GreenTree Hospitality Group Ltd. Reports Third Quarter 2021 Financial Results
- Total revenues increased 16.3% year-over-year to RMB310.4 million (US$48.2 million)[1].
- Income from operations decreased 45.6% year-over-year to RMB54.9 million (US$8.5 million) [1].
- Adjusted EBITDA (non-GAAP) [2] decreased 33.5% year-over-year to RMB73.7 million (US$11.4 million) [1].
- Core net income (non-GAAP) [3] decreased 45.7% year-over-year to RMB50.2 million (US$7.8 million) [1].
SHANGHAI, Jan. 12, 2022 /PRNewswire/ -- GreenTree Hospitality Group Ltd. (NYSE: GHG) ("GreenTree", the "Company", "we", "us" and "our"), a leading hospitality management group in China, today announced its unaudited financial results for the third quarter of 2021.
Third Quarter of 2021 Operational Highlights
- A total of 4,626 hotels with 334,162 hotel rooms were in operation as of September 30, 2021, compared to 4,542 hotels and 328,773 hotel rooms as of June 30, 2021
- As of September 30, 2021, the Company had 62 leased-and-operated ("L&O") hotels and 4,564 franchised-and-managed ("F&M") hotels in operation in 362 cities across China, compared to 37 L&O hotels and 4,158 F&M hotels in operation in 341 cities as of September 30, 2020. The geographic coverage increased by 6.2% year over year.
- During the quarter, the Company opened 182 hotels, an increase of 20 compared to 162 hotels in the third quarter of 2020. Two of those hotels were in the luxury segment, 70 in the mid-to-up-scale segment, 83 in the mid-scale segment, and 27 in the economy segment. Geographically speaking, 12 hotels were in Tier 1 cities [3], 52 in Tier 2 cities and the remaining 118 in Tier 3 and lower cities in China.
- As of September 30, 2021, the Company had a pipeline of 1,207 hotels contracted for or under development, of which 57 hotels were in the luxury hotel segment, 337 in the mid-to-up-scale segment, 465 in the mid-scale segment, and 348 in the economy segment.
- The average daily room rate, or ADR, for all hotels in operation was RMB 163, an increase of 7.7% from RMB151 in the third quarter of 2020, and a 6.2% decrease compared with RMB174 in the pre-COVID-19 third quarter of 2019.
- The occupancy rate, or OCC for all hotels in operation was 72.4%, a decrease of 6.7% compared with 79.1% in the third quarter of 2020, and a 13.5% decrease compared with 85.9% in the pre-COVID-19 third quarter of 2019.
- The revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR by its occupancy rate, was RMB 118, a 1.4% year-over-year decrease, and a 20.9% decrease compared with RMB149 in the pre-COVID-19 third quarter of 2019.
- As of September 30, 2021 the Company's loyalty program had more than 66 million individual members and more than 1,810,000 corporate members, compared to over 62 million individual members and approximately 1,760,000 corporate members respectively as of June 30, 2021. The Company sold approximately 91.3% of room nights directly during the third quarter of 2021.
"Despite the unprecedented challenges brought upon us by resurgences of COVID-19 cases in various parts of China, the company delivered satisfactory quarterly results as the impact on our occupancy and RevPAR has been less severe than at the average of other hotels in China," said Mr. Alex Xu, Chair and Chief Executive Officer of GreenTree. "This has been an extraordinarily tough period, but it is one that has been shared across the industry. As for ourselves, we feel certain that we will get through the current pandemic wave given the resilience of our business model and the experience that our team and franchisees have accumulated while combatting Covid-19. Going forward, we will further optimize our management and operating systems, including design and technology features, and sales and marketing programs to improve hotel quality and operating performance. Once again, I am extremely grateful for the support and dedication of our employees, franchisees, guests, and shareholders as we continue to navigate uncertain times."
[1] The conversion of Renminbi ("RMB")into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.4434 on September 30, 2021 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20211004/ |
[2] Adjusted EBITDA (non-GAAP) is calculated as net income plus other operating expenses, income tax expense, interest expense, depreciation and amortization, losses from investment in equity securities, but excludes other operating income, interest income and other, net, gains from investment in equity securities, share of gains in equity investees (net of tax), and other income, net. The calculation of Adjusted EBITDA (non-GAAP) included in this report has been aligned according to the abovementioned definition. |
[3] Core net income is calculated as net income plus share-based compensation, losses from investments in equity securities (net of 25% tax), one-time fees and expense, asset impairment/accrued bad debt and income tax expenses related to dividend distribution but excludes government subsidies (net of 25% tax), gains from investment in equity securities (net of 25% tax), and other income (net of 25% tax). |
[4] Tier 1 Cities refers to Beijing, Shanghai, Shenzhen and Guangzhou; Tier 2 Cities refers to the 32 major cities, other than Tier 1 Cities, including provincial capitals, administrative capitals of autonomous regions, direct-controlled municipalities and other major cities designated as municipalities with independent planning by the State Council. |
Third Quarter 2021 Financial Results
Quarter Ended | |||||
September | September | September | |||
RMB | RMB | US$ | |||
Revenues | |||||
Leased-and-operated hotels | 66,823,544 | 106,518,761 | 16,531,452 | ||
Franchised-and-managed hotels | 194,060,899 | 194,002,860 | 30,108,772 | ||
others | 5,983,132 | 9,922,553 | 1,539,956 | ||
Total revenues | 266,867,575 | 310,444,174 | 48,180,180 | ||
Nine Months Ended | |||||
September | September | September | |||
RMB | RMB | US$ | |||
Revenues | |||||
Leased-and-operated hotels | 150,961,027 | 279,514,243 | 43,379,930 | ||
Franchised-and-managed hotels | 470,258,096 | 589,609,423 | 91,505,948 | ||
others | 19,034,407 | 29,589,847 | 4,592,272 | ||
Total revenues | 640,253,530 | 898,713,513 | 139,478,150 | ||
Total revenues were RMB310.4 million (US$48.2 million) [1], a 16.3% year-over-year increase. The increase was primarily due to our newly opened L&O hotels. Compared with the pre-COVID-19 third quarter of 2019, total revenues increased by 6.3%. Total revenues for the first nine months of 2021 were RMB 898.7 million (US$139.5 million) [1], representing a 40.4% year-over-year increase.
