and performance, robotic upgrade cost, safely IT providing recreation profitability will products franchisees. our With and improving of deploy higher ultimately enhancing the system expedited and the of launching focus

is and services bring the of challenges. recovery and confident better hope create and But we shareholders, full are we'll of to full for of and all. value road franchisees products employees, also with greater support our The

me let to the call Now Megan. turn phone

Megan Huang

in XX, rate Occupancy decreased of the Blended operating the decreased fourth and impact turn COVID-XX. quarter Please Thank the XXX. growth hotels of you, the number to in rebound , from the metrics of our Alex. RevPAR RMB Slide ADR in a XXX. year-over-year to which RMB XXXX and highlights to X.X% decreased XX.X%

XX. Slide to Moving

and only. an were apple-to-apple we the managed or organic and had For of year before. hotels hotels XX leased comparison, the end of franchised the than more Urban LO hotels XXXX, operated, operation, the were the presented and At number hotels. and we Argyle hotels fourth these for X.X% of the hotels FM X,XXX quarter organic X,XXX in and have of excluded

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

segment of opened hotels China, XXXX. compared of and the Tier these end organic XX net you cities, position to we apartment new XXX the and of market, XXXX. at hotels, to the Tier our X Tier less segment Tier and mid-scale segment, XXX in in cities, located were of lower We and a already the can X mid-to-upscale dominant remaining the COVID-XX in hotels hotels lower in cities. half segment. were hotels were X second that in XX XXX XX added XX of XX.X% solidified the the cities X XX and in planned to our we were mid-to-upscale We X portfolio. in in closed XX.X% in where in due than see our XX, On the XXX Slide

FM quarterly Slide to LO XX the our to XXX our to and of for increased RevPAR quarter for shows our RMB LO ADR XXX. hotels of hotels XXX. the RevPAR decreased trend for performance. RMB RMB hotels hotels decreased fourth for our ADR decreased our XXX. XXXX, RMB FM In to operating

and XXXX, hotels. hotels first both decreased LO our XX%. Entering for occupancy to decreased RevPAR to of continued the FM and XX.X% at LO Occupancy recover our hotels FM at hotels to quarter

million, highlights XX a XX direct to the X.XX growth membership from million, our for grew Individual membership the most million year grew in up corporate of the XX our accounted which Slide a year. members up ago. million in and from X.XX half to ago first programs, year of sales

members the of We have industry. by one and nights booked percentage highest corporate the room of individual in

With call CFO, will to our the over I that, Selina. pass

Selina Yang

FM turn disposal hotels. and and XXX.X of the and half The total to our impact Please year-over-year due the the million. at Megan. you, RMB Thank LO XX.X% consolidation RevPAR Slide of lower Argyle second decrease of revenues Urban, resulted in XX. the COVID-XX in to decreased to In of primarily interest was XXXX, which hotels

of impact and the revenues million, and FM hotels year-over-year. revenues total by the total RMB Excluding XX.X% from XX.X% Argyle were Urban, XXX.X decreased down

Also from from total from and XX.X% Argyle of impact to LO total LO hotels decreased total hotels While revenues year-over-year. FM to XXX.X decreased XX.X% excluding revenues XX.X% decreased RMB million. and hotels Urban, the revenues to

Slide expenses and year-over-year you see decreased costs XX.X XX, RMB total million. that X.X% On can to

impact business decreased X.X% hotels other the newly from from and costs opened of lease expenses operated year-over-year. expenses, and Excluding operating ordinary our cost general the our

are Total as expenses. expenses mainly down costs the Hotel of expenses, decrease Urban to million, expenses, The marketing disposal lease of costs operating XXX.X composed of of disposal and were general and interest was the deconsolidation hotels. costs hotel as XX.X% administrative selling year-over-year. operating operating in due well our Argyle and RMB and and

of marketing of was expenses by and business lower were mainly travel disposal year-over-year advertising caused XX.X%. pandemic attributable and expenses RMB XX.X decrease to our of The Argyle Selling staff-related to million, due interest Urban. deconsolidation in less decrease and and a expenses

were the and to of mainly and in of last in with reduction consulting of was the year. second RMB Urban. administrative compared General The disposal our down expenses fees in XXX.X of half second the million consolidation decrease XX.X% half interest XXXX, and Argyle attributable

related provisions which impairments Our loans fixed general loan expenses assets. certain to receivables and were included RMB of XXXX, half the for XX for franchisee second million in

was operations margin RMB Turn million of with to a Slide XX from XX. Income X.X%.

