H World Group Ltd (HTHT) 2022 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the H World Q4 2022 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，謝謝你的支持。歡迎來到 H World 2022 年第四季度收益電話會議。 （操作員說明）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Jason Chen, Investor Relations Director. Please go ahead.

我現在想把會議交給今天的演講者，投資者關係總監 Jason Chen。請繼續。

Thank you. Good morning, and good evening, everyone. Thanks for joining us today. Welcome to H World Group 2022 Fourth Quarter and Full Year Earnings Conference Call. Joining us today is our Chairman, Mr. Qi Ji; our CEO, Mr. Jin Hui; our CFO Ms. Jihong; our President, Ms. Liu Xinxin. Following their prepared remarks, management will be available to answer your questions.

謝謝。大家早上好，晚上好。感謝您今天加入我們。歡迎來到 H World Group 2022 年第四季度和全年收益電話會議。今天加入我們的是我們的主席齊濟先生；我們的首席執行官金輝先生；我們的首席財務官季紅女士；我們的總裁劉欣欣女士。在他們準備好的評論之後，管理層將可以回答您的問題。

Before we continue, please note that the discussion today will include forward-looking statements made under the safe harbor provision of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. H World Group does not undertake any obligations to update any forward-looking statements except as required under applicable laws.

在我們繼續之前，請注意今天的討論將包括根據 1995 年美國私人證券訴訟改革法案的安全港條款作出的前瞻性陳述。前瞻性陳述涉及固有的風險和不確定性。因此，我們的結果可能與今天表達的觀點存在重大差異。我們向美國證券交易委員會提交的公開文件中概述了一些潛在的風險和不確定性。除適用法律要求外，H World Group 不承擔更新任何前瞻性陳述的任何義務。

On the call today, we will also mention adjusted financial measures during the discussion of our performance. Reconciliation of those measures to comparable GAAP information can be found in our earnings release that was distributed yesterday.

在今天的電話會議上，我們還將在討論我們的業績時提到調整後的財務措施。這些措施與可比較的 GAAP 信息的對賬可以在我們昨天發布的收益報告中找到。

As a reminder, this conference call is being recorded. The webcast of this conference call as well as supplementary slide presentation is available at ir.hworld.com.

提醒一下，正在錄製此電話會議。此電話會議的網絡直播以及補充幻燈片演示可在 ir.hworld.com 上獲得。

With that, now I will turn the call over to our Chairman, Mr. Qi Ji. Mr. Ji, please.

有了這個，現在我將把電話轉給我們的主席齊濟先生。季先生，請。

Good morning, and good evening, everyone. Thank you for joining on our call today. 2022 has been a very challenging year for our business in China, with strict COVID policies in place for quite a long period of time across country. Our business has being thoroughly impacted as many people expected. However, we have shown strong resilience throughout this difficult time and continue to expand new hotel network.

大家早上好，晚上好。感謝您今天加入我們的電話會議。 2022 年對我們在中國的業務來說是非常具有挑戰性的一年，在相當長的一段時間內，全國都實施了嚴格的 COVID 政策。正如許多人所預料的那樣，我們的業務受到了徹底的影響。然而，我們在這個困難時期表現出了強大的韌性，並繼續擴展新的酒店網絡。

I would like to use this opportunity to extend our sincere appreciation to our customers, franchisees, employees and business partners for their support to go through this tough period together.

我想藉此機會向我們的客戶、加盟商、員工和業務合作夥伴表示衷心感謝，感謝他們的支持，共同度過這個艱難時期。

No matter how difficult the business environment was, we did not stop developing our company further. Last year, we transformed our Chinese operations throughout -- through our national restructuring and established firm ground in key regional markets. With our 6 fully equipped regional companies in China, we are now well prepared for penetration in more regional markets.