Total revenues from leased-and-operated hotels were RMB106.5 million (US$16.5 million) [1], a 59.4% year-over-year increase. The increase was primarily due to the 20.7% year-over-year increase in L&O hotels' RevPAR and revenues from the 24 L&O hotels opened since the beginning of 2021. This revenue increase was partially offset by the closure of 2 L&O hotels over the same period. Total revenues from L&O hotels for the nine months of 2021 were RMB279.5 million (US$43.4 million) [1], an 85.2% year-over-year increase.
Total revenues from franchised-and-managed hotels were RMB194.0 million (US$30.1 million) [1], almost the same as in the same quarter last year. Initial franchise fees increased by 17.8% year-over-year, mainly attributable to the gross opening of 181 F&M hotels and the closure of 96 F&M hotels. Recurring franchisee management fees and others decreased 1.7% year-over-year primarily due to the 2.2% decrease in RevPAR and offset by the 9.8% increase in the number of F&M hotels. Total revenues from F&M hotels for the first nine months of 2021 were RMB589.6 million (US$91.5 million) [1], representing a 25.4% year-over-year increase.
Quarter Ended | |||||
September 30, 2020 | September | September | |||
RMB | RMB | US$ | |||
Initial franchise fee | 16,619,577 | 19,579,815 | 3,038,740 | ||
Recurring franchise | 177,441,322 | 174,423,045 | 27,070,032 | ||
Revenues from franchised- | 194,060,899 | 194,002,860 | 30,108,772 | ||
Nine Months Ended | |||||
September 30, 2020 | September | September | |||
RMB | RMB | US$ | |||
Initial franchise fee | 42,985,481 | 57,172,423 | 8,873,021 | ||
Recurring franchise | 427,272,615 | 532,437,000 | 82,632,927 | ||
Revenues from franchised- | 470,258,096 | 589,609,423 | 91,505,948 | ||
Total operating costs and expenses
Quarter Ended | |||||
September | September | September | |||
RMB | RMB | US$ | |||
Operating costs and expenses | |||||
Hotel operating costs | 108,025,295 | 172,797,324 | 26,817,724 | ||
Selling and marketing expenses | 21,273,500 | 16,450,435 | 2,553,067 | ||
General and administrative expenses | 44,782,915 | 68,776,812 | 10,673,994 | ||
Other operating expenses | 434,792 | 760,850 | 118,083 | ||
Total operating costs and expenses | 174,516,502 | 258,785,421 | 40,162,868 | ||
Nine Months Ended | |||||
September | September | September | |||
RMB | RMB | US$ | |||
Operating costs and expenses | |||||
Hotel operating costs | 292,705,145 | 459,464,624 | 71,307,792 | ||
Selling and marketing expenses | 51,114,478 | 56,271,856 | 8,733,255 | ||
General and administrative expenses | 121,672,457 | 195,778,639 | 30,384,368 | ||
Other operating expenses | 1,633,064 | 4,907,140 | 761,576 | ||
Total operating costs and expenses | 467,125,144 | 716,422,259 | 111,186,991 | ||
Hotel operating costs were RMB172.8 million (US$26.8 million) [1], a 60.0% increase year-over-year. The increase was mainly attributable to the opening of 24 L&O hotels since the beginning of 2021, which resulted in higher rents, higher utilities and consumables, higher staff headcount and compensation, higher depreciation and amortization, and higher ramp up cost. Excluding the impact from newly opened L&O hotels in 2021, hotel operating costs increased 10.3%. For the first nine months of 2021, hotel operating costs were RMB459.5 million (US$71.3 million) [1], representing a 57.0% increase.
Quarter Ended | |||||
September | September | September | |||
2020 | 2021 | 2021 | |||
RMB | RMB | US$ | |||
Rental | 27,189,274 | 68,151,443 | 10,576,938 | ||
Utilities | 3,666,479 | 7,272,803 | 1,128,721 | ||
Personnel cost | 11,732,599 | 21,175,692 | 3,286,416 | ||
Depreciation and amortization | 14,946,857 | 17,781,855 | 2,759,701 | ||
Consumable, food and beverage | 7,937,167 | 17,297,833 | 2,684,582 | ||
Costs of general managers of franchised- | 24,241,736 | 29,575,721 | 4,590,080 | ||
Other costs of franchised-and-managed | 7,873,516 | 7,670,523 | 1,190,447 | ||
Others | 10,437,667 | 3,871,454 | 600,839 | ||
Hotel Operating Costs | 108,025,295 | 172,797,324 | 26,817,724 | ||
Nine Months Ended | |||||
September | September | September | |||
2020 | 2021 | 2021 | |||
RMB | RMB | US$ | |||
Rental | 90,098,256 | 171,945,795 | 26,685,569 | ||
Utilities | 11,258,969 | 19,476,338 | 3,022,680 | ||
Personnel cost | 31,296,079 | 52,246,791 | 8,108,575 | ||
Depreciation and amortization | 36,873,883 | 51,465,319 | 7,987,292 | ||
Consumable, food and beverage | 23,477,610 | 49,024,107 | 7,608,422 | ||
Costs of general managers of franchised- | 65,575,838 | 84,971,682 | 13,187,398 | ||
Other costs of franchised-and-managed | 17,853,103 | 20,119,472 | 3,122,493 | ||
Others | 16,271,407 | 10,215,120 | 1,585,363 | ||
Hotel Operating Costs | 292,705,145 | 459,464,624 | 71,307,792 | ||
Selling and marketing expenses were RMB16.5 million (US$2.6 million) [1], a 22.7% year-over-year decrease. The decrease was mainly attributable to lower advertising expenses. For the first nine months of 2021, selling and marketing expenses were RMB56.3 million (US$8.7 million) [1], representing a 10.1% increase.