last negative for general mentioned income was EBITDA operating other X.X%. million, RMB activities , were margin as Adjusted negative and was above, to margin Excluding XX.X income XX.X%. XXX.X same of And million XX.X% RMB a of margin decreased with expenses net year. with a

The was XX%. income million due opened a decrease the RMB newly net Core primarily to of of was XX.X impact margin with hotels.

and a of million pipeline opened with RMB XXXX the XXX Excluding XX%. of the for half newly non-GAAP non-GAAP impact with adjusted RMB million of margin of XX.X%. core EBITDA, was XXX net a hotels, And income second was margin

income Net diluted X.XX. ADS basic XX. and was was per X.XX. non-GAAP USD is That per to income turn And core negative negative X.XX. USD RMB Please Slide RMB ADS X.XX, net

XX. take look at a Slide now Let's

As had RMB was and equivalents, from restricted as of company of X,XXX.X December The decrease primarily investments, in of by X,XXX.X loans cash attributable activities. of investments XX, to repayment and equity securities compared the XX, cash, total to June operating XXXX, the cash million offset deposits XXXX. bank short-term cash RMB million term

into the XXXX XX. and total to total account X% over levels. levels grow short-term Taking X% grow industry XXXX of of we full year to Slide of fluctuations, year in to trends for On long-term revenues and hotel the XX% recovery business the XXXX XX% over expect the

grow for company contribution to over the full the restaurant XXXX is XX% of into to business, merger from total the over we of the considering Furthermore, year levels. XXXX business That of their levels. and XXXX XX% group XX% whole revenue expect revenues XX% restaurant the the to the

prepared our concludes ready Operator, now to Q&A remarks. you. begin are Thank This session. we the

Operator

[Operator Instructions].

Our come Jane Wang first of UBS. question from will

Jane Wang

So I in -- my have first two total. questions

The and in that first the Urban of we've Argyle. deconsolidation is seen

we be would strategic what the do the have future? further acquisition So plans And merchant in difference?

any see question at high quite current receive moment the isn't that pipeline pressures be, hotel at the from do And expansions second would investors? And hotel moment. the for we new the we

Alex Xu

for Thank you Selina, pick so reaching much question. okay. I Jane. Great questions. up Okay, questions. those the will

our regard to the Urban, interest the of So that not has disposal deconsolidation changed with of in and Argyle the strategy.

And opportunities last And the strong of we'll local plan. gained experience and companies. investments and is now, continue operating acquisitions. of and the new local X explore think the have other also to smaller we reason merger many have years in I teams growth lessons valuable during we

partners And business us to of suitable shareholders. both our that help the to will further help so companies more for grow experience, identify together with this think more kind accurately, will of create valuable value to I both and that

the and acquisition supplement our that maintain growth of lose we margin. And main on we'll our So healthy growth, amount is accumulated great but of which the main organic And of business. challenging experience not to merger is growth. organic a plan have the driver operation, focus time, to healthy a during -- still our our how

to for XXXX Just tourism of and a was X -- audience, years, hotel especially the you the toughest our year give perspective the the last industry.

