GreenTree Hospitality Group Ltd (GHG) 2024 Q2 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for GreenTree's second quarter of 2024 earnings conference call. (Operator Instructions) As a reminder, today's conference call is being recorded.

女士們、先生們，大家好。感謝您出席格林豪泰 2024 年第二季財報電話會議。（操作員說明）提醒一下，今天的電話會議正在錄音。

I would now like to turn the meeting over to your host for today's call, Mr. Rene Vanguestaine of Christensen. Please proceed, Rene.

現在我想將會議交給今天的主持人克里斯滕森的雷內·範格斯坦先生。請繼續，雷內。

Thank you, Rocco. Hello, everyone, and thank you for joining us. GreenTree's earnings release was distributed earlier today and is available on our IR website at ir.998.com, as well as on PR Newswire services. As a reminder, we also posted a PowerPoint presentation on our website. that accompanies our comments to the same IR website.

謝謝你，羅科。大家好，感謝您加入我們。格林豪泰的財報於今天稍早發布，可在我們的投資者關係網站 ir.998.com 以及美通社服務上取得。作為提醒，我們也在我們的網站上發布了 PowerPoint 簡報。這伴隨著我們對同一個投資者關係網站的評論。

On the call from GreenTree are Mr. Alex Xu, Chairman and Chief Executive Officer; Ms. Selina Yang, Chief Financial Officer; and Mr. [Jason Zhang], our new Financial Director. Jason replaces our former Financial Director, Ms. Ellen Zhao, who officially retired earlier this month. Mr. Xu will present the company's performance overview of the second quarter of 2024, and Ms. Yang and Mr. Zhang will then discuss financials and guidance. They will all be available to answer your questions during the Q&A session which follows.

格林豪泰董事長兼執行長徐先生接聽了電話；楊女士，財務長；以及我們的新任財務長[Jason Zhang]先生。Jason 接替了我們的前財務長 Ellen Zhao 女士，她於本月初正式退休。徐先生將介紹公司 2024 年第二季的業績概覽，楊女士和張先生隨後將討論財務和指引。他們都將在接下來的問答環節回答您的問題。

Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995.

在我們開始之前，我想提醒您，本次電話會議包含經修訂的 1934 年證券交易法第 21E 條含義以及 1995 年美國私人證券訴訟改革法案中定義的前瞻性陳述。

These forward-looking statements can be identified by terminologies such as may, will, expect, anticipates, aims, future, intends, plans, believes, estimates, continue, target, is, or, are likely to, going forward, confident, outlook, and similar statements.

這些前瞻性陳述可以透過以下術語來識別：可能、將、期望、預期、目標、未來、打算、計劃、相信、估計、繼續、目標、是或可能、前進、自信、展望，以及類似的陳述。

Any statements that are not historical facts, including statements about the company and its industry, are forward-looking statements. Such statements are based upon management's current expectation and current market and operating conditions and relate to events that involve known and unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements.

任何非歷史事實的陳述，包括有關公司及其行業的陳述，均為前瞻性陳述。此類陳述基於管理層當前的預期以及當前的市場和經營狀況，並涉及涉及已知和未知風險、不確定性和其他因素的事件，所有這些都難以預測，並且其中許多因素超出了公司的控制範圍，這可能會導致公司的實際業績、業績或成就與前瞻性陳述中的結果、業績或成就有重大差異。

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 US Securities and Exchange Commission.

您不應過度依賴這些前瞻性陳述。有關這些和其他風險、不確定性或因素的更多資​​訊包含在該公司向美國證券交易委員會提交的文件中。

All information provided, including the forward-looking statements made during this conference call, are current as of today's date, the company does not undertake any obligations to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

提供的所有信息，包括本次電話會議期間做出的前瞻性陳述，均為截至今日的最新信息，本公司不承擔因新信息、未來事件或其他原因而更新任何前瞻性陳述的義務，除非根據適用法律的要求。

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

現在我很高興向您介紹我們的董事長兼執行長徐先生。徐先生，請講。

Thanks, Rene, and hello everyone, and thank you for joining us today. In the second quarter, we faced the challenges as China's economy continued to recover. We believe both consumers and business exercised caution in discretionary spending, which had a negative impact on our overall performance.

謝謝雷內，大家好，謝謝您今天加入我們。二季度，我國經濟持續復甦，我們面臨挑戰。我們認為消費者和企業在可自由支配支出方面都保持謹慎，這對我們的整體業績產生了負面影響。

However, we continued to upgrade a number of hotels in our portfolio in order to better respond to increasing competition. While we believe this will help our performance in the future, second quarter hotel revenue did decrease 14.8% year over year.

然而，我們繼續對投資組合中的一些酒店進行升級，以便更好地應對日益激烈的競爭。雖然我們相信這將有助於我們未來的業績，但第二季飯店營收確實比去年同期下降了 14.8%。

We continued to execute on our strategy to return our restaurant business to profitability by moving away from leased and operated restaurants in supermarkets and regional shopping centers towards franchised street stores.

我們繼續執行我們的策略，透過從超市和區域購物中心租賃和經營的餐廳轉向特許經營的街頭商店，使我們的餐廳業務恢復盈利。

As a result, the net income turned positive this quarter after breaking even last quarter compared to losses in both corresponding quarters a year ago. Our focus is now fully on growing the number of franchised street stores and the stores with stable consumer traffic.

因此，與去年同期兩季的虧損相比，上季達到損益平衡後，本季淨利轉正。我們現在的重點是增加專營街店和客流量穩定的商店的數量。

Please turn to slide 5. Compared with the second quarter of 2023, hotel RevPAR was RMB125, down 10.8% and the restaurant ADS, that's average daily sales per store, was RMB4,737, down 22.1%. Total revenues were RMB329.7 million, down 20.5%. Hotel revenues were RMB264.6 million, that's down 14.8%, mainly due to a 10.8% year-over-year decrease in RevPAR and the closure of some hotels and partially offset by new openings.