General and administrative expenses were RMB68.8 million (US$10.7 million) [1], a 53.6% year-over-year increase. The increase was mainly attributable to the opening of 24 L&O hotels since the beginning of 2021 and the increased one-time consulting fees for capital market advice. Excluding the impact from newly opened L&O hotels and one-time consulting fees, general and administrative expenses increased by 16.6%. General and administrative expenses for the nine months of 2021 were RMB195.8 million (US$30.4 million) [1], a 60.9% year-over-year increase.
Gross profit was RMB137.6 million (US$21.4 million) [1], a year-over-year decrease of 13.3%. Gross margin was 44.3%, compared to 59.5% a year ago. The decrease was primarily due to the operating loss recorded by newly opened L&O hotels during their ramp-up period. Gross profit for the first nine months of 2021 was RMB439.2 million (US$68.2 million) [1], a 26.4% year-over-year increase.
Income from operations was RMB54.9 million (US$8.5 million) [1], a year-over-year decrease of 45.6%, with a margin of 17.7%. The decrease was mainly due to the operating loss recorded by newly opened L&O hotels during their ramp-up period. Excluding the impact of newly opened hotels, income from operations was RMB88.5 million, a year-over-year decrease of 12.3%, with a margin of 31.5%. Income from operations for the first nine months of 2021 was RMB205.6 million (US$31.9 million) [1], a year-over-year increase of 2.4%.
Net income was RMB33.0 million (US$5.1 million) [1], compared to RMB85.6 million in the third quarter of 2020 and net margin was 10.6%. The year-over-year decrease was mainly attributable to the operating loss recorded by newly opened L&O hotels during their ramp-up period. Net income for the first nine months of 2021 was RMB179.3 million (US$27.8 million) [1], a year-over-year increase of 8.5%.
Adjusted EBITDA (non-GAAP) [2] was RMB73.7 million (US$11.4 million) [1], a year-over-year decrease of 33.5%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, was 23.7%, compared to 41.5% a year ago. Excluding the impact of newly opened hotels, Adjusted EBITDA was RMB107.3 million, with a margin of 38.2%. Adjusted EBITDA (non-GAAP) for the first nine months of 2021 was RMB248.9 million (US$38.6 million) [1], a year-over-year increase of 10.7%.
Core net income (non-GAAP) was RMB50.2 million (US$7.8 million) [1], a year-over-year decrease of 45.7%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, was 16.2%, compared to 34.6% one year ago. Core net income (non-GAAP) for the first nine months of 2021 was RMB173.0 million (US$26.8 million) [1], a year-over-year decrease of 11.2%.
Earnings per ADS (basic and diluted) were RMB0.33 (US$0.05) [1], down from RMB0.81 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB0.49 (US$0.08) [1], down from RMB0.90 a year ago. Earnings per ADS (basic and diluted) for the first nine months of 2021 was RMB1.80 (US$0.28) [1] up from RMB1.71 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB1.68 (US$0.26) [1] for the nine months of 2021, a decrease from RMB1.89 a year ago.
Cash flow. Operating cash inflow was RMB116.8 million (US$18.1 million) [1] as a result of income from operations. Investing cash outflow was RMB171.3 million (US$26.6 million) [1], which was primarily attributable to acquisition costs of our L&O hotels, investments and deposits of property and equipment, loans to franchisees, and purchases of short-term investments. The investing cash outflow was partially offset by proceeds from repayment from franchisees, and proceeds from short-term investments. Financing cash outflow was RMB48.4 million (US$7.5 million). Operating cash inflow for the first nine months of 2021 was RMB159.7 million (US$24.8 million) [1]. Investing cash outflow for the first nine months of 2021 was RMB672.0 million (US$104.3 million) [1]. Financing cash inflow for first nine months of 2021 was RMB101.5 million (US$15.7 million) [1].
Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposit. As of September 30, 2021, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,192.1 million (US$185.0 million) [1], compared to RMB1,291.0 million as of June 30, 2021. The decrease from the prior quarter was primarily attributable to acquisition costs of our L&O hotels, loans to franchisees and property investments, offset by drawing down of bank facilities.
COVID-19 Update
During the third quarter, RevPAR decreased in July due to the worsened Covid-19 situation in Nanjing city and in Jiangsu Province. Fortunately, RevPAR rebounded quickly to around 100% of the 2019 level in the middle of September. But due to the outbreak of cases in different cities nationwide, it dropped to about 81.3% of its 2019 level during the first week of November but then recovered gradually to about 98.5% of its 2019 level in the last week of December thanks to the resilience of our business model, well-segmented and robust brand portfolio and the loyalty and stickiness of our members.
Guidance
Assuming the recent resurgence of COVID-19 outbreaks remains under control in China in the coming quarters, the Company expects an increase in total revenues of 25%-30% for the full year 2021, compared to 2020 and an increase in total revenues of 7%-12% for the full year 2021, compared to 2019.
The guidance set forth above reflects the Company's current and preliminary views based on our recovery speed and may not be indicative of the final financial results for future interim periods and the full year.