total benchmark tourism trillion. is the And XXXX, perspective. a X year, full because year The XXXX, was tourism is Just trillion. the giving first the RMB XXXX, a revenue of the by for roughly RMB that's half revenue X so XXXX a of lockdown,

like okay? trillion, back X.X XXXX little bit trillion for a then tourism to brought that's And So RMB XXXX roughly a X back the RMB just recovered industry. XX% drop, to and over

with a the revenue of -- been tourism and So numbers flow growth. with and cash have and amount that operations to drop, able maintain tourism we the stable healthy, organic

meanwhile, to the shareholders, way growth M&A about a So enhance to in returns okay? because have still will quick we're capitals we the of be we and disciplined and of more deployed But our market industries. focusing on to leveraging enhance healthy recovery that, our rate forget our not

experience also be space have systematic So, to and coverage however, and and wide and team those truly business resources way. area, discipline more disciplined professional compared penetrate the in the the more with team a selecting and in a in we'll have right the and our us financial complementary organic with helping and growth or the lower into careful more managing

interest the deconsolidation disposal So that's of of M&A plan our Urban. and the considering the

the a second new of the rate and question the With to growth regard year. pipeline new for

we're even recovery, XXXX, are this very the really saw trillion. months ministry's a the the to revenues RMB to the tourism, industry's and back culture the first be glad entire quick level. X resumed the the for observed recovery have healthy very and with industry But for year, in rapid, X.X We the forecast we

is the per with close capita person to RMB about little person levels. So per of levels, that's and XXXX bit of about expenditures XXX per XXXX in RMB the a XX% X,XXX compared

under So tight traveling and very and the individual business still control. budget are government a the for

growth moving observe that having have and where seems year, a is -- to for this to to slower a to a coverage So our and into be first adequate the mid-to-upscale last we be on due franchisees. areas still also city the we second-tier the we're of focusing penetrating lower there's of lack going years segments capitals And X did pandemic.

bit XXXX a little there more the And levels. before than -- are cautious more

to our have to upgrading hotel demonstration open, our portfolios. a start them to their our of resiliencies and franchisees and efficiency will business we capabilities to operating So to the models, supporting provide existing encourage the

And we levels back think, than to will and I year, we'll XXXX. resume of that close higher this XXXX substantially confident, are to be

So Jane, thanks, your for questions.

Operator

next Dan Stanley. comes Morgan of Xu The from question

Dan Xu

questions. two have I

question assumption? I regarding RevPAR guidance full hotel for that more XX% year of May total year-on-year first RevPAR your The you for your XX% is of growth, guidance XXXX. get the some to are revenue business on assuming the

secondly, the hotel our deconsolidation Urban, dropped on of think around the and number I the hotel because to of hotels. X,XXX And assumption opening after disposal also

So first XXXX, our what That's well? my are plans number hotel our as question. for

Alex Xu

hope XXXX And year we internally Thanks, we discussed we Dan. estimated the forecast same recovery -- our as of quarter increase. comparing believe right. All RevPAR will of and thoroughly XXXX. first be our also RevPAR We the we this

back So to normal we're levels.

-- the the that for industry's you is And just total towards of with you revenue ministry several as the shared we reasons, the the XX% to by reported level. XXXX

the than not be should XXXX lower They higher. theory, in be should that level. of So RevPAR

think of rate better the than always the I a the our higher demand. as of especially And nationwide the operator, branded that such have much has I industry. capital recovery therefore, think that much However, been GreenTree

recovered pre-pandemic that's for the second-tier than needs the observed first the -- We quarter, X we accumulated years. So we the many, levels. city, or many travel more due to first the for believe past

For driver. family not in especially to second-tier And for people so X years. the initiative the many going to a trade instance, family first, and believe driver area. are And great programs seen will their think, shows Shanghai, quicker, Beijing, for have and investment I government we that recovery countries, much back the main have spread and promotion city the that's reunions, for is investment Guangzhou many then promotion, normal. Shenzhen gradually, the And

because fourth-tier the a And the second-tier cities pandemic third and trailing -- and cities. first- evolvement was was to the slower the of

the during XXXX, we by third city of well the and also convention see by and quarter driving of So third, the fourth-tier as are first not also as many. forces impact the facilities the those the influenza fourth-tier city as pandemic in the

cities So the quarter, the second not quarter, we during third the seasons, But especially believe will recover third and that the recovery as many, much of and fourth-tier quick those as tier. is many second cities quicker. first and during travel