請翻到投影片 5。與2023年第二季相比，飯店RevPAR為人民幣125元，下降10.8%，餐廳ADS（即每店日均銷售額）為人民幣4,737元，下降22.1%。總收入為人民幣3.297億元，下降20.5%。酒店收入為人民幣2.646億元，下降14.8%，主要是由於每間客房收入同比下降10.8%以及部分酒店的關閉和新開業酒店的部分抵消。

Restaurant revenue decreased to RMB65.3 million as we continued to execute on our strategy to reposition this business and close a number of underperforming restaurants. Income from operations decreased to RMB84.4 million, with a margin of 25.6%. Net income was RMB62.3 million, down 38.9%, with a margin of 18.9%. Adjusted EBITDA non-GAAP was RMB83.1 million, down 34.5%, with a margin of 25.2%.

由於我們繼續執行重新定位該業務的策略並關閉了一些表現不佳的餐廳，餐廳收入下降至人民幣 6530 萬元。營業收入下降至人民幣8,440萬元，利潤率為25.6%。淨利為人民幣6,230萬元，下降38.9%，利潤率為18.9%。調整後 EBITDA 非公認會計準則為人民幣 8,310 萬元，下降 34.5%，利潤率為 25.2%。

Slide 6 shows detailed the number of total revenues, income from operations, net income and adjusted EBITDA.

幻燈片 6 顯示了總收入、營運收入、淨利潤和調整後 EBITDA 的詳細數據。

Slide 7 shows the trend in our quarterly operation performance. In the second quarter, compared to a year ago, RevPAR for our LO hotels decreased by 7.3% to RMB177. RevPAR for our FM hotels decreased by 10.9% to RMB124. ADR for our LO hotels decreased by 2.1% to RMB250. And ADR for our FM hotels decreased by 4.4% to RMB117 -- RMB171. Occupancy at our LO hotels was down 3.9% to 70.7% and occupancy at our FM hotels was down 5.3% to 72.6%.

投影片 7 顯示了我們季度營運業績的趨勢。第二季度，與去年同期相比，我們LO飯店的RevPAR下降了7.3%至人民幣177元。我們 FM 酒店的 RevPAR 下降 10.9% 至 124 元人民幣。我們的本地酒店平均房價下降 2.1% 至 250 元。我們 FM 飯店的平均房價下降了 4.4%，至 117 元至 171 元。LO 飯店的入住率下降 3.9% 至 70.7%，FM 飯店的入住率下降 5.3% 至 72.6%。

Slide 8 highlights the growth in our membership programs, which accounted for most of our direct sales. Individual memberships grow to 96 million, up from 84 million a year ago, and the corporate memberships grow to 2.1 million, up from 1.96 million a year ago.

投影片 8 強調了我們會員計畫的成長，會員計畫占我們直接銷售的大部分。個人會員從一年前的8400萬增加到9600萬，企業會員從一年前的196萬增加到210萬。

Slide 9 shows the operating performance of restaurants with ADS down 22.1% year over year at RMB4,737, but up sequentially. Starting with slide 11, I will review our strategic execution across our businesses. In our hotel business, we further expanded in the mid-to-upscale segment and in Tier 3 and the lower cities in South China.

幻燈片9顯示，持有ADS的餐廳經營業績年減22.1%至人民幣4,737元，但較上季上升。從投影片 11 開始，我將回顧我們整個業務的策略執行情況。飯店業務進一步拓展中高檔及華南三線及以下城市。

As you can see on slide 12, we continue to grow our mid-to-upscale segment with 505 hotels, that's 11.8% of our total portfolio at the end of this quarter. While the mid-scale segment remains the core of our hotel business at 69%, we continue our expansion into the higher-end segment. The economy segment ended the quarter at 19.2%.

正如您在投影片 12 中看到的那樣，我們繼續擴大中高檔細分市場，擁有 505 家飯店，佔本季末我們總投資組合的 11.8%。雖然中檔細分市場仍然是我們酒店業務的核心（佔 69%），但我們繼續向高端細分市場擴張。經濟部門本季末成長率為 19.2%。

Please turn to slide 13. We continue to expand in Tier 3 and the lower cities, and the 72.3% of our hotels in our current pipelines are in such cities and we'll further capitalize on the substantial opportunities in these locations.

請翻到投影片 13。我們繼續在三線及以下城市擴張，我們目前正在建造的酒店72.3%都位於這些城市，我們將進一步利用這些地區的大量機會。

On slide 14, we continued to focus on increasing the profitability of our restaurant business. To achieve this, we have implemented a three-pronged approach to reposition the business. First, closing unprofitable LO stores, increasing the proportion of FM stores, and expanding the number of street stores. Franchised and managed restaurant accounted for 86.9% at the end of the quarter, compared to 72.3% a year ago and the street stores accounted for 45.4%, compared to 37.9% a year ago.

在投影片 14 中，我們繼續專注於提高餐廳業務的獲利能力。為了實現這一目標，我們採取了三管齊下的方法來重新定位業務。一是關閉不營利的LO店，增加FM店比例，擴大臨街店數。截至本季末，特許經營和管理餐廳佔 86.9%，而去年同期為 72.3%；街頭商店佔 45.4%，去年同期為 37.9%。

Next, Selina Yang and Jason Zhang will review operating and financial highlights.

接下來，Selina Yang 和 Jason Zhang 將回顧營運和財務亮點。

Thank you, Alex. I will review our hotel business. Please turn to slide 16. In the second quarter, total hotel revenues decreased 14.8% to RMB264.6 million, compared to the second quarter of 2023. Total revenues from LO hotels were RMB105.9 million, down 19.5% year over year. The decrease was primarily attributable to a 7.3% year-over-year decrease in the second quarter RevPAR of LO hotels.

謝謝你，亞歷克斯。我將回顧一下我們的酒店業務。請翻到投影片 16。與2023年第二季相比，第二季飯店總收入下降14.8%至人民幣2.646億元。LO酒店的總收入為人民幣1.059億元，較去年同期下降19.5%。下降的主因是第二季LO飯店的RevPAR年減7.3%。

Five LO hotels closed and a reduction of subleased revenues, mainly due to the disposal of property. Total revenues from FM hotels decreased 11.3% to RMB157.8 million. The decrease was mainly due to a decrease in FM hotels RevPAR and remodeling.