無論經營環境多麼艱難，我們都沒有停止進一步發展公司的腳步。去年，我們通過全國重組和在主要區域市場建立穩固的基礎，徹底改變了我們在中國的業務。憑藉我們在中國的 6 家設備齊全的區域公司，我們現在已經做好了進軍更多區域市場的準備。

With China lifting the COVID restrictions under the few focus economic development, we are embracing a strong recovery in the hotel market. We believe we are well positioned to capture the growth opportunity.

隨著中國在少數重點經濟發展下解除 COVID 限制，我們正在迎接酒店市場的強勁復甦。我們相信我們有能力抓住增長機會。

This year, we will focus on 3 key areas. First, we will continue the high-quality changing of our hotel network. This will be largely driven by limited service hotels, especially in low-tier cities and less penetrated areas. Second, we will further develop and establish firm ground in midscale and upper middle scale through multiple brand strategy.

今年，我們將重點抓好3個重點領域。一是繼續推進酒店網絡的高質量變革。這將主要由服務有限的酒店推動，尤其是在低線城市和滲透率較低的地區。二是通過多品牌戰略，進一步發展壯大中高端市場。

Last but not least, we'll continue to strengthen our organizational and operational capabilities to achieve high operational efficiency and provide better products and services to our customers as well as franchisees.

最後但同樣重要的是，我們將繼續加強我們的組織和運營能力，以實現高運營效率，並為我們的客戶和加盟商提供更好的產品和服務。

In our international business, we are very glad to report that DH achieved improvements in many operational areas over the last year.

在我們的國際業務中，我們很高興地報告說，DH 去年在許多運營領域取得了進步。

Full year adjusted EBITDA before impairment turned positive for the first time since our acquisition. In addition, we have achieved significant breakthrough in loyalty program due to the sales channel development and the digitalization of operational process.

自收購以來，全年調整後的減值前 EBITDA 首次轉正。此外，由於銷售渠道的發展和運營流程的數字化，我們在忠誠度計劃方面取得了重大突破。

In 2023, we will focus on user margin improvement, digitalization, growth of direct sales and expanding our hotel network.

2023 年，我們將專注於提高用戶利潤率、數字化、直銷增長和擴大我們的酒店網絡。

This world is full of uncertainties as we cope with consequences of our international monetary policies and continued regional conflicts. We will further [strength] our core confidence in operations and various platforms to build up our overall resilience. We are confident that with our continued innovation in business model and the projects, we can drive us through different challenges and generate a sustainable [quality] growth for our investors as well as entire ecosystem.

當我們應對國際貨幣政策的後果和持續的地區衝突時，這個世界充滿了不確定性。我們將進一步[加強]我們對運營和各種平台的核心信心，以增強我們的整體韌性。我們有信心，憑藉我們在商業模式和項目方面的持續創新，我們可以推動我們應對不同的挑戰，並為我們的投資者以及整個生態系統帶來可持續的 [質量] 增長。

With this, I will turn the call to Jin Hui.

有了這個，我會把電話轉給金輝。

[Interpreted] Although the year of 2022 was full of challenges and difficulties, H World Group as one of the leading company in the industry, still cope the difficulties and made several business progresses during the year. Let's firstly discuss our main achievements for Legacy-Huazhu for the year.

【解讀】雖然2022年充滿了挑戰和困難，但H World集團作為行業龍頭企業，依然迎難而上，在這一年取得了多項業務進展。先說說力獅華住這一年的主要成績。

Please turn to Page 3. First of all, we kept our sustainable quality growth strategy unchanged. During the year, we opened 1,244 hotels. Also, we continued to remove inferior hotels from our network and upgrade hotel products across all brands to improve customers' experiences.

請翻到第3頁。首先，我們保持了可持續有質量的增長戰略不變。年內，我們開設了 1,244 家酒店。此外，我們繼續從我們的網絡中移除劣質酒店，併升級所有品牌的酒店產品，以改善客戶體驗。

Secondly, we completed our organizational restructuring and established 6 regional offices to build up a solid foundation for further market penetration and high-quality operations in the future.