Conference Call
GreenTree's management will hold an earnings conference call at 8:00 PM U.S. Eastern Time on January 12, 2022 (9:00 AM Beijing/Hong Kong Time on January 13, 2022).
Dial-in numbers for the live conference call are as follows:
International | 1-412-902-4272 |
Mainland China | 4001-201-203 |
US | 1-888-346-8982 |
Hong Kong | 800-905-945 or 852-3018-4992 |
Singapore | 800-120-6157 |
Participants should ask to join the GreenTree call, please dial in approximately 10 minutes before the scheduled time of the call.
A telephone replay of the conference call will be available after the conclusion of the live conference call until January 19, 2022.
Dial-in numbers for the replay are as follows:
International Dial-in | 1-412-317-0088 |
U.S. Toll Free | 1-877-344-7529 |
Canada Toll Free | 855-669-9658 |
Passcode: | 6891497 |
Additionally, a live and archived webcast of this conference call will be available at http://ir.998.com.
Use of Non-GAAP Financial Measures
We believe that Adjusted EBITDA and core net income, as we present it, is a useful financial metric to assess our operating and financial performance before the impact of investing and financing transactions, income taxes and certain non-core and non-recurring items in our financial statements. |
The presentation of Adjusted EBITDA and core net income should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.
The use of Adjusted EBITDA and core net income has certain limitations because it does not reflect all items of income and expenses that affect our operations. Items excluded from Adjusted EBITDA and core net income are significant components in understanding and assessing our operating and financial performance. Depreciation and amortization expense for various long-term assets, income tax and share-based compensation have been and will be incurred and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA and core net income does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest expense/income, gains/losses from investments in equity securities, income tax expenses, share-based compensation, share of loss in equity investees, government subsidies and other relevant items both in our reconciliations to the corresponding U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.
The term Adjusted EBITDA and core net income is not defined under U.S. GAAP, and Adjusted EBITDA and core net income is not a measure of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider this data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, our Adjusted EBITDA and core net income may not be comparable to Adjusted EBITDA and core net income or similarly titled measures utilized by other companies since such other companies may not calculate Adjusted EBITDA and core net income in the same manner as we do.
Reconciliations of the Company's non-GAAP financial measures, including Adjusted EBITDA and core net income, to the consolidated statement of operations information are included at the end of this press release.
About GreenTree Hospitality Group Ltd.
GreenTree Hospitality Group Ltd. ("GreenTree" or the "Company") (NYSE: GHG) is a leading hospitality management group in China. As of September 30, 2021, GreenTree had a total number of 4,626 hotels. In 2020, HOTELS magazine ranked GreenTree Top 12 Ranking among 225 largest global hotel groups in terms of number of hotels in its annual HOTELS' 225. GreenTree was also the fourth largest hospitality company in China in 2020 based on the statistics issued by the China Hospitality Association.
GreenTree 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.
For more information on GreenTree, please visit http://ir.998.com
Safe Harbor Statements
This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," "confident," "future," or other similar expressions. GreenTree may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about or based on GreenTree's current beliefs, expectations, assumptions, estimates and projections about us and our industry, are forward-looking statements that involve known and unknown factors, risks and uncertainties that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such factors and risks include, but not limited to the following: GreenTree's goals and growth strategies; its future business development, financial condition and results of operations; trends in the hospitality industry in China and globally; competition in our industry; fluctuations in general economic and business conditions in China and other regions where we operate; the regulatory environment in which we and our franchisees operate; and assumptions underlying or related to any of the foregoing. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made, in this press release are current as of the date of the press release. Except as required by law, GreenTree undertakes no obligation to update any such information or forward-looking statements to reflect events or circumstances after the date on which the information is provided or statements are made, or to reflect the occurrence of unanticipated events.