五家 LO 飯店關閉，轉租收入減少，主要原因是財產處置。FM 飯店總收入下降 11.3% 至 1.578 億元。下降的主要原因是 FM 酒店 RevPAR 和改造的減少。

On slide 17, total hotel operating costs and expenses increased 2.1% year over year to RMB217.7 million. Operating costs decreased 4.5% to RMB143.4 million year over year, which was mainly due to the lower personnel costs, lower hotel-related material consumption, and the lower utilities gave a lower occupancy rate and the closure of LO hotels, offset by increased rental costs and D&A due to newly opened LO hotels since the third quarter of last year.

在投影片 17 中，飯店總營運成本和費用年增 2.1% 至 2.177 億元。營運成本較去年同期下降4.5%至人民幣1.434億元，主要是由於人員成本下降、酒店相關材料消耗下降、公用事業費用下降導致入住率下降以及本地酒店關閉，但被自去年第三季度以來新開業的LO酒店的租金成本和D&A。

Salary and marketing expenses were RMB13.2 million, a year-over-year decrease of RMB0.5 million, mainly due to lower advertising expenses.

薪資及行銷費用為人民幣1,320萬元，較去年同期減少人民幣50萬元，主要是因為廣告費用減少。

General and administrative expenses were RMB54.9 million, up 23.6% compared with the third quarter of last year. The increase was mainly due to an increase in bad debt provisions for long-aged accounts receivables.

一般及行政費用為人民幣5,490萬元，較去年第三季成長23.6%。增加的主要原因是長期應收帳款壞帳準備增加。

Turning to slide 18, due to the decline in revenue, our hotel business saw a decrease in profitability in the second quarter. Income from hotel operations decreased from RMB108.5 million to RMB81.6 million year over year. Net income was RMB63.1 million, compared to RMB114 million in the second quarter of last year. Adjusted EBITDA of hotel business decreased 37% to RMB81.9 million and the core net income decreased to 22.4% to RMB67.6 million year over year.

轉向幻燈片18，由於收入下降，我們的酒店業務第二季度盈利能力下降。旅館經營收入較去年由人民幣108.5百萬元減少至人民幣81.6百萬元。淨利潤為人民幣 6,310 萬元，去年第二季為 1.14 億元。飯店業務調整後EBITDA年減37%至人民幣8,190萬元，核心淨利年減22.4%至人民幣6,760萬元。

Next, let me turn the call over to Jason for the review of our restaurant business.

接下來，讓我將電話轉給傑森，以審查我們的餐廳業務。

Please turn to slide 19, in the second quarter, we continued to refresh our restaurant business and open more franchised and managed stores. Total revenues were RMB35.3 million, down 37.8% year over year, and total costs and expenses decreased 44% year over year to RMB34.3 million. Mainly due to lower ADS and a decrease in the number of LO stores due to the closure of unprofitable LO stores.

請參閱幻燈片19，第二季度，我們繼續刷新我們的餐廳業務並開設更多特許經營店和管理店。總收入為人民幣3,530萬元，年減37.8%；總成本和費用較去年同期下降44%至人民幣3,430萬元。主要是由於ADS下降以及由於關閉不盈利的LO商店而導致LO商店數量減少。

And on slide 20, these measures lead to improved profitability. Income from operations was RMB2.9 million. Adjusted EBITDA was RMB1.2 million. Net profit and core net income turned from loss to profit.

在投影片 20 中，這些措施提高了獲利能力。營業收入為人民幣290萬元。調整後EBITDA為人民幣120萬元。淨利和核心淨利扭虧為盈。

Next, Selina will review the profitability of our group.

接下來，Selina將回顧我們集團的獲利能力。

Thank you. Please turn to slide 21. Group net income per ADS, that's basic and diluted, decreased by 39.9% to RMB0.61 and core net income per ADS, that's basic and diluted non-GAAP, increased by 3% to RMB0.69.

謝謝。請翻至投影片 21。集團每美國存託憑證淨利潤（基本和稀釋）下降 39.9% 至人民幣 0.61 元，每美國存託憑證核心淨利潤（基本和稀釋非公認會計準則）增長 3% 至人民幣 0.69。

Let's now take a look at slide 22. As of June 30, 2024, the company had total cash and cash equivalents, restricted cash, short-term investments, investments in equity securities, and time deposits of RMB1,737.2 million, compared to RMB1,517.1 million as of March 31, 2024. The increase was mainly attributable to continued operating cash inflow, the disposal of the property, and the repayment of loans from franchisees.

現在讓我們來看看投影片 22。截至2024年6月30日，本公司的現金及現金等價物、受限現金、短期投資、股本證券投資及定期存款總額為人民幣1,737.2百萬元，而截至2024年3月31日為人民幣1,517.1百萬元。增加的主要原因是持續經營現金流入、出售物業以及償還加盟商貸款。

On slide 23, considering our performance during the first half of this year and the impact of closing certain LO hotels due to lease expirations and strategic decisions, we have revised our revenue guidance for the hotel business. Now we anticipate its performance in 2024 to remain flat compared to the last year.

在投影片 23 上，考慮到我們今年上半年的業績以及因租約到期和策略決策而關閉某些 LO 飯店的影響，我們修改了飯店業務的收入指引。現在我們預計其 2024 年的表現將與去年持平。

As Board of Directors has approved the payment of cash dividends of USD0.10 per ordinary share or USD0.10 per American deposit share, that's ADS, payable to holders of the company's ordinary shares shown on the company's record at the closing of trading on September 30, 2024.

由於董事會已批准向 9 月收盤時公司記錄中顯示的公司普通股股東支付每股普通股 0.10 美元或每股美國存款股 0.10 美元（即美國存託股）的現金股息2024 年 30 日。

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

我們準備好的演講到此結束。接線員，我們現在準備開始問答環節。

Thank you. (Operator Instructions)

謝謝。（操作員說明）

[Bruce Lee], UBS.