二是完成組織架構調整，成立6個區域辦事處，為未來進一步深入市場、高質量運營打下堅實基礎。

Thirdly, we have conducted good cost control and achieved a rental reduction of around RMB 300 million in 2022 as well as a 15% head count reduction in our headquarter during the year.

第三，我們進行了良好的成本控制，並在 2022 年實現了約人民幣 3 億元的租金減少以及年內總部員工人數減少 15%。

Lastly, we waived around RMB 300 million management fee for our franchisees during the tough period last year as we always treat our franchisees as our important business partners. We are very glad to see our RevPAR in China continue to perform well after reopening.

最後，由於我們始終將加盟商視為我們重要的業務合作夥伴，因此在去年的艱難時期，我們免除了約 3 億元人民幣的加盟商管理費。我們很高興看到我們在中國的 RevPAR 在重新開業後繼續表現良好。

Please turn to Page 4. Since the official announcement of reopening in late November last year, our China RevPAR recovery was up trading month-over-month. RevPAR recovered to 74%, 87%, 91% and 96% in last year, October, November, December and January this year, respectively.

請翻到第 4 頁。自去年 11 月下旬正式宣布重新開放以來，我們的中國 RevPAR 恢復逐月上升。去年、今年 10 月、11 月、12 月和 1 月，RevPAR 分別恢復到 74%、87%、91% 和 96%。

In February 2023, RevPAR further recovered to 140% of 2019 level. The recovery rate in February was mainly impacted by the timing mismatch of Chinese New Year holiday period between 2023 and 2019. However, it also shows the impacts from product mix changes over the past years as contribution from midscale and upper midscale increased as well as our improving capabilities on ADR optimizations.

2023 年 2 月，RevPAR 進一步恢復至 2019 年水平的 140%。 2 月份的複蘇率主要受到 2023 年至 2019 年農曆新年假期時間不匹配的影響。然而，這也顯示了過去幾年產品結構變化的影響，因為中端和中高端的貢獻增加以及我們的提高 ADR 優化能力。

Please turn to Page 5. Looking ahead in 2023, sustainable quality growth would still be our core strategy for Legacy-Huazhu business. Under this strategy, we will focus on 3 key areas. Firstly, high-quality hotel network expansion through our [members] and flagship hotel strategy to achieve further in-depth penetration in China market.

請翻到第5頁。展望2023年，可持續的有質量的增長仍將是我們Legacy-Huazhu業務的核心戰略。在此戰略下，我們將重點關註三個重點領域。首先，通過我們的[會員]和旗艦酒店戰略擴展優質酒店網絡，以實現對中國市場的進一步深入滲透。

Secondly, to achieve new breakthrough development of midscale and upper midscale segment, especially for those brands that we incubated in the past few years such as Orange, Crystal Orange, Intercity and Blossom House.

其次，實現中端和中高端細分市場的新突破，尤其是我們前幾年孵化的橙子、橙晶、城際、花間等品牌。

Thirdly, we will further strengthen our organizational and digitalized operation capability. We will discuss each of these 3 focuses in details in the following. First of all, we will continue the high-quality expansion of our hotel networks, especially in lower-tier cities and less-penetrated areas.

三是進一步加強組織化、數字化運營能力。我們將在下文中詳細討論這 3 個重點。首先，我們將繼續高質量地拓展酒店網絡，尤其是在低線城市和滲透率較低的地區。

Please turn to Page 6. At the end of 2022, we have totaled 8,411 hotels in operations in China with net addition of 705 hotels during the year. Hotels in operation in lower-tier cities contributed 38% as of 2022, increased by 1 percentage points compared to last year.