Financial Tables and Operational Data Follow
GreenTree Hospitality Group Ltd. | |||||
Unaudited Condensed Consolidated Balance Sheets | |||||
December 31, | September 30, | September 30, | |||
2020 | 2021 | 2021 | |||
RMB | RMB | US$ | |||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | 611,358,209 | 198,989,361 | 30,882,665 | ||
Short-term investments | 301,983,182 | 518,915,595 | 80,534,438 | ||
Investments in equity securities | 242,378,696 | 243,135,861 | 37,734,094 | ||
Accounts receivable, net of allowance | 101,511,057 | 106,600,534 | 16,544,143 | ||
Amounts due from related parties | 9,770,871 | 146,685,649 | 22,765,256 | ||
Prepaid rent | 13,597,867 | 19,120,240 | 2,967,415 | ||
Inventories | 3,804,680 | 2,259,917 | 350,734 | ||
Other current assets | 77,649,794 | 176,685,447 | 27,421,150 | ||
Loans receivable, net | 222,244,629 | 320,772,059 | 49,783,043 | ||
Total current assets | 1,584,298,985 | 1,733,164,663 | 268,982,938 | ||
Non-current assets: | |||||
Restricted cash | 22,369,900 | 22,299,900 | 3,460,890 | ||
Long-term time deposits | 490,000,000 | 160,000,000 | 24,831,611 | ||
Loans receivable, net | 145,703,988 | 335,166,679 | 52,017,053 | ||
Property and equipment, net | 668,605,661 | 992,679,468 | 154,061,438 | ||
Intangible assets, net | 491,513,073 | 539,647,424 | 83,751,967 | ||
Goodwill | 100,231,487 | 105,397,148 | 16,357,381 | ||
Long-term investments | 369,525,917 | 184,034,186 | 28,561,658 | ||
Other assets | 66,635,394 | 286,179,925 | 44,414,427 | ||
Deferred tax assets | 156,070,112 | 142,433,816 | 22,105,382 | ||
TOTAL ASSETS | 4,094,954,517 | 4,501,003,209 | 698,544,745 | ||
LIABILITIES AND EQUITY | |||||
Current liabilities: | |||||
Short-term bank loans | 150,000,000 | 240,000,000 | 37,247,416 | ||
Accounts payable | 19,606,344 | 20,287,040 | 3,148,499 | ||
Advance from customers | 34,305,508 | 26,037,866 | 4,041,013 | ||
Amounts due to related parties | 3,198,253 | 5,114,422 | 793,746 | ||
Salary and welfare payable | 51,567,587 | 57,101,423 | 8,862,002 | ||
Deferred rent | 1,356,132 | 1,400,795 | 217,400 | ||
Deferred revenue | 221,314,997 | 231,325,052 | 35,901,085 | ||
Accrued expenses and other current liabilities | 300,696,673 | 369,967,995 | 57,418,133 | ||
Income tax payable | 87,483,970 | 66,955,205 | 10,391,285 | ||
Total current liabilities | 869,529,464 | 1,018,189,798 | 158,020,579 | ||
Deferred rent | 28,642,973 | 56,737,678 | 8,805,550 | ||
Deferred revenue | 361,901,369 | 326,029,164 | 50,598,933 | ||
Other long-term liabilities | 115,862,713 | 135,523,772 | 21,032,959 | ||
Deferred tax liabilities | 178,413,413 | 176,422,515 | 27,380,345 | ||
Unrecognized tax benefits | 290,679,902 | 314,534,332 | 48,814,963 | ||
TOTAL LIABILITIES | 1,845,029,834 | 2,027,437,259 | 314,653,329 | ||
Shareholders' equity: | |||||
Class A ordinary shares | 222,587,070 | 222,587,070 | 34,544,972 | ||
Class B ordinary shares | 115,534,210 | 115,534,210 | 17,930,628 | ||
Additional paid-in capital | 1,149,280,404 | 1,150,764,901 | 178,595,912 | ||
Retained earnings | 570,042,924 | 755,706,412 | 117,283,796 | ||
Accumulated other comprehensive income | 45,586,647 | 45,487,996 | 7,059,626 | ||
Total GreenTree Hospitality Group Ltd. | 2,103,031,255 | 2,290,080,589 | 355,414,934 | ||
Non-controlling interests | 146,893,428 | 183,485,361 | 28,476,482 | ||
Total shareholders' equity | 2,249,924,683 | 2,473,565,950 | 383,891,416 | ||
TOTAL LIABILITIES AND | 4,094,954,517 | 4,501,003,209 | 698,544,745 | ||
GreenTree Hospitality Group Ltd. | |||||||||||
Unaudited Condensed Consolidated Statements of Comprehensive Income | |||||||||||
Quarter Ended | Nine Months Ended | ||||||||||
September | September | September | September | September | September | ||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||
Revenues | |||||||||||
Leased-and- | 66,823,544 | 106,518,761 | 16,531,452 | 150,961,027 | 279,514,243 | 43,379,930 | |||||
Franchised-and- | 194,060,899 | 194,002,860 | 30,108,772 | 470,258,096 | 589,609,423 | 91,505,948 | |||||
Others | 5,983,132 | 9,922,553 | 1,539,956 | 19,034,407 | 29,589,847 | 4,592,272 | |||||
Total revenues | 266,867,575 | 310,444,174 | 48,180,180 | 640,253,530 | 898,713,513 | 139,478,150 | |||||
Operating | |||||||||||
Hotel operating | (108,025,295) | (172,797,324) | (26,817,724) | (292,705,145) | (459,464,624) | (71,307,792) | |||||
Selling and | (21,273,500) | (16,450,435) | (2,553,067) | (51,114,478) | (56,271,856) | (8,733,255) | |||||
General and | (44,782,915) | (68,776,812) | (10,673,994) | (121,672,457) | (195,778,639) | (30,384,368) | |||||