[李小龍]，瑞銀。

Hi, Alex, Selina, and Jason. Thanks for taking my question. So I have two questions. The first one will be regarding the hotel business. So could you please introduce a bit about the RevPAR trend in July and in August so far on a year-over-year trend basis? And also, we saw that you have changed your four-year hotel revenue guidance. So could you please also provide some color on the RevPAR outlook for the second half? And that's my first question.

嗨，亞歷克斯、塞琳娜和傑森。感謝您提出我的問題。所以我有兩個問題。第一個是關於酒店業務。您能否介紹一下迄今為止 7 月和 8 月 RevPAR 的同比趨勢？此外，我們還看到您更改了四年酒店收入指導。那麼您能否提供一些關於下半年 RevPAR 前景的資訊？這是我的第一個問題。

And the second question is regarding the shareholder return plan and we saw that we have declared a cash dividend at this time. So will it be a long-term shareholder return plan? Thank you.

第二個問題是關於股東回報計劃，我們看到我們此時已經宣布了現金股利。那麼這會是一個長期的股東回報計畫嗎？謝謝。

Thank you, Bruce. Regarding the hotel RevPAR for July and August, the Q3 imply we saw a little bit steep drop compared with the same period or same July last year around 15%. Trend in August, the first half in August our RevPAR and is catching up recovered to about less than 10% of drop compared to last year.

謝謝你，布魯斯。關於 7 月和 8 月的飯店 RevPAR，第三季意味著與去年同期或 7 月相比，我們看到了 15% 左右的急劇下降。8 月趨勢，8 月上半月我們的 RevPAR 正在追趕，恢復到與去年相比下降約 10% 左右。

Last year I think was especially in the summer the stronger than the previous years and so there is a correction from the record. I think we -- looking back, I think somewhat is more understandable. So that's the next two months.

我認為去年特別是在夏季比前幾年更強，因此記錄有所修正。我認為我們——回顧過去，我認為有些更容易理解。這就是接下來的兩個月。

For the third quarter, we anticipate we will operate probably the same levels of reduction as the second quarter comparing with the last year, 2023. For the balance of the year and our projection is our total revenue side will be flat compared with the year of 2023 for several reasons.

對於第三季度，我們預計與去年（2023 年）相比，我們的削減幅度可能與第二季度相同。對於今年剩餘時間，我們的預測是，由於多種原因，我們的總收入將與 2023 年持平。

One, we have a reduction in terms of the RevPAR. We also have an increase in terms of new openings. We still anticipate and plan about 480 new openings, even though we have a short dip in the second quarter. But we're looking at the pipeline, the third quarter, fourth quarter will catch up.

第一，我們的 RevPAR 有所下降。我們的新職缺也有所​​增加。儘管第二季業績出現短暫下滑，我們仍預計併計劃開設約 480 家新店。但我們正在關注管道，第三季、第四季將會趕上。

And that also will be offset a little bit by we have a reduction in the membership income somewhat. And also, we have about 400 hotels in the upgrade mode, because about 400 this year will be going through the remodeling slightly more than last year. Because last year was the first year we're coming out of the pandemic and we have given our franchisees some breathing room to operate the hotels to generate some cash to help their businesses.

我們的會員收入有所減少，這也將被一點點抵消。另外，我們有大約400家酒店處於升級模式，因為今年大約有400家酒店將比去年稍微多一些。因為去年是我們走出疫情的第一年，我們給了我們的加盟商一些喘息的空間來經營飯店，以賺取一些現金來幫助他們的業務。

So this year, we have planned and also encouraged a lot more hotels in going through the upgrade and the remodeling. So we have a lot the -- we typically give six months to one year of the grace period if the hotels go through that remodeling phase.

所以今年我們計劃並鼓勵更多的酒店進行升級改造。因此，如果飯店經歷改造階段，我們通常會給予六個月到一年的寬限期。

And also, in light of the challenging, at least on the service hotel and restaurant industry, we have given our franchisees a little more in terms of franchise signing application fees and various services and we have added the various services. So combined, and so we'll see revenue to remain flat compared with the 2023. So that's on the hotel business.

而且，鑑於挑戰，至少在服務酒店和餐飲業，我們在特許經營簽約申請費和各種服務方面給我們的加盟商多了一點，並且我們增加了各種服務。綜合來看，我們將看到收入與 2023 年持平。這就是酒店業務。

And on the shareholder dividend, even though the second quarter we see a drop compared with the same revenue side with the same period of last year. However, you can see we still generate a very strong cash flow.

在股東股息方面，儘管第二季度我們看到與去年同期相同的收入方面相比有所下降。然而，你可以看到我們仍然產生非常強勁的現金流。

And especially with our disposal of one property and added another RMB120 million cash into the bottom line. And therefore, we think and anticipating the other growth needed capital, we think it is appropriate for the first half of the year and we declare this dividend.

尤其是我們出售了一處房產後，又為淨利潤增加了 1.2 億元現金。因此，我們認為並預期其他成長所需的資本，我們認為這對今年上半年來說是合適的，我們宣布了這筆股息。

We had a continued dividend policy before, which was interrupted by the pandemic and our plan is to continue this dividend practice. And the borrowing from any great growth potential requires further cash infusion. We'll continue to deliver sustainable, profitable growth to the bottomline and deliver sustainable returns to our shareholders. So this is our long-term plan and we'll continue to do this. So thanks, Bruce, for those two wonderful questions.

我們之前有持續的股息政策，但由於大流行而中斷，我們的計劃是繼續這種股息做法。任何巨大的成長潛力的借貸都需要進一步的現金注入。我們將繼續實現可持續的獲利成長，並為股東帶來可持續的回報。所以這是我們的長期計劃，我們將繼續這樣做。謝謝布魯斯提出這兩個精彩的問題。

Thanks, Alex, for the answers. It's super helpful. Thank you.

謝謝亞歷克斯的回答。這非常有幫助。謝謝。

Lewen Liu, China Securities.