請翻到第6頁。截至2022年底，我們在中國運營的酒店總數為8,411家，全年淨增705家。截至 2022 年，低線城市在營酒店貢獻了 38%，比去年增加了 1 個百分點。

We have 2,544 hotels in pipeline with lower-tier cities contributed roughly 57%, which was also increased by 1 percentage point compared to the last year. A number of cities coverage for both hotels in operations and pipeline increased to 1,126 cities compared to 1,062 cities last year. Our hotel network expansion with high-quality continued despite COVID impacts last year.

我們有 2,544 家在建酒店，其中低線城市貢獻了約 57%，與去年相比也增加了 1 個百分點。運營酒店和在建酒店的城市覆蓋範圍從去年的 1,062 個城市增加到 1,126 個城市。儘管去年受到 COVID 的影響，我們的酒店網絡仍在繼續高質量擴張。

Please turn to Page 7. In terms of new hotel signings, we signed up 2,141 new hotels in the last year. Obviously, that was lower than 2,849 hotels we signed in the year of 2021. That was because the COVID impact and the lower franchisees' confidence level. However, given that we are no longer doing the economics of the brand since last year, therefore, if we exclude the impact of the economic soft brand hotels, we actually signed up 2,123 new hotels in 2022 compared to 2,477 hotels in the last year. The gap was narrowed. Similar to the new hotel signings for the new openings, if we exclude the economic soft brand hotel, we actually opened 1,236 new hotels in the year of 2022, slightly lower than 1,293 hotels in 2021.

請翻到第7頁。在新簽約酒店方面，去年我們簽約了2,141家新酒店。顯然，這低於我們在 2021 年簽約的 2,849 家酒店。這是因為 COVID 的影響和較低的加盟商信心水平。然而，鑑於我們從去年開始不再做品牌經濟學，因此，如果我們排除經濟軟品牌酒店的影響，我們實際上在 2022 年簽約了 2,123 家新酒店，而去年為 2,477 家。差距縮小了。與新開業的酒店簽約情況類似，如果剔除經濟型軟品牌酒店，我們在2022年實際上新開了1,236家酒店，略低於2021年的1,293家。

On the hotel closure front, we totally closed around 539 hotels in 2022. In order to comply with our sustainable quality growth strategy, we continued to close more inferior economic soft brand hotels and HanTing 1.0 version product.

在酒店關閉方面，我們在2022年總共關閉了約539家酒店。為了符合我們可持續的質量增長戰略，我們繼續關閉更多劣質經濟型軟品牌酒店和漢庭1.0版本產品。

If we exclude this impact, our closure for the year of 2020 was 237 hotels compared to 175 hotels in the year of 2021. At the same time, please note that our number of hotel closure was lower than our 600 closures we previously guided in last year, as some hotel closure process were uncompleted in December last year due to the impact of initial reopening from COVID. Therefore, those hotels may affected our total number of hotel closures for this year. Along with our efforts on continuously improving our hotel quality, the proportion of low-quality hotels were declining consistently.

如果排除這一影響，我們在 2020 年關閉的酒店數量為 237 家，而 2021 年為 175 家。同時請注意，我們關閉的酒店數量低於我們之前指導的 600 家關閉酒店去年 12 月，由於 COVID 最初重新開放的影響，一些酒店關閉流程尚未完成。因此，這些酒店可能會影響我們今年關閉的酒店總數。隨著我們不斷提升酒店品質，低品質酒店佔比持續下降。

Please turn to Page 8. For example, a number of economic soft brands and HanTing 1.0 version hotels only contributed 13.4% by the end of 2022, significantly declined from 25.9% at the end of 2020. At the same time, we continuously strengthen the metrics of our members.

請翻到第8頁。例如，多個經濟軟品牌和漢庭1.0版酒店，到2022年底的貢獻率僅為13.4%，較2020年底的25.9%大幅下降。同時，我們不斷加強我們會員的指標。

Please turn to Page 9. In the economic and the midscale segment, we formed HanTing and Gee brand as our key core brands and Ni Hao and Orange are complementary brands. We will further enhance our core brand power in the future.