Other operating | (434,792) | (760,850) | (118,083) | (1,633,064) | (4,907,140) | (761,576) | |||||
Total operating | (174,516,502) | (258,785,421) | (40,162,868) | (467,125,144) | (716,422,259) | (111,186,991) | |||||
Other operating | 8,577,445 | 3,225,248 | 500,551 | 27,671,358 | 23,278,837 | 3,612,819 | |||||
Income from | 100,928,518 | 54,884,001 | 8,517,863 | 200,799,744 | 205,570,091 | 31,903,978 | |||||
Interest income | 23,140,692 | 15,797,161 | 2,451,680 | 47,861,876 | 45,079,808 | 6,996,276 | |||||
Interest expense | (203,604) | (2,485,865) | (385,800) | (2,941,850) | (9,963,790) | (1,546,356) | |||||
Gains (losses) | 2,905,553 | (16,729,522) | (2,596,381) | (9,734,782) | 27,143,814 | 4,212,654 | |||||
Other income, | 517,981 | 3,495,891 | 542,555 | 517,981 | 3,495,891 | 542,554 | |||||
Income before | 127,289,140 | 54,961,666 | 8,529,917 | 236,502,969 | 271,325,814 | 42,109,106 | |||||
Income tax expense | (41,821,938) | (22,507,756) | (3,493,149) | (72,398,501) | (93,047,550) | (14,440,753) | |||||
Income before | 85,467,202 | 32,453,910 | 5,036,768 | 164,104,468 | 178,278,264 | 27,668,353 | |||||
Share of gains in | 170,211 | 543,250 | 84,311 | 1,118,542 | 1,007,147 | 156,306 | |||||
Net income | 85,637,413 | 32,997,160 | 5,121,079 | 165,223,010 | 179,285,411 | 27,824,659 | |||||
Net | (2,347,248) | 1,438,345 | 223,228 | 10,563,167 | 6,378,077 | 989,863 | |||||
Net income | 83,290,165 | 34,435,505 | 5,344,307 | 175,786,177 | 185,663,488 | 28,814,522 | |||||
Net earnings | |||||||||||
Class A ordinary | 0.81 | 0.33 | 0.05 | 1.71 | 1.80 | 0.28 | |||||
Class B ordinary | 0.81 | 0.33 | 0.05 | 1.71 | 1.80 | 0.28 | |||||
Net earnings | |||||||||||
Class A ordinary | 0.81 | 0.33 | 0.05 | 1.71 | 1.80 | 0.28 | |||||
Class B ordinary | 0.81 | 0.33 | 0.05 | 1.71 | 1.80 | 0.28 | |||||
Weighted | |||||||||||
Class A ordinary | 68,286,954 | 68,286,954 | 68,286,954 | 68,286,954 | 68,286,954 | 68,286,954 | |||||
Class B ordinary | 34,762,909 | 34,762,909 | 34,762,909 | 34,762,909 | 34,762,909 | 34,762,909 | |||||
Other | |||||||||||
Foreign currency | (11,616,690) | 1,275,061 | 197,886 | (7,800,682) | (98,651) | (15,311) | |||||
Unrecognized | 6,750,000 | - | - | 6,750,000 | - | - | |||||
Comprehensive | 80,770,723 | 34,272,221 | 5,318,965 | 164,172,328 | 179,186,760 | 27,809,348 | |||||
Comprehensive | (2,347,248) | 1,438,345 | 223,228 | 10,563,167 | 6,378,077 | 989,862 | |||||
Comprehensive | 78,423,475 | 35,710,566 | 5,542,193 | 174,735,495 | 185,564,837 | 28,799,211 | |||||
GreenTree Hospitality Group Ltd. | |||||||||||||
Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||
September | September | September | September | September | September | ||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
Operating activities: | |||||||||||||
Net income | 85,637,413 | 32,997,160 | 5,121,079 | 165,223,010 | 179,285,411 | 27,824,659 | |||||||
Adjustments to reconcile net | |||||||||||||
Depreciation and amortization | 18,063,004 | 21,297,943 | 3,305,389 | 50,068,849 | 61,735,788 | 9,581,244 | |||||||
Share of (gains) in equity method | (170,211) | (543,250) | (84,311) | (1,118,542) | (1,007,147) | (156,306) | |||||||
Fair value change in returnable | - | - | - | - | (502,712) | (78,020) | |||||||
Gains from disposal of a long-term | - | (3,491,312) | (541,843) | - | (3,491,312) | (541,843) | |||||||
Interest income | (2,217,211) | (2,695,728) | (418,370) | (7,059,071) | (6,550,758) | (1,016,662) | |||||||
Bad debt expense | 4,123,789 | 6,183,876 | 959,723 | 22,052,714 | 26,645,020 | 4,135,242 | |||||||
(Gains)losses from investments in | (2,905,553) | 18,728,741 | 2,906,655 | 9,734,782 | (25,144,595) | (3,902,380) | |||||||
Foreign exchange (gains) losses | (51,687) | (750,812) | (116,524) | (261,556) | 1,756,830 | 272,656 | |||||||
Share-based compensation | - | 537,492 | 83,417 | 232,558 | 1,845,357 | 286,395 | |||||||
Income tax expenses related to | 6,486,874 | - | - | 14,576,403 | - | - | |||||||
Contingent consideration included | 2,046,066 | - | - | 2,046,066 | - | - | |||||||
Changes in operating assets | |||||||||||||
Accounts receivable | (4,658,499) | 4,488,038 | 696,533 | (43,356,590) | (28,358,558) | (4,401,179) | |||||||
Prepaid rent | 642,280 | 8,674,595 | 1,346,276 | 10,564,530 | (5,522,373) | (857,059) | |||||||
Inventories | (1,274,556) | (146,806) | (22,784) | (1,511,933) | 1,533,638 | 238,017 | |||||||
Amounts due from related parties | 8,625,331 | 3,274,808 | 508,242 | 10,135,528 | (598,730) | (92,921) | |||||||
Other current assets | (18,021,028) | 12,185,993 | 1,891,236 | (3,193,950) | (111,534,002) | (17,309,805) | |||||||
Other assets | (8,142,812) | (10,374,644) | (1,610,120) | (17,157,334) | (18,159,564) | (2,818,320) | |||||||
Accounts payable | 4,598,670 | 2,194,915 | 340,645 | 7,487,666 | 680,702 | 105,643 | |||||||