So from overall, we third quarter from accumulated second, expect the do past demand a stronger years. X

is -- many, the -- the and of the overall, leisure for XXXX the a And levels. transition XXXX for we the businesses and our projection recovery at starting be stable hope would many XXX% economy this year's the RevPAR travelers business with themselves, much to reposition the the travelers. So of so of are

pre-COVID conservative the January, impacted by the and the first hotel first -- new pandemic levels quarter, policy And and XXX was now on from right we from control the to year XXX period with have contracting depending to And the our sorry, February a about the to is third assigning one transition third the and estimate in speed. speed In fourth bit. rapid the hotel little to lifted second the transition of the policy impacted regard still be recovery. quarters openings, the during per and control from the being a

new the comparing adding franchisees, pre-pandemic And the we'll helping are teams able down traveling, a last many, think opening that levels. and to with lot travel locked recover the hotel our that and prevented we to also our year, development, cities -- have we we business speed are contracts So are close for to developers and and more. many

enhance to going also portfolio's renovations. existing are our we meanwhile, And

the a reality for XXXX, renovation years slowed XXXX XXXX, plan X last and have is down initially had are We bit We years. quite in but the those a the and in And of will the to franchisees tougher front floor, the terms are the much for lack pandemic hotels. be adequate picture not clear renovate for confidence of lifted. and the when X

made upgraded. of the difficult quarantine for the and be lack the travels of quarantine hotel that period the -- Secondly, it to

have we Thirdly, also government for being used demand hotels many at the under hotels. periodically quarantine

reasons, measures, of for spread, we aggressively, pandemic we strict to really had hotels our are and renovation of those proactively upgraded, a the be upgrade existing But now our So be renovated. lifting right very to products, with and the wide not for have working with franchisees policies programs.

place, existing hotels, many, With on both have think we upgrade. well opened newly that fresh the more the in as as I hotel will many new

and think will revenue a and from and us next both planned from our this year existing boost in great I the give hotels growth new the hotels. the

Dan. thanks, So

Dan Xu

quick me. one last question for Just

loss disposal any in of future do and gain With later disposal that already any or impacted? we deconsolidation Argyle, the being half the after first or the occur Urban impairment the might of also impairment expect

Alex Xu

but interest be will performance so numbers I still add. shareholders, then book. bit, the The Urban, on completely a impairment because disposal in the there of the majority more with we're Selina will we that the end, no Argyle the in and But in XXXX, have [indiscernible], of lower. because expected the elaborate is of that will little we

second the because XXXX half of and had, I we -- the that significant to in impairment leave believe Selina. portion I will but Argyle balance So of

Selina Yang

I yes, is -- correct. you're Alex, think this

interest For purchased is for the totally, no Urban has in there the so back Urban. Urban, future impairment further because

PL and sheet. in we the investment actually, balance in Argyle, long-term For recorded both

So little future. the in mature they're very, very

Alex Xu

time growth of about some and just give and again the completely be that, core we organic I is focusing new with growth. have our instead on energy. to those core give plan. insignificant. products able talking value That long-term us of in the so From amount on focused understanding is we'll -- team the I'm think problem-solving our investments residual really my resources of And and

Operator

The from next question comes [indiscernible].

Unidentified Analyst

have the beverage company's more I question. one food for acquisitions? are What and plan future the

Alex Xu

elaborate me Let on that.