請翻到第9頁。在經濟型和中端市場，我們形成了漢庭和Gee品牌作為我們的主要核心品牌，你好和Orange是互補品牌。未來我們將進一步提升核心品牌力。

Please turn to Page 10. In terms of our upper midscale segment development, we remain using our marquee brand strategy to further penetrate the market. Through adjusting and resorting our brand metrics, we now have 8 brands in this segment, which include Crystal Orange, Intercity, MAXX, Manxin, CitiGO, Madison, Mercure and Novotel. At the end of 2022, we have totaled 523 hotels in operation and 287 hotels in pipeline for this segment.

請翻到第 10 頁。在我們的中高端細分市場發展方面，我們繼續使用我們的品牌戰略進一步滲透市場。通過調整和運用我們的品牌指標，我們現在在這個細分市場有8個品牌，包括水晶橙、城際、MAXX、漫心、CitiGO、麥迪遜、美居和諾富特。截至 2022 年底，我們在該領域共有 523 家運營酒店和 287 家籌建酒店。

H World is also committed to continuously upgrading and strengthening our organizational and operational system, comprehensively improving on the front of talent reserves, digitalization, franchisees and customer services, sales and loyalty programs, supply chain management and sustainable development, further improving organizational operational efficiency and creating more value to our franchisees and customers.

H World還致力於不斷升級和加強我們的組織和運營體系，在人才儲備、數字化、加盟商和客戶服務、銷售和忠誠度計劃、供應鏈管理和可持續發展等方面全面提升，進一步提高組織運營效率和為我們的加盟商和客戶創造更多價值。

Please turn to Page 11. In terms of our customer service improvement, we are seeing our customers rating on our hotels continuously improving. It demonstrated that our customers are getting more satisfied with our hotel products and services. At the same time, customers' negative rating rate is consistently declining, indicating our continuous efforts on improving customers' experiences through providing better services and products.

請翻到第 11 頁。在改善客戶服務方面，我們看到客戶對我們酒店的評價不斷提高。這表明我們的客戶對我們的酒店產品和服務越來越滿意。同時，客戶的差評率持續下降，體現了我們通過提供更好的服務和產品來提升客戶體驗的持續努力。

Please turn to Page 12. We will focus on 3 areas to reinforce our sales and marketing and loyalty programs. The first one is on the ADR optimization. After completing our organizational restructuring and establishing 6 regional offices, hotels, which located in each region can set up a more flexible pricing system based on the local market conditions. Also, the pricing synergy can be achieved among various brands in each region, and the pricing range for different segments can become more reasonable.

請翻到第 12 頁。我們將重點關注 3 個領域來加強我們的銷售和營銷以及忠誠度計劃。第一個是關於 ADR 優化。在我們完成組織架構重組並成立6個區域辦事處後，位於每個區域的酒店可以根據當地市場情況建立更加靈活的定價體系。此外，各個區域的不同品牌之間可以實現定價協同，不同細分市場的定價區間可以變得更加合理。

The second one is continuously enhancement and upgrade of H World loyalty program. By leveraging on the large number of members and traffic, we will further take the potential through consistent upgrading and improving our loyalty program, such as the membership's privilege.

二是不斷完善和升級H World忠誠度計劃。憑藉龐大的會員數量和流量，我們將通過不斷升級和完善我們的忠誠度計劃（例如會員特權）來進一步挖掘潛力。

Lastly, we will further improve our sales capabilities on corporate clients. We will continuously develop new top-tier corporate customers and generating more revenue contributed from our corporate clients through group bookings, conference, banquet and (inaudible) activities by leveraging on our digitalized direct connection capability and closer cooperation with them. The operational efficiency improvements for our leased and owned hotels is also very important for the group.