劉樂文，中國證券。

Okay. Thank you. Thank you for the management team. And I have two questions. The first is about the demand. I wonder if there is a difference between the business and the leisure demand. Can you draw some colors on this question? And also, the second question is about, is there any difference like for us, for the second quarter, for our hotels, like in the first and second tier city and the low-tier city? Thank you.

好的。謝謝。感謝管理團隊。我有兩個問題。首先是關於需求。我想知道商務和休閒的需求是否有區別？你能對這個問題畫一些顏色嗎？另外，第二個問題是，對我們來說，第二季度，對於我們的飯店來說，像第一線城市和低線城市有什麼不同嗎？謝謝。

Yeah. With regard to the operation issues, I'll take them, Selina, with the financial numbers. So I'll take Lewen's question. The first question regarding the pattern changes in terms of the ratio between leisure and businesses, we do observe the trend. There is more leisure travels than the business travels. And there is also higher demand in the third-tier cities that typically we have the scenery and the resort area. And that also the cities where they have a friendly climate, temperatures, attract a lot more leisure travelers in the summer, especially in the July or August.

是的。至於營運問題，Selina，我會帶著財務數字來處理。那我來回答萊文的問題。第一個問題，關於休閒與商務比例的格局變化，我們確實觀察到了這個趨勢。休閒旅遊多於商務旅遊。而且三線城市的需求也更高，通常我們有風景和度假區。而且那些氣候宜人、溫度適宜的城市在夏季，尤其是七月或八月，吸引了更多的休閒旅客。

And so, we do think that the trend will continue, considering we have a large number of retirees are going into the retirement mode in the next few years. So the leisure travel, and especially the economy and the budget leisure travel, will continue to rise and we are anticipating and planning for this. And the hotels in these areas are performing exceedingly well. And, for instance, some of our hotels in those resort and summer retreat areas and achieved even a record earnings and record occupancy.

因此，考慮到我們有大量退休人員將在未來幾年進入退休模式，我們確實認為這種趨勢將持續下去。所以休閒旅遊，特別是經濟型和經濟型休閒旅遊，將會繼續成長，我們正在對此進行預期和規劃。這些地區的飯店表現非常出色。例如，我們在這些度假勝地和避暑勝地的一些飯店甚至實現了創紀錄的收入和創紀錄的入住率。

With regard to the first, second, and third-tier cities, we did have a trend, which we can share with you. We see this year, the first-tier cities, the RevPAR drops, at least in our business, the most at 12.5% and the second tier, a drop of 11.7%. Typically, the last year, with the finish of the pandemic, I think a lot more travelers -- business travelers, generally businesses, and also government for their business seminars and business development activities are exceedingly very high and we do see some reduction in that number.

對於一二、三線城市，我們確實有一個趨勢，可以跟大家分享一下。我們看到今年一線城市的RevPAR下降了，至少在我們的業務中，降幅最大為12.5%，二線城市下降了11.7%。通常，去年，隨著大流行的結束，我認為更多的旅行者——商務旅行者，通常是企業，還有政府參加他們的商業研討會和業務發展活動，數量非常高，我們確實看到了一些減少數字。

So the third tier, the most resilient in our model had a reduction -- has a less of an impact, about 9% reduction in RevPAR. So that's the phenomenon trend that we have observed, and we do believe this trend may continue for a while. So thanks, Lewen.

因此，我們模型中最具彈性的第三層有所減少——影響較小，RevPAR 減少了約 9%。這就是我們觀察到的現象趨勢，我們確實相信這種趨勢可能會持續一段時間。謝謝，勒文。

[Kelvin Wong, Mica Capital].

[Kelvin Wong，雲母資本]。

Thank you. Good evening. Thanks for taking my questions. I would like to have three, if I may. I think that it's better for me to ask the question one-by-one, so that that will make it easier to answer that. The first one is more, we will look at it more on a broader top-down base. I would like to know, could you talk about the trend of actually the whole industry and how do you see this trend going forward?

謝謝。晚安.感謝您回答我的問題。如果可以的話，我想要三個。我認為我最好一一提出這個問題，這樣會比較容易回答。第一個是更多，我們將在更廣泛的自上而下的基礎上更多地看待它。我想知道，您能談談實際上整個行業的趨勢嗎？

And at the same time, are you facing any difficulties at the moment and what measures have you been taking to deal with these difficulties? And we would be glad if you could also give us a comparison of the company's performance in the second quarter compared with other peers. So that's my first question. I have another two after you answer this one.

同時，您目前是否遇到什麼困難，採取了哪些措施來應對這些困難？如果您能為我們提供該公司第二季業績與其他同業的比較，我們將非常高興。這是我的第一個問題。你回答完這個之後我還有另外兩個。

Okay. All right. Thanks, Kelvin. Regarding the trend in the, I'll talk about the, especially the hotel industry, and then later we can talk about the restaurant. We have not seen industry-wide statistics of the performance for the second quarter. So we cannot make a meaningful comparison to others, but I can share with you what we have observed. And we did get some feedback from the leading industry OTAs and so we have an idea.

好的。好的。謝謝，凱爾文。關於這個趨勢，我先講一下，特別是旅館業，然後我們可以講一下餐廳。我們還沒有看到全行業第二季的業績統計數據。因此，我們無法與其他人進行有意義的比較，但我可以與您分享我們所觀察到的情況。我們確實從領先的行業 OTA 那裡得到了一些反饋，所以我們有了一個想法。

So we are at least, I think, a better performing group among our peers in terms of the price, occupancy, reservation numbers compared with the same period of last year. And our company has built our strength to face the challenges, both up and down.

所以我認為，與去年同期相比，我們至少在價格、入住率、預訂數量方面是同行中表現更好的一組。我們公司已經累積了足夠的實力來應對上下的挑戰。

So when the industry is facing challenges, our main concern is the health and the profitability of our franchisees and also the stable employment environment for our people. So in order to fend off this kind of up and down volatilities, I think the key is how do we increase our core competitiveness. I think that the GreenTree in the past, especially after the pandemic, we have many aged, older properties that needed to be upgraded, okay.