As the history not restaurant in XX-something the of years. numbers, many you people in too China survive the many our and indicated services grow brands the many, just food are that in restaurant that the period. legacy brand that distinguished But brands sometimes X the can heard think and there side, over XX-year

So this their and brands' both really demonstrated management sustainability capabilities.

we centers have and in these locations So in those and stations supermarket Those the of restaurants train in past shopping malls. the in X of restaurants. high-speed are primary locations

You areas them online so reduced the disclosed the consumption the numbers, of the some to Also of because gets dramatically traffic those pandemic. because of shifting trend.

traffic the in so to both stations travels, centers shopping will and the stations, train the the high-speed we So, those resumption fullest. high-speed the of think recover quickest hubs and the future, the train we the to malls, especially with the supermarket resume, local the

to many Supermarket supermarket opening new malls malls. more are alternative existing centers therefore, lot new And the are and supermarket many many and the the in the a still pressure centers, local cutting -- the formats deliveries. moving demands online to malls -- and back traffic because shopping of the under are on the

we to capabilities people still good and a are that, managing So for result our over the believe X just the past that again, years. we as showing a operations to have there. we I have of healthy -- And

going is the that, efficient opening new and in community trend centers, retirement local the communities So in communities so servicing more light plan to new focusing that on growth be the the in the way. focus restaurants more a of our of

products to also the presented And the develop service also our to capabilities and side, affordable and great delivery luxury and will want enhance on great product increase and called at revenues. we delivery we affordable cost,

leveraging resources. also will we fourthly, and facilities hotel, And hotel our

reasons, including or are our restaurant of of most a [indiscernible], a segment as we these is the healthier the all room hotel we revenues. and the service than have of of result, average. than have because services, we And breakfast competitors and industry hotel margin companies margin the segments, operating a to well, One managing healthy able aspects

both to talking breakfast And providing so the we're started most much and services certain to have dining our full the to we'll we not due food have quality the high-end we component by day to leveraging that to for hotels, dining, the upscale. Upscale, plan because the the full hotels, that's guests. mid-to-scale continue very and service and mid- in of increase needed on about hotels,

initiatives, and franchised that demand also for focus see brands we own believe and continue by we to And our will our other restaurants. hotel have on we we franchisees. operators So seen X by restaurant

and business the of the and with So plan. expect do economy those recovery our to the growth of well and pandemic regions, traffic be our increased measures as we lift greatly the those as the food restaurant will benefited from Thanks.

Operator

from The next Goldman comes of question Sachs. Peter Yang

Peter Yang

have I questions. So two

after in the EBITDA the normalized? The fully is give on year Could and guidance is next of first margin. the you you maybe expecting topline were this kind year us of what EBITDA margin

second question regarding focus. the -- company's strategic strategy is And the

is mid-scale maybe at the restaurants. acquiring the So or after company in segments upscale of in strategy or the looking in terms the expanding

how on priorities the for progress make or are focus what areas? going And So are strategies? the to those company's you

Alex Xu

question, second about about talk our you XXXX the to margin Thanks, okay, strategy, just and the XXXX. and then Selina focus projected Peter. take talk discussion, will or XXXX EBITDA will margin, the I our

So we recovery. not still and of the of of the be experience believe our the lot to industry. in team, in rapid going still meanwhile, years as opportunities back to XXXX levels mentioned And XXXX tough We we lot environment. gaming with are period, Peter, earlier, X operating a challenges past in the the in think, XXXX, stronger the the recovery with are terms I there a running made do entire tourism

focusing on clearly our that, are we and So the with hotel and growth side. core organic

has be core team, growth. management existing its going focuses to are group's on hotel Each business our the management so organic unit

X So the parts. consists organic probably of growth

and hotel of the used for and products, X the wear renovation we because focus area them renovate hotel many need than That's facilities, have existing the many, some we that and the completely key been usage. behind of other of as portfolios upgrade more our is First tears are types being to upgrade. quarantine and last years, and

and is will And So especially upscale and to second we with hotels then more focus new levels. influence develop new opening mid-scale showcasing these the by hotels further to . lower the our

And efficiencies the the improve, the and overall are many, instance, I of the outreach and our third and challenge to costs labor to again, part increase the continue program experiment cost. improve lower service our focus due some labor community AI data customer sales subarea of deliver and mining AI for to for local shortage, are some to service, next overall are and guests deploy what and technology our robotic efficiencies. for is for And and sales to information and many deploy think, even our -- improve teams efficiencies and also system the starting of of and we instance, focus for to marketing on, a the for tools labor technology marketing enhance our the media. to our new Because to And years, operating newly used, to further our come.