最後，我們將進一步提升對企業客戶的銷售能力。我們將繼續開發新的頂級企業客戶，並利用我們的數字化直接連接能力和與他們更緊密的合作，通過團體預訂、會議、宴會和（聽不清）活動從我們的企業客戶中獲得更多收入。我們租賃和自有酒店的運營效率提升對集團也非常重要。

Please turn to Page 13. Firstly, we will constantly optimize the current list and owned hotel portfolios. Those leased and owned hotels, which are not meeting our requirements will probably be early terminated. Secondly, we will further improve the operational efficiency of the hotel to reduce the operating cost and improve the profitability for leased and owned hotels. Lastly, any new leased and owned hotels investment in the future will be mainly determined by the return and a strategic considerations such as the flagship hotels.

請翻到第13頁。 首先，我們會不斷優化現有的名單和自有酒店組合。那些不符合我們要求的租賃和自有酒店可能會被提前終止。其次，我們將進一步提高酒店的運營效率，以降低運營成本，提高租賃和自有酒店的盈利能力。最後，未來任何新的租賃和自有酒店投資將主要取決於回報和旗艦酒店等戰略考慮。

Please turn to Page 14. We will further strengthen our supply chain capability. We will provide full supply chain services and conduct in-depth operations to franchisees as well as continuously upgrading products to achieve better quality products and more standardized services with lower cost and higher efficiency. Last but not least, we will pay more attention on ESG and long-term sustainable development.

請翻到第14頁。我們將進一步加強我們的供應鏈能力。我們將為加盟商提供全供應鏈服務和深度運營，不斷升級產品，以更低的成本和更高的效率實現更優質的產品和更規範的服務。最後但同樣重要的是，我們將更加關注ESG和長期可持續發展。

Please turn to Page 15. In addition to the continuous efforts on social welfare and employee care in the past, we will make more efforts on ESG this year with 3 key focuses. The first one is to continuously improve and optimize the company's ESG database. The second one is to improve the efficiency of energy and water usage. The third one is to launch more green projects, including green suppliers and green livings and so on. However, both our business reviews for last year and the key strategic focus is for this year.

請翻到第15頁。除了過去在社會福利和員工關懷方面的持續努力外，今年我們將在ESG方面加大力度，重點關注3個方面。一是不斷完善和優化公司ESG數據庫。第二個是提高能源和水的使用效率。三是推出更多綠色項目，包括綠色供應商、綠色生活等。然而，我們去年的業務回顧和今年的關鍵戰略重點都是如此。

With that, now I will turn the call over to our CFO, Ms. He Jihong, to discuss our DH business and our 2022 full year financial performance. Thank you.

有了這個，現在我將把電話轉給我們的首席財務官何繼紅女士，討論我們的 DH 業務和我們 2022 年全年的財務業績。謝謝。

Hello, everyone. Thank you, Jin Hui, and thank you, Jason. Please turn to Page 16. In our international front, we are very happy to report that the DH business achieved a robust recovery in 2022 and achieved RMB 134 million adjusted EBITDA before special write-off impairment and unrealized loss. While we're very lucky to be able to capture the market recovery after COVID, this result would not have been possible without a disciplined cost reduction measures and corporate restructuring efforts.

大家好。謝謝你，Jin Hui，也謝謝你，Jason。請翻到第 16 頁。在我們的國際業務方面，我們很高興地報告，DH 業務在 2022 年實現了強勁復甦，並在扣除特殊註銷減值和未實現虧損之前實現了 1.34 億元人民幣的調整後 EBITDA。雖然我們很幸運能夠在 COVID 之後抓住市場復甦的機會，但如果沒有嚴格的成本削減措施和企業重組努力，這一結果是不可能實現的。

In addition, we carried out a series of activities to bring the DH business to a new level. We rolled out our proprietary digital infrastructure in our hotels. We upgraded our loyalty program H Rewards internationally with enhanced benefits.