因此，當產業面臨挑戰時，我們最關心的是加盟商的健康和獲利能力，以及員工穩定的就業環境。所以為了抵禦這種上下波動，我認為關鍵是我們如何提升我們的核心競爭力。我覺得以前格林豪泰，特別是疫情之後，我們有很多老舊的物業需要升級改造，好。

And we have worked with our franchisees in the last one and a half years, and we continue to increase our brand value proposition. And so, in other words, how we can help our franchisees to maintain the revenue or even increase the revenue, meanwhile, streamline the operating systems and streamline the operation to reduce the leakage, the waste and all the costs.

在過去的一年半里，我們與我們的特許經營商合作，我們不斷提高我們的品牌價值主張。那麼，換句話說，我們如何幫助我們的加盟商維持收入，甚至增加收入，同時，精簡操作系統，精簡運營，減少洩漏、浪費和一切成本。

So we have built a better supporting system, improved, especially this year to have a timely and more efficient support to our franchisees. And we also have more focused local sales, because everybody is fighting for the national sales. But I think the local sales, the local customers, I mean, this is not only for the restaurant business, for the hotel business as well and we focus on the local sales and the business development.

所以我們建立了更好的支援體系，完善了，特別是今年能夠給我們的加盟商及時、更有效率的支援。我們也有更集中的本地銷售，因為每個人都在為全國銷售而奮鬥。但我認為本地銷售、本地客戶，我的意思是，這不僅適用於餐廳業務，也適用於酒店業務，我們專注於本地銷售和業務發展。

As a result, we believe our downward trend is like-to-like, and the same, for instance, the same store or like kind of properties. We're not talking about the new -- the different composition of the properties. And then, it will be -- I think we're performing one of the better ones in the industry. We're waiting for the other groups to report the numbers. We'll make a detailed comparison.

因此，我們認為我們的下降趨勢是相似的，例如相同的商店或相似的房產。我們不是在談論新的——屬性的不同組成。然後，我認為我們正在做業內最好的事情之一。我們正在等待其他小組報告數字。我們將進行詳細的比較。

Another effort we've been focusing on is building and also continue to showcase our brand by going -- by repositioning, by improving our -- by our LO hotels. You can see from the page, I think page 7 or 8 in the hotel performance side, our LO hotels continue to lead the FM hotels in both the RevPAR and also the occupancy.

我們一直關注的另一項努力是透過重新定位、改進我們的 LO 酒店來建立並繼續展示我們的品牌。你可以從第7頁或第8頁看到，在酒店業績方面，我們的LO酒店在RevPAR和入住率方面繼續領先FM酒店。

So as a result of that, we will transfer, we'll replicate the business practice to the franchisees and leading the franchisees to face this downward pressure challenges. So Kelvin, that's our focus for the time being.

因此，我們將把這種商業做法轉移、複製給加盟商，帶領加盟商面對這種下行壓力的挑戰。凱爾文，這是我們目前的重點。

Very good.

非常好。

And we're confident that we'll continue to be the most profitable value deliverer to our franchisees, to our businesses.

我們相信，我們將繼續成為我們的特許經營商和我們的業務最有利可圖的價值提供者。

Okay. That's very helpful. I would like to have two more questions. The second one, again, a follow-up on the hotel industry. I heard that you're going to maintain the plan of opening 480 to 490 hotels throughout the year. But if we look at the second quarter, is there any special reason for the particularly low number of hotel openings during the quarter? Is it because of competition or franchisees? So -- and at the same time, apart from organic growth, are you also looking for any M&A opportunities?

好的。這非常有幫助。我還想問兩個問題。第二個同樣是旅館業的後續行動。我聽說你們要維持全年新開480到490家飯店的計畫。但如果我們看第二季度，該季度酒店開業數量特別少，是否有什麼特殊原因？是因為競爭還是加盟主？那麼，與此同時，除了有機成長之外，您是否還在尋找任何併購機會？

Okay. Thanks, Kelvin. The second quarter we did have a slower -- lower number of openings. And for, I think it just happened that some of the scheduled openings are getting delayed a little bit. I think it's partially because now I think the regulation for opening hotels is a little bit more, I would say, restrictive and all the required licenses are a little bit harder to obtain than before.

好的。謝謝，凱爾文。第二季度，我們的職缺數量確實放緩了，數量也減少了。因為，我認為一些預定的開放時間被推遲了一點。我認為部分原因是現在我認為開設酒店的規定更加嚴格，而且所有必需的許可證比以前更難獲得。

So we have a -- we looked at the pipeline. So we have a number of hotels that takes a little bit longer to obtain all the licenses, okay. And we have a plan to do a better job in terms of educating our franchisees and to give them a better support in doing so.

所以我們有一個——我們研究了管道。所以我們有很多酒店需要更長的時間才能獲得所有許可證，好吧。我們計劃在教育我們的加盟商方面做得更好，並為他們提供更好的支援。

And we have looked at the pipeline in the next quarter. I think in the third quarter we are going to open 170 plus or minuses and then the fourth quarter, we're likely the same speed. So the year -- we will end of the year with between 480 plus or minuses, or even maybe towards 500 level, okay. And so we have the hotel numbers in the pipeline. So we're pretty confident in that.

我們已經研究了下個季度的管道。我認為在第三季我們將打開 170 正負，然後第四季我們可能會保持相同的速度。所以今年——我們將在年底達到 480 正負之間，甚至可能達到 500 的水平，好吧。所以我們正在準備酒店號碼。所以我們對此非常有信心。

With regard to whether we have other competition in the marketplace, our experience, Kelvin is that, we want to maintain a quality higher growth. Instead of just for the numbers sake. And I think standardization, higher quality of the hotels and the products and services and that is more important to our franchisees, to the long term growth and profitability of the company.

關於我們在市場上是否有其他競爭，我們的經驗是，Kelvin 是，我們希望保持更高品質的成長。而不僅僅是為了數字。我認為標準化、更高品質的酒店以及產品和服務對於我們的特許經營商、公司的長期成長和盈利能力更為重要。

So we want to take a more disciplined approach, and every hotel we open, we want to be a profitable one and can be sustainable for our franchisees, and so we are not going to be just for growth -- for the sake of growth by growing the numbers. So that's our internal focus and it's absolutely strictly focused on the franchisees' profitability.