Amounts due to related parties | 521,868 | (241,489) | (37,479) | (1,526,433) | 1,916,169 | 297,385 | |||||||
Salary and welfare payable | 8,405,275 | 264,466 | 41,044 | 9,778,026 | 5,533,836 | 858,838 | |||||||
Deferred revenue | 6,439,785 | (1,658,924) | (257,461) | (32,603,970) | (25,862,150) | (4,013,743) | |||||||
Advance from customers | (339,768) | (1,678,033) | (260,427) | (8,097,688) | (8,122,664) | (1,260,618) | |||||||
Accrued expenses and other | 36,865,011 | (1,709,467) | (265,305) | 16,760,864 | 50,679,045 | 7,865,264 | |||||||
Income tax payable | 15,896,890 | 15,513,591 | 2,407,672 | (30,522,077) | (20,528,765) | (3,186,014) | |||||||
Unrecognized tax benefits | 16,917,849 | 2,454,572 | 380,944 | 13,707,938 | 23,854,430 | 3,702,149 | |||||||
Deferred rent | 632,148 | 12,736,350 | 1,976,651 | 4,783,547 | 28,139,368 | 4,367,161 | |||||||
Other long-term liabilities | 424,893 | 5,577,611 | 865,632 | 1,603,859 | 19,811,059 | 3,074,628 | |||||||
Deferred taxes | (3,180,335) | (7,044,162) | (1,093,237) | (15,548,950) | 11,645,398 | 1,807,337 | |||||||
Net cash provided by operating | 175,365,486 | 116,775,524 | 18,123,277 | 176,798,246 | 159,678,721 | 24,781,748 | |||||||
Investing activities: | |||||||||||||
Purchases of property and | (26,948,009) | (93,109,989) | (14,450,444) | (68,576,946) | (250,998,814) | (38,954,405) | |||||||
Purchases of intangible assets | - | (201,746) | (31,310) | (9,075) | (201,746) | (31,310) | |||||||
Proceeds from disposal of | 60,262 | - | - | 71,387 | - | - | |||||||
Payment for acquisition of minority | - | - | - | - | (868,388) | (134,772) | |||||||
Acquisitions, net of cash received | (6,660,000) | (4,112,459) | (638,244) | (7,915,807) | (177,241,084) | (27,507,385) | |||||||
Advances for purchases of | - | - | - | - | (204,889,383) | (31,798,334) | |||||||
Repayment of advances for | - | 22,400,000 | 3,476,425 | - | 22,400,000 | 3,476,425 | |||||||
Repayment of advances for | 872,700 | 1,069,500 | 165,984 | 36,312,700 | 11,217,500 | 1,740,929 | |||||||
Purchases of short-term | (610,180) | (61,635,884) | (9,565,739) | (148,300,207) | (199,922,194) | (31,027,438) | |||||||
Proceeds from short-term | 8,817,211 | 42,805,509 | 6,643,311 | 407,451,316 | 399,540,539 | 62,007,719 | |||||||
Proceeds from sales of long-term | - | - | - | - | 50,000,000 | 7,759,878 | |||||||
Increase of long-term time | - | - | - | (30,000,000) | (130,000,000) | (20,175,684) | |||||||
Proceeds from disposal of equity | 5,345,656 | - | - | 7,886,074 | 211,307,112 | 32,794,350 | |||||||
Proceeds from disposal of equity | - | - | 6,380,000 | - | - | ||||||||
Loan to related parties | (119,400,000) | (52,546,988) | (8,155,165) | (304,766,500) | (284,292,548) | (44,121,512) | |||||||
Repayment from related parties | 111,100,000 | 1,750,000 | 271,596 | 297,256,179 | 150,415,500 | 23,344,120 | |||||||
Loan to third parties | (3,800,000) | - | - | (7,000,000) | (10,500,000) | (1,629,574) | |||||||
Repayment of loan from third | - | - | - | - | 46,500,000 | 7,216,687 | |||||||
Loan to franchisees | (59,310,002) | (121,148,898) | (18,802,014) | (205,761,780) | (581,584,192) | (90,260,451) | |||||||
Repayment from franchisees | 35,586,060 | 93,467,363 | 14,505,907 | 70,801,095 | 277,141,562 | 43,011,696 | |||||||
Net cash (used in) provided by | (54,946,302) | (171,263,592) | (26,579,693) | 53,828,436 | (671,976,136) | (104,289,061) | |||||||
Financing activities: | |||||||||||||
Loan from non-controlling interest | - | - | - | - | 2,792,853 | 433,444 | |||||||
Repayment of short-term | (10,000,000) | (50,000,000) | (7,759,878) | (10,000,000) | (50,000,000) | (7,759,878) | |||||||
Proceeds from short-term | 2,997,225 | - | - | 21,437,555 | 140,000,000 | 21,727,659 | |||||||
Capital contribution from | 2,884,202 | 1,650,000 | 256,076 | 6,262,589 | 8,681,000 | 1,347,270 | |||||||
Net cash provided by (used in) | (4,118,573) | (48,350,000) | (7,503,802) | 17,700,144 | 101,473,853 | 15,748,495 | |||||||
Effect of exchange rate changes | (1,474,708) | (220,197) | (34,174) | (882,510) | (1,615,286) | (250,687) | |||||||
Net increase(decrease) in cash | 114,825,903 | (103,058,265) | (15,994,392) | 247,444,316 | (412,438,848) | (64,009,505) | |||||||
Cash and cash equivalents and | 474,778,636 | 324,347,526 | 50,337,947 | 342,160,223 | 633,728,109 | 98,353,060 | |||||||
Cash and cash equivalents and | 589,604,539 | 221,289,261 | 34,343,555 | 589,604,539 | 221,289,261 | 34,343,555 | |||||||
GreenTree Hospitality Group Ltd. | |||||||||||||
Unaudited Reconciliation of GAAP and Non-GAAP Results | |||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||
September | September | September | September | September | September | ||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
Net income | 85,637,413 | 32,997,160 | 5,121,079 | 165,223,010 | 179,285,411 | 27,824,659 | |||||||
