SHANGHAI, Nov. 21, 2024 /PRNewswire/ — GreenTree Hospitality Group Ltd. (NYSE: GHG) (“GreenTree”, the “Company”, “we”, “us” and “our”), a leading hospitality and restaurant management group in China, today announced its unaudited financial results for the third quarter of 2024.
[1] The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US$1.00=RMB 7.0176 on September 30, 2024 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20220103/.
[2] Adjusted EBITDA (non-GAAP) is calculated as net income plus other operating expenses, income tax expense, share of loss in equity investees, net of tax, interest expense, depreciation and amortization, losses from investment in equity securities and other general expenses, 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 above mentioned definition.
[3] Core net income is calculated as net income plus share-based compensation, losses from investments in equity securities (net of 25% tax), other expense(net of 25% tax), one-time fees and expense, and other general expenses 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).
Third Quarter of 2024 Operational Highlights
Hotels
Restaurants
Our hotel business improved in the third quarter over the first two quarters of this year as the economy continued to recover. Travel consumption returned to a more normal pattern following last year’s surge, which has influenced year-over-year comparisons. We are back to a more positive environment, focusing on growing our pipeline and upgrading numerous hotels across our portfolio. We are confident that we are on the right track and will benefit from the ongoing stimulus measures implemented by the government.
Our restaurant business’ net income remained positive for a second consecutive quarter as we continued to grow the number of franchised street stores and stores with stable consumer traffic. Such stores now account for 55.5% of our store count compared to 44.6% a year ago. Following the closing of unprofitable stores over the past year, the number restaurants in operation had stabilized at 182 at the end of quarter and we are now focused on growing that number,” said Mr. Alex S. Xu, Chairman and Chief Executive Office of GreenTree.
Quarter Ended
September
30, 2023
September
30, 2023
September
30, 2023
September
30, 2023
RMB
RMB
RMB
RMB
Hotel
Restaurant
Elimination
Total
Revenues
Leased-and-operated revenues
151,839,044
80,358,490
49,624
232,247,158
Franchised-and-managed
revenues
186,043,016
4,070,541
–
190,113,557
Wholesales and others
1,168,017
37,355,462
–
38,523,479
Total revenues
339,050,077
121,784,493
49,624
460,884,194
Quarter Ended
September
30, 2024
September
30, 2024
September
30, 2024
September
30, 2024
September
30, 2024
RMB
RMB
RMB
RMB
US$
Hotel
Restaurant
Elimination
Total
Total
Revenues
Leased-and-operated
revenues
118,159,125
41,117,277
–
159,276,402
22,696,706
Franchised-and-managed
revenues
167,928,127
1,757,933
–
169,686,060
24,180,070
Wholesales and others
796,488
27,766,790
(544,290)
28,018,988
3,992,674
Total revenues
286,883,740
70,642,000
(544,290)
356,981,450
50,869,450
Nine Month Ended
September
30, 2023
September
30, 2023
September
30, 2023
September
30, 2023
RMB
RMB
RMB
RMB
Hotel
Restaurant
Elimination
Total
Revenues
Leased-and-operated
revenues
365,402,970
248,698,564
(1,075,555)
613,025,979
Franchised-and-managed
revenues
533,460,017
7,235,800
–
540,695,817
Wholesales and others
3,393,596
97,978,792
–
101,372,388
Total revenues
902,256,583
353,913,156
(1,075,555)
1,255,094,184
Nine Month Ended
September
30, 2024
September
30, 2024
September
30, 2024
September
30, 2024
September
30, 2024
RMB
RMB
RMB
RMB
US$
Hotel
Restaurant
Elimination
Total
Total
Revenues
Leased-and-operated
revenues
346,552,738
130,792,112
–
477,344,850
68,021,097
Franchised-and-managed
revenues
476,898,409
5,527,686
–
482,426,095
68,745,169
Wholesales and others
2,881,694
77,272,388
(1,004,493)
79,149,589
11,278,726
Total revenues
826,332,841
213,592,186
(1,004,493)
1,038,920,534
148,044,992
Total revenues were RMB357.0 million (US$50.9 million), a 22.5% year-over-year decrease.
Hotel revenues were RMB286.9 million (US$40.9 million), a 15.4% year-over-year decrease due to a 13.6% year-over-year decrease in Revpar and the closure of 6 L&O hotels in the third quarter due to lease expiration and strategic reviews. The decrease was partially offset by revenues from new openings.
Restaurant revenues were RMB70.6 million (US$10.1 million), a 42.0% year-over-year decrease, mainly due to lower ADS and the decrease in the number of L&O stores. By the end of the third quarter, we had completed the strategic transformation of our business model.
Total revenues for the first nine months of 2024 were RMB1,038.9 million (US$148.0 million)[1], a 17.2% year-over-year decrease.
Total revenues from leased-and-operated, or L&O, hotels and restaurants were RMB159.3 million (US$22.7 million)[1], a 31.4% year-over-year decrease.
Total revenues from L&O hotels were RMB118.2 million (US$16.8 million)[1], a 22.2% year-over-year decrease. The decrease was primarily attributable to an 7.5% year-over-year decrease in the third quarter RevPAR of L&O hotels, the closing of 6 L&O hotels, and a reduction in sublease revenues mainly due to the disposal of a property.
Total revenues from L&O restaurants were RMB41.1 million (US$5.9 million)[1], a 48.8% year-over-year decrease, mainly due to the closure of 29 L&O restaurants since the third quarter of 2023 and the year-over-year decrease in ADS.