因此，我們希望採取更嚴格的方法，我們開設的每一家酒店都希望成為一家盈利的酒店，並且能夠為我們的特許經營商帶來可持續發展，因此我們不會僅僅為了增長——為了增長不斷成長的數字。這就是我們的內部重點，並且絕對嚴格關注特許經營商的獲利能力。

So and that is our focus. And so even though there may be some competitions, but our core customer space are there and so we're helping them to evaluate the site and do a better design and build the products at the most efficient ways.

這就是我們的重點。因此，儘管可能存在一些競爭，但我們的核心客戶空間就在那裡，因此我們正在幫助他們評估網站，並以最有效的方式進行更好的設計和建立產品。

And anticipating the future consumer's behavior and the requirement and that's what we're doing. And then with that, we think we can earn the confidence and the respect from our customers. That we still are proud of our loyalty of our GreenTree franchisees and that feeling is mutual, okay.

預測未來消費者的行為和需求，這就是我們正在做的事情。這樣，我們認為我們就能贏得客戶的信任和尊重。我們仍然為格林豪泰加盟商的忠誠度感到自豪，而且這種感覺是相互的，好吧。

With regard to M&A, we have not done an aggressive searching in the M&A opportunities. Partially because we had two, which was not so successful. And part of the reason is also because of the pandemic and also the performance guarantee. So it didn't lead to a good result.

關於併購，我們還沒有積極尋找併購機會。部分原因是我們有兩個，但不太成功。其中一部分原因也是因為疫情，還有履約保障。所以並沒有帶來好的結果。

And so we are going to be more focused on if we do an M&A and we have to find the group with the same culture, with the same focus on the profitability of the franchisees and the team growth and efficient system and operations. And most importantly, their value proposition has to be, and the brand proposition has to be complementary to GreenTree.

因此，如果我們進行併購，我們將更加關注，我們必須找到具有相同文化的集團，同樣關注特許經營商的盈利能力、團隊成長以及高效的系統和運營。最重要的是，他們的價值主張必須是，而且品牌主張必須與格林豪泰互補。

And at this moment, I think it's a little bit harder to find. We do not want to dilute our efforts and focus now and to reposition some of our older properties and also build new ones. And in a very short period of time, I think we'll be the leading, we hope we'll become the most valued brand by our customers in the industry, okay.

而現在，我覺得找起來有點困難。我們不想現在就削弱我們的努力和重點，重新定位我們的一些舊房產並建造新房產。在很短的時間內，我認為我們將成為領先者，我們希望我們將成為行業內客戶最重視的品牌，好吧。

Great. Great. The stance is very clear. And one final small question about your restaurant business. So actually it's great to see that it has turned profitable in Q1 and now better in the second quarter. So I'd like to know about the company's plan for this business in the future, especially in terms of like, store openings like FM store openings, LO stores. What's your plan on that? Any potential difficulties you may face? And actually, is there any plan for you to lease or separately lease this restaurant business because it's doing so good?

偉大的。偉大的。立場非常明確。最後一個小問題是關於您的餐廳業務的。因此，實際上很高興看到它在第一季實現盈利，現在第二季度情況更好。所以我想了解公司未來對於這個業務的規劃，特別是開FM店、LO店之類的開店方面。你對此有何計劃？您可能面臨任何潛在的困難嗎？實際上，您是否有計劃租賃或單獨租賃這家餐廳業務，因為它做得很好？

Okay. Thanks, Kelvin. Appreciate it for your praise and it is a tougher business, and we have spent some time in repositioning our business. We have two of the famous but legendary, also a legacy brand. Both of them are over 20 years old. And I -- I think in our economy, if you can survive and still grow and still be a little bit more profitable after 20 years, it's almost a miracle to our team.

好的。謝謝，凱爾文。感謝您的讚揚，這是一項更艱難的業務，我們花了一些時間重新定位我們的業務。我們有兩個著名但傳奇的品牌，也是一個傳統品牌。兩人都已經20多歲了。我認為，在我們的經濟中，如果 20 年後你能夠生存並且仍然成長，並且仍然能獲得更多的利潤，這對我們的團隊來說幾乎是一個奇蹟。

And the -- one of the reasons we're able to turn the business around, I think, is really to understand the consumer demand, the traffic pattern and also the products mix and the team efficiency. I think those are a few factors we've been focusing on. And we're especially focusing on the value creation for the restaurant business.

我認為，我們能夠扭轉業務的原因之一是真正了解消費者需求、流量模式以及產品組合和團隊效率。我認為這些是我們一直在關注的幾個因素。我們特別關注餐廳業務的價值創造。

So which part of the area that we can create the most value to make both Da Niang Dumplings and also Lu Gang Café relevant to our consumers. So we did quite a bit of reposition. I think our team has made a great effort. And we have also been receiving many inquiries to see whether we want to buy or invest in other restaurant brands.

那麼我們可以在哪個區域創造最大的價值，讓大娘餃子和鹿港咖啡與我們的消費者相關。所以我們做了相當多的重新定位。我認為我們的團隊付出了很大的努力。我們也收到了許多詢問，詢問我們是否想要購買或投資其他餐廳品牌。

At this moment, I think with our transition is still not completely solidified. So we'll take some time to figure out what is the best format, what is the best product mix and value propositions for our customers and for our franchisees. And then we can speed up the restaurant development.

此時此刻，我認為我們的轉型還沒有完全固化。因此，我們將花一些時間來弄清楚什麼是最好的格式，什麼是最好的產品組合以及對我們的客戶和特許經營商的價值主張。然後我們就可以加快餐廳的發展。

The worst-case scenario is that we spend a bunch of or spend the franchisees a bunch of CapEx and end up selling RMB1 million, loss RMB500,000 and that's the area we do not want to get into that. So this year, we still want to be conservative.