此外，我們還開展了一系列活動，使環衛業務再上新台階。我們在酒店推出了我們專有的數字基礎設施。我們在國際範圍內升級了我們的忠誠度計劃 H Rewards，提供更多福利。

We refreshed the brand positioning and the products for Intercity and Zleep Hotels. And then last but not least, we implemented a new management system to attract the talent for our hotels and our headquarters.

我們更新了 Intercity 和 Zleep Hotels 的品牌定位和產品。最後但同樣重要的是，我們實施了新的管理系統來為我們的酒店和總部吸引人才。

Please turn to Page 17. In 2023, DH will focus on 4 strategic areas. Most importantly, we will continue our effort to improve margin. This includes both further improvement of our revenue as well as continued cost discipline. Number two, we will continue to invest in direct sales channels. With our H Rewards program, our reservation system as well as mobile web booking platforms, we will continue to increase the ratio of direct bookings.

請翻到第 17 頁。2023 年，DH 將重點關注 4 個戰略領域。最重要的是，我們將繼續努力提高利潤率。這包括進一步提高我們的收入以及持續的成本控制。第二，我們將繼續投資直銷渠道。通過我們的 H Rewards 計劃、我們的預訂系統以及移動網絡預訂平台，我們將繼續提高直接預訂的比例。

Number three, we will continue to grow our hotel network by leveraging our strong brand. And number four, we will continue to carry out digitization of our core processes. Now I will turn to the financial section of today's call.

第三，我們將利用我們強大的品牌繼續發展我們的酒店網絡。第四，我們將繼續對我們的核心流程進行數字化。現在我將轉向今天電話會議的財務部分。

Please turn to Page 19. We all know 2022 was a very difficult year in China due to strict COVID policy. Despite the tough operating environment, we managed to grow our hotel network. The number of rooms increased 7% year-on-year to 809,478 rooms in 2022. Our hotel turnover was RMB 49.6 billion, a 9% increase compared to 2021.

請翻到第 19 頁。我們都知道，由於嚴格的 COVID 政策，2022 年在中國是非常艱難的一年。儘管經營環境艱難，我們還是設法擴大了酒店網絡。 2022年客房數量同比增長7%至809,478間。酒店營業額為人民幣496億元，較2021年增長9%。

Page 20. Due to restrictions of COVID policies, blended RevPAR for our China business in 2022 was RMB 157. This is a decrease of 8.8% compared to 2021 and a 20.5% decrease compared to 2019. This was mostly due to lower occupancy, which was 5.5% lower than 2021 and 17.7% lower compared to 2019.

第 20 頁。由於 COVID 政策的限制，2022 年我們中國業務的混合 RevPAR 為人民幣 157 元。這比 2021 年下降了 8.8%，比 2019 年下降了 20.5%。這主要是由於入住率較低，這比 2021 年下降 5.5%，比 2019 年下降 17.7%。

Page 21. In our international business, the market recovery started in Q2 2022. We achieved 96% RevPAR increase compared to 2021, which was driven by 23% of ADR increase and a 21% occupancy increase.

第 21 頁。在我們的國際業務中，市場復甦始於 2022 年第二季度。與 2021 年相比，我們實現了 96% 的 RevPAR 增長，這得益於 23% 的 ADR 增長和 21% 的入住率增長。

Please turn to Page 22. In Q4 2022, our total revenue for the group increased by 11% compared to Q3 '22, which is mainly due to 66% revenue improvement in our international business.

請翻到第 22 頁。與 2022 年第三季度相比，我們集團的總收入在 2022 年第四季度增長了 11%，這主要是由於我們的國際業務收入增長了 66%。

For the whole year 2022, our revenue increased by 8.4% year-on-year, which is contributed by 108.5% revenue increase from DH. For the whole year 2022, revenue from our China business decreased by 5.3%. However, the recovery of our China business accelerated after the Chinese government announced the reopening policy in mid-November. The overall 4Q 2022 revenue was at the high end of our guidance despite fee waiver of RMB 58 million to support our franchisees.