Total revenues from L&O hotels and restaurants for the first nine months of 2024 were RMB477.3 million (US$68.0 million)[1], a 22.1% year-over-year decrease.
Total revenues from franchised-and-managed, or F&M, hotels and restaurants were RMB169.7 million (US$24.2 million), a 10.7% year-over-year decrease.
Total revenues from F&M hotels were RMB167.9 million (US$23.9 million), a 9.7% year-over-year decrease, primary due to a 13.8% decrease in F&M hotels’ Revpar and partially offset by new openings.
Total revenues from F&M restaurants were RMB1.8 million (US$0.3 million), a 56.8% year-over-year decrease, mainly due to the year-over-year decrease in ADS.
Total revenues from F&M hotels and restaurants for the first nine months of 2024 were RMB482.4 million (US$68.7 million)[1], a 10.8% year-over-year decrease.
Total revenues from wholesale and others were RMB28.0M (US$4.0 million), a 27.3% year-over-year decrease, mainly due to the decline in the wholesale segment of the restaurant business.
Total revenues from wholesale and others for the first nine months of 2024 were RMB79.1 million (US$11.3 million), a 21.9% year-over-year decrease.
Total operating costs and expenses
Quarter Ended
September
30, 2023
September
30, 2023
September
30, 2023
September
30, 2023
RMB
RMB
RMB
RMB
Hotel
Restaurant
Elimination
Total
Operating costs and
expenses
Operating costs
159,920,582
87,814,484
49,623
247,784,689
Selling and marketing
expenses
14,277,225
12,026,085
–
26,303,310
General and administrative
expenses
26,655,780
11,858,500
–
38,514,280
Other operating expenses
180,515
120,654
–
301,169
Other general expenses
11,322,509
–
–
11,322,509
Total operating costs and
expenses
212,356,611
111,819,723
49,623
324,225,957
Quarter Ended
September
30, 2024
September
30, 2024
September
30, 2024
September
30, 2024
September
30, 2024
RMB
RMB
RMB
RMB
US$
Hotel
Restaurant
Elimination
Total
Total
Operating costs and
expenses
Operating costs
152,278,796
53,365,650
(475,648)
205,168,798
29,236,320
Selling and marketing
expenses
12,899,411
2,881,942
(68,642)
15,712,711
2,239,043
General and
administrative
expenses
35,309,079
7,023,449
–
42,332,528
6,032,337
Other operating
expenses
1,363,201
654,777
–
2,017,978
287,560
Other general
expenses
–
–
–
–
–
Total operating costs
and expenses
201,850,487
63,925,818
(544,290)
265,232,015
37,795,260
Nine Month Ended
September
30, 2023
September
30, 2023
September
30, 2023
September
30, 2023
RMB
RMB
RMB
RMB
Hotel
Restaurant
Elimination
Total
Operating costs and
expenses
Operating costs
444,284,960
292,122,643
(560,465)
735,847,138
Selling and marketing
expenses
39,115,830
21,411,730
–
60,527,560
General and administrative
expenses
117,191,327
33,197,310
–
150,388,637
Other operating expenses
1,024,079
7,111,308
–
8,135,387
Other general expenses
27,296,093
–
–
27,296,093
Total operating costs and
expenses
628,912,289
353,842,991
(560,465)
982,194,815
Nine Month Ended
September
30, 2024
September
30, 2024
September
30, 2024
September
30, 2024
September
30, 2024
RMB
RMB
RMB
RMB
US$
Hotel
Restaurant
Elimination
Total
Total
Operating costs and
expenses
Operating costs
441,888,078
170,642,273
(916,517)
611,613,834
87,154,274
Selling and marketing
expenses
41,576,925
8,473,078
(87,975)
49,962,028
7,119,532
General and
administrative
expenses
128,706,277
22,802,128
–
151,508,405
21,589,775
Other operating
expenses
2,301,445
2,136,726
–
4,438,171
632,434
Other general
expenses
11,756,531
–
–
11,756,531
1,675,292
Total operating costs
and expenses
626,229,256
204,054,205
(1,004,492)
829,278,969
118,171,308
Operating costs were 205.2 million (US$ 29.2 million)[1], a 17.2% year-over-year decrease.
Operating costs of the hotel business were RMB152.3 million (US$21.7million)[1], a 4.8% year-over-year decrease. The decrease was mainly attributable to lower staff related costs due to the disposal of L&O hotels.
Operating costs of the restaurant business in the third quarter of 2024 were RMB53.4 million (US$ 7.6 million)[1], a 39.2% year-over-year decrease, due to the closure of L&O stores.
For the first nine months of 2024, operating costs were RMB611.6 million (US$87.2 million)[1], a 16.9% decrease.
Selling and marketing expenses were RMB15.7 million (US$2.2 million)[1], a 40.3% year-over-year decrease.
Selling and marketing expenses of the hotel business were RMB12.9 million (US$1.8 million)[1], a 9.7% year-over-year decrease. The decrease was mainly due to lower advertising expenses.
Selling and marketing expenses of the restaurant business were RMB2.9 million (US$0.4 million)[1], a 76.0% year-over-year decrease, mainly attributable to lower sales staff related expenses and lower sales-channel commissions.
For the first nine months of 2024, selling and marketing expenses were RMB50.0 million (US$7.1 million)[1], a 17.5% decrease.
General and administrative, or G&A expenses were