最糟糕的情況是，我們花費了大量的資本支出，或者花費了加盟商大量的資本支出，最終出售了 100 萬元人民幣，損失了 50 萬元人民幣，這是我們不想涉及的領域。所以今年我們還是要保守一點。

We planned for about 60 in the beginning of the year, 60 new stores, new restaurants and we're still trying to target open that. It's more in the community, street stores with the right format. And our ADS reduction partially was also due to we shrink, we reduced the footprint, the square footage of those restaurants.

我們計劃在今年年初開設約 60 家、60 家新商店、新餐廳，我們仍在努力以開業為目標。更多的是在社區、街頭商店以正確的形式進行。我們的ADS減少部分也是由於我們的規模縮小，我們減少了這些餐廳的佔地面積和麵積。

And in the long run, we hope that we can grow that into a separate group, separate business, either with a separate M&A with other groups, they can buy us out or we can have our team to lead a separate spend to be a separate independent business such as IPO.

從長遠來看，我們希望我們能夠將其發展成為一個獨立的集團，獨立的業務，或者與其他集團進行單獨的併購，他們可以買下我們的股份，或者我們可以讓我們的團隊領導一個單獨的支出，成為一個獨立的公司獨立業務，如IPO。

And at this moment, we are still not -- we still do not think that we are capable, we are able to do any kind of M&A in the Restaurant business to actually to export our business models to other businesses. It's still a tough industry, service industry, even though it's growing, but it's a tough competition and we have to be really careful in making those kinds of decisions.

目前，我們仍然沒有——我們仍然認為我們沒有能力，我們能夠在餐廳業務中進行任何類型的併購，以實際將我們的業務模式匯出到其他業務。這仍然是一個艱難的行業，服務業，儘管它正在成長，但這是一個激烈的競爭，我們在做出這種決定時必須非常小心。

So those are the areas we welcome any recommendations and we respect the great operators in the industry. So we wouldn't mind doing multiple different kinds of joint ventures and cooperation with other leading restaurant chains and with the leading restaurant group in order to enhance -- further enhance our competitiveness in the restaurant side.

因此，我們歡迎在這些領域提出任何建議，並且我們尊重業內優秀的運營商。因此，我們不介意與其他領先的連鎖餐廳和領先的餐飲集團進行多種不同類型的合資和合作，以增強——進一步增強我們在餐廳方面的競爭力。

Okay. Great. Great. Very helpful. Thanks. Thanks for answering my questions.

好的。偉大的。偉大的。非常有幫助。謝謝。感謝您回答我的問題。

(Operator Instructions)

（操作員說明）

[Zhong Xu, ABC Capital].

[仲旭，ABC資本]。

Hello. Thank you for answering my question. And I have one question about the capital market. Can you comment on how to improve liquidity in the capital market? Previously, the company considered several paths. Is there any progress or timeline now? Thank you.

你好。感謝您回答我的問題。我有一個關於資本市場的問題。能否談談如何提高資本市場的流動性？此前，該公司考慮過多種路徑。現在有什麼進展或時間表嗎？謝謝。

No, no, no, I understand. Zhong that I didn't -- can you rephrase the second? I know the first question is increase the -- how do we plan to increase the liquidity.

不不不，我明白了。鍾先生，我沒有──你能改一下第二個嗎？我知道第一個問題是增加——我們計劃如何增加流動性。

(multiple speakers) What is the second?

（多名發言者）第二個是什麼？

Yes. Because our company considered several paths to improve the liquidity. Is there any progress on the timeline now?

是的。因為我們公司考慮了幾種提高流動性的途徑。現在時間軸有進展嗎？

Timeline for?

時間表為？

Improve the liquidity in the capital market.

改善資本市場流動性。

I see. Okay. Okay. Got it, Zhong. Appreciate it. Yes. Our shares are pretty concentrated by some of the largest institution investors and our corporate company owns about 90%, which is -- we are in the process of doing a reverse merger and then to -- we are also after that we plan to in the phase stage and we discuss whether we can systematically do an offering to the outside investors to increase the liquidity stage-by-stage and that detail the timeline and depends on the restructuring, which we hope will be completed any time soon in the next quarter or so. So that's the market liquidity, which is a major concern for ourselves as well.

我懂了。好的。好的。明白了，鐘。欣賞它。是的。我們的股份相當集中於一些最大的機構投資者，而我們的公司公司擁有大約 90% 的股份，也就是說——我們正在進行反向併購，然後——我們也計劃在之後我們討論是否可以系統地向外部投資者發行股票，以逐步增加流動性，並詳細說明時間表並取決於重組，我們希望重組能夠在下個季度或很快完成所以。這就是市場流動性，這也是我們自己主要關心的問題。

So we're taking the active -- we are taking the concrete plan to do that. Meanwhile, we'll continue to focus on, again, our core competition, strength building. And I think as long as we continue to deliver the profitable sustainable growth and continue to grow the product and services in the high quality standardized, then I think that the long-term value is there for all of our shareholders.

因此，我們正在採取積極行動——我們正在製定具體計劃來做到這一點。同時，我們將繼續專注於我們的核心競爭力，即實力建設。我認為，只要我們繼續實現盈利的可持續增長，並繼續以高品質標準化的方式發展產品和服務，那麼我認為我們所有股東都可以獲得長期價值。

Okay. Got it. Thank you.

好的。知道了。謝謝。

Thank you. And this concludes our question-and-answer session. I'd like to turn the conference back over to Selina Yang for any closing remarks.

謝謝。我們的問答環節到此結束。我想將會議轉回給楊塞琳娜 (Selina Yang) 致閉幕詞。

Thank you, Operator. In closing, on behalf of the entire GreenTree management team, we thank you for your interest in GreenTree and your participation in today's call. If you require any further information or have plans to reach us, please feel free to contact us. Thank you all.

謝謝你，接線生。最後，我們代表整個格林豪泰管理團隊，感謝您對格林豪泰的關注以及參加今天的電話會議。如果您需要任何進一步的資訊或計劃聯絡我們，請隨時與我們聯繫。謝謝大家。

Thank you.

謝謝。

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

謝謝。今天的電話會議到此結束。我們感謝大家參加今天的演講。您現在可以斷開線路並度過美好的一天。