Deduct: | |||||||||||||
Other operating income | 8,577,445 | 3,225,248 | 500,551 | 27,671,358 | 23,278,837 | 3,612,819 | |||||||
Interest income and other, | 23,140,692 | 15,797,161 | 2,451,681 | 47,861,876 | 45,079,808 | 6,996,276 | |||||||
Gains from investment in | 2,905,553 | - | - | 45,440,136 | 27,143,814 | 4,212,654 | |||||||
Share of gains in equity | 170,211 | 543,250 | 84,311 | 1,118,542 | 1,007,147 | 156,307 | |||||||
Other income, net | 517,981 | 3,495,891 | 542,554 | 517,981 | 3,495,891 | 542,554 | |||||||
Add: | |||||||||||||
Other operating expenses | 434,792 | 760,850 | 118,082 | 1,633,064 | 4,907,140 | 761,576 | |||||||
Income tax expense | 41,821,938 | 22,507,756 | 3,493,149 | 72,398,501 | 93,047,550 | 14,440,753 | |||||||
Interest expense | 203,604 | 2,485,865 | 385,800 | 2,941,850 | 9,963,790 | 1,546,356 | |||||||
Depreciation and | 18,063,004 | 21,297,943 | 3,305,389 | 50,068,849 | 61,735,788 | 9,581,244 | |||||||
Losses from investment in | - | 16,729,522 | 2,596,381 | 55,174,918 | - | - | |||||||
Adjusted EBITDA(Non- | 110,848,869 | 73,717,546 | 11,440,783 | 224,830,299 | 248,934,182 | 38,633,978 | |||||||
Quarter Ended | Nine Months Ended | ||||||||||||
September | September | September | September | September | September | ||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
Net income | 85,637,413 | 32,997,160 | 5,121,079 | 165,223,010 | 179,285,411 | 27,824,659 | |||||||
Deduct: | |||||||||||||
Government subsidies (net | 1,005,153 | 287,650 | 44,643 | 14,217,238 | 11,422,522 | 1,772,748 | |||||||
Gains from investment in | 2,179,165 | - | - | 34,080,102 | 20,357,861 | 3,159,490 | |||||||
Other income (net of 25% | 388,486 | 2,621,918 | 406,915 | 388,486 | 2,621,918 | 406,915 | |||||||
Add: | |||||||||||||
Share-based compensation | - | 537,492 | 83,417 | 232,558 | 1,845,357 | 286,395 | |||||||
Losses from investments in | - | 12,547,142 | 1,947,286 | 50,081,189 | - | - | |||||||
One-time fees and | 3,839,368 | 7,004,623 | 1,087,100 | 3,839,368 | 21,711,927 | 3,369,638 | |||||||
Asset impairment/Accrued | - | - | - | 9,501,082 | 4,523,574 | 702,048 | |||||||
Income tax expenses | 6,486,874 | - | - | 14,576,403 | - | - | |||||||
Core net income(Non- | 92,390,851 | 50,176,849 | 7,787,325 | 194,767,784 | 172,963,968 | 26,843,587 | |||||||
Core net income per ADS | |||||||||||||
Class A ordinary share- basic and diluted | 0.90 | 0.49 | 0.08 | 1.89 | 1.68 | 0.26 | |||||||
Class B ordinary share- | 0.90 | 0.49 | 0.08 | 1.89 | 1.68 | 0.26 | |||||||
Operational Data
2020 Q3 | 2021 Q3 | ||||
Total hotels in operation: | 4,195 | 4,626 | |||
Leased-and-owned hotels | 37 | 62 | |||
Franchised hotels | 4,158 | 4,564 | |||
Total hotel rooms in operation | 305,125 | 334,162 | |||
Leased-and-owned hotels | 4,620 | 7,062 | |||
Franchised hotels | 300,505 | 327,100 | |||
Number of cities | 341 | 362 | |||
Quarter Ended | |||||
2020 Q3 | 2021 Q3 | ||||
Occupancy rate (as a | |||||
Leased-and-owned | 70.6% | 65.2% | |||
Franchised hotels | 79.3% | 72.6% | |||
Blended | 79.1% | 72.4% | |||
Average daily rate (in | |||||
Leased-and-owned | 171 | 223 | |||
Franchised hotels | 151 | 161 | |||
Blended | 151 | 163 | |||
RevPAR (in RMB) | |||||
Leased-and-owned | 121 | 146 | |||
Franchised hotels | 120 | 117 | |||
Blended | 120 | 118 | |||
Number of Hotels in Operation | Number of Hotel Rooms in | |||
2020 Q3 | 2021 Q3 | 2020 Q3 | 2021 Q3 | |
Luxury | 20 | 30 | 4,042 | 5,974 |
Argyle | 20 | 30 | 4,042 | 5,974 |
Mid-to-up-scale | 337 | 488 | 30,303 | 44,662 |
GreenTree Eastern | 137 | 189 | 14,305 | 20,283 |
Deepsleep Hotel | 3 | 6 | 221 | 417 |
Gem | 33 | 41 | 3,016 | 3,770 |
Gya | 39 | 59 | 3,340 | 5,030 |
Vx | 32 | 74 | 2,563 | 6,589 |
Ausotel | 12 | 16 | 1,561 | 2,109 |
Urban Garden and | 81 | 103 | 5,297 | 6,464 |
Mid-scale | 2,684 | 2,912 | 217,922 | 229,632 |
GreenTree Inn | 2,113 | 2,147 | 178,179 | 177,770 |
GT Alliance | 321 | 513 | 24,560 | 36,534 |
GreenTree Apartment | 13 | 16 | 862 | 1,098 |
Vatica | 123 | 112 | 8,925 | 8,115 |
City 118 Selected and | 114 | 124 | 5,396 | 6,115 |
Economy hotels | 1,154 | 1,196 | 52,858 | 53,894 |
Shell | 593 | 633 | 25,791 | 27,406 |
City 118 and others[1] | 561 | 563 | 27,067 | 26,488 |
Total | 4,195 | 4,626 | 305,125 | 334,162 |
For more information, please contact:
GreenTree
Ms. Selina Yang
Phone: +86-21-3617-4886 ext. 7999
E-mail: [email protected]
Mr. Nicky Zheng
Phone: +86-21-3617-4886 ext. 6708
E-mail: [email protected]
Christensen
In Shanghai
Ms. Constance Zhang
Phone: +86-138-1645-1798
E-mail: [email protected]
In Hong Kong
Ms. Karen Hui
Phone: +852-9266-4140
E-mail: [email protected]
In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: [email protected]
SOURCE GreenTree Hospitality Group Ltd.
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