And folks margin so are to the operating the and efficiencies. improve hotels those overall

So our are those core focus.

this financially common operators company's common if local continue value, other management And we may And that common side, strong and then disciplined. explore -- then focused are on there we goal to hotel have share a the M&A.

I and If our we a new the then more they part lot create at the and shopping meals servicing local customer-preferred supermarket use grow to communities. we management services the local affordable on want And In the to defined very habitual that, more. and a ingredients, malls the into local team luxury. lot by a hardcore you food and light food affordable of also that diversifying centers and to believe and lastly, And become want healthy investors. for in economy, cash for use the directly local And to sector restaurants. demand our communities of mentioned the price and will flow from and -- the and communities, into generating healthily return just

that economy, approach to the generate and overall pre-pandemic plan with we we think focused So with close really and margin to of XXXX, of level. the recovery

Selina. to So passing rest with that, I'm the of the questions

Selina Yang

the EBITDA the answer effects before was years? margin series margin. X next margin to margin for for actually at for quarters. I point the would the our Thank before about years, EBITDA about EBITDA you, I of what And high as what's our impact like Alex. share to COVID-XX, Actually a reached our XX%. question, the Also, X the EBITDA as ever lowest XX% past

factors there lower X margin. So material are that reduced the

one the is our due first resource reason to the and consolidation the and stable The cost higher is second the the joint the revenues And human and ventures. lower rent especially COVID-XX, the costs. cost, cost of

hotels, mid X the operating is opened the And the segment scale the of the in especially X middle leased Tier in -- more third reason cities. and term that we Tier

another And decrease For X, the the affected years, X past joint first reason, the due was margin operated leased, the about the hotels of ventures about margin. consolidation delivery and our for XX% remaining margin to opened EBITDA EBITDA was XX% the the of newly amount in reduced, COVID-XX. of

and XXXX forward we'll year next year. through the be So the looking of

normal to their return way. we and passed venture, joint the our consolidate COVID-XX to business when have we First,

also, will ramp-up And past and opened the back period the hotels normal return newly gradually operation. to be for the

to recover year XX% the XX% in the about So margin EBITDA to of XXXX. we expect

So another XX%. that to means from XX% plus, XX% the

So recover to and the to for the becoming and and we year better. -- now. a go the it's bit But us for believe the operation industry sector hard more of right members XXXX, better will

to may or above normal of EBITDA level margin. in XX% we That gradually return this, following the is X X years. next the So

Operator

of The Oriental next question comes from Value.

Unidentified Analyst

quick questions. two Just

the can question years? business upcoming business share second current restaurant question So the for the is of that and the what's profitability first you current the that is about outlook

Selina Yang

cannot very question your repeat again? hear clearly. Would We you you

Unidentified Analyst

now? better it Is

Alex Xu

better. it's Yes,

Selina Yang

It's better.

Unidentified Analyst

Yes.

So I yes, repeat questions. my sorry,

So of first That's restaurant business? my the current question. can the profitability is you your about share question first that

the question And current what's the upcoming outlook that dividend years? for is the second

Alex Xu

So Don, correct? that, we're trying is profitability to understand, level your first question for I am the restaurants, the what's

Unidentified Analyst

Yes.

Alex Xu

second the question? What's Okay.

Unidentified Analyst

The second the the the of outlook dividend dividend. company, question is

Alex Xu

a restaurant -- we healthy, it. numbers have for have restaurants. maintained cash think, Thanks, Got the don't Don. the fully believe flow audited do but the the I I that The for of we XXXX,

we So okay? get to as we'll the soon as the have we number will publish -- them,

picture a our regard the we dividend. little more uncertain is the and resume bit uncertain the that transition current previous as possible we'll with think that But and soon about plan still with are soon and dividend that impact. as to a to business as period is little I So as growing bit our clear focus stable

Unidentified Analyst

Okay. Understood. Yes.

restaurant how year But for final last number understand then for margin, So the last I projection? for the so not XXXX, that year this right, year. audited is about for what's your

Alex Xu

firm think we the numbers? think that not restaurant going acquisition, and reputable and by the So at not the where to we I with we that you assumptions that and valuation gross we of Do were XXXX, projections margin. with when is a that there clear number we them I -- for revenue full the, is With the of high And very too most think, on I we've business. to profit -- the have we XX% valuation you -- time, the because XX% a be. made have and have pandemic the when have -- projected

report those separate Don, cost once you on the I will, think, have hand. we so fund And numbers, I

Operator

is question a next Xu Morgan Dan follow-up The of Stanley. from

Dan Xu

think Alex, I can would Can you a Da explained channel Jiangsu, customers to will Niang synergy little you you one us branding a F&B the by It can For business? and business can by grow -- are Niang Da Niang more business, and more -- I Niang Jiangsu GreenTree you they is or F&B -- Jiangsu business, organically, organically? Da For have a bit you hotel or example, between lobby, because synergies the regarding maybe clearly GreenTree to you Da Bellagio, the help perform, Jiangsu business? your to hotel on brand. any have the elaborate very how question? follow-up there each your between for about example, the the to example. hotel bring clients having But

So understand of sharing. just is the or there it's maybe membership trying because to synergy any

customers For the can example, for you or more and hotel combine can target your business. SMB have members your you

if there's understand any, okay, Alex. to trying Just

Alex Xu

question. that's a great Okay. Dan,

X the objective challenge. -- X create little face The that's of acquisition. unit do at years, each best share bit to the past past their background storm X really I the intent or between a businesses is -- synergies challenges, the weather So the let is the segments years think the in of the me to that original to and The acquisition the of original these trying to the to counter X brands.

So the team have not synergized in a widespread way.

a not We that are Bellagio there many, experiments, hotels. great many and did perform many -- few find we synergies experiments between experiments

and revenue concept For restaurant branded XXX%. the have of restaurant in increased we hotels, a -- of new hotels, inside one adopted instance, our the we

And meals restaurant room XX% roughly the and breakfast revenues, the so revenues the revenues, the revenues. became foodservice of

the So XX%. the it room was X in million. other beverage to RMB last close words, And revenue in side, food year, then and the is

have in So some success we did have -- do end. stories great we that

but that, needs to moment [indiscernible], those there's replicate then book have X expand, in we be near over together that building dedicated not in I the do are think have trained and process and the team however, are there. the the we X to think the now hotels. COVID team the a And without at last to to the And with not years, because substantial resources we on synergies release of we the substantial still this is numbers, in it's now future, success added to team bridge synergies. and measurement drive impact right the lifted, -- members And

trying many make only services we not really group the last can are the create and of the rooms each concepts that do have offer meanwhile, you to new we increase own then and management food team progress. the we to we that improve revenue challenge, the business their in operations a experiment building and dedicated right to have to a -- other now, lot in to whether some to the to But them. see have resources combining experience, as new facilities we sometimes create not more customer sometimes done units. of those also not are by better in When we report X to the question food end And we focusing the of the face do hotels services. our service then We're the not

think more. I year, see many this we'll

year, to further travel, with X those few some already -- businesses experience to we a have more ability that many We said, end I prototypes. we'll in But locations. this gain hope and the to grow. to have ability help to in the key lot a expand As more to of with the

In our terms integrated memberships, of we just systems.

quarter in in the sorry, second second that will I I'm in of year. to first, think use the this half, be the in deployment

Dan Xu

the Thank future. see you, to and more up coming prototypes in Alex, hope synergies more we

Alex Xu

the we good to think, find Yes. I and good because Great. for invite it visit you local We'd for guests quite, to restaurants place community. that the good the like and for

So basically, everybody benefited from that.

Operator

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

Selina Yang

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

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

Alex Xu

you. Thank

Operator

you The may for conference has Thank now today's and attending disconnect. concluded. presentation, now you

GreenTree Hospitality (GHG) 6 Apr 232022 Q4 Earnings call transcript