2022年全年，我們的收入同比增長8.4%，其中DH收入增長108.5%。 2022 年全年，我們中國業務的收入下降了 5.3%。然而，在中國政府於 11 月中旬宣布重新開放政策後，我們的中國業務復甦加速。儘管減免了 5800 萬元人民幣的費用以支持我們的加盟商，但 2022 年第四季度的整體收入處於我們指導的高端。

Please turn to Page 23. Operating costs in 4Q 2022 was RMB 3.4 billion and RMB 12 billion for the full year '22. This includes RMB 195 million impairment loss of our China business and RMB 169 million for DH business. Income from operations, therefore, was minus RMB 93 million in 4Q '22 and minus RMB 294 million for the full year '22.

請翻到第 23 頁。2022 年第四季度的運營成本為 34 億元人民幣，22 年全年的運營成本為 120 億元人民幣。這包括我們中國業務的 1.95 億元減值損失和 DH 業務的 1.69 億元人民幣。因此，22 年第四季度的運營收入為負 9300 萬元人民幣，22 年全年為負 2.94 億元人民幣。

Please turn to Page 24. Our adjusted EBITDA was RMB 398 million in 4Q '22 and RMB 610 million for the full year of 2022. Our China business reported a foreign exchange gain in 4Q '22, but this was offset by impairment loss.

請翻到第 24 頁。我們調整後的 EBITDA 在 22 年第四季度為 3.98 億元人民幣，2022 年全年為 6.1 億元人民幣。我們的中國業務在 22 年第四季度報告了外匯收益，但這被減值損失所抵消。

For DH business, adjusted EBITDA in 4Q '22 decreased RMB 68 million compared to 2021 because of the absence of COVID-related government subsidies, which was received in 2022. For the whole group, adjusted net income was minus RMB 255 million for 4Q 2022 and minus RMB 1.27 billion for the full year 2022.

對於 DH 業務，由於沒有 2022 年收到的與 COVID 相關的政府補貼，2022 年第 4 季度調整後的 EBITDA 比 2021 年減少了 6800 萬元人民幣。對於整個集團，2022 年第 4 季度調整後的淨收入為負 2.55 億元人民幣2022 年全年減去 12.7 億元人民幣。

Please turn to Page 25. As we had a quite substantial amount of noncash impairment, unrealized loss due to change in fair value of equity securities as well as unrealized foreign exchange losses, we would like to show the normalized EBITDA and the net income here separately.

請翻到第 25 頁。由於我們有相當大量的非現金減值、因股權證券公允價值變動而導致的未實現損失以及未實現的外匯損失，我們想在這里分別顯示正常化的 EBITDA 和淨收入.

As you can see, the adjusted EBITDA before impairment and ForEx exchange was RMB 1.7 billion for the full year 2022. We achieved this level of normalized adjusted EBITDA due to disciplined cost control measures such as rental reduction and streamlining of our headquarter costs.

如您所見，2022 年全年減值和外匯兌換前的調整後 EBITDA 為人民幣 17 億元。由於採取了嚴格的成本控制措施，例如減少租金和精簡總部成本，我們實現了這一水平的正常化調整後 EBITDA。

Please turn to Page 26. We would like to update everyone on the liquidity position as well. As of December 31, 2022, our net debt was RMB 4.8 billion and our cash balance is RMB 5.1 billion. We have unutilized the bank facility of RMB 2.1 billion. We would like to mention here that our cash position was further improved as of today since we did a very successful follow-on public offering of USD 300 million in January 2023, and we liquidated our core shares at EUR 300 million in February 2023.

請翻到第 26 頁。我們也想向大家更新流動性狀況。截至2022年12月31日，我們的淨債務為人民幣48億元，現金餘額為人民幣51億元。我們尚未動用人民幣21億元的銀行授信額度。我們想在這裡提一下，自從我們在 2023 年 1 月非常成功地進行了 3 億美元的後續公開發行，並在 2023 年 2 月以 3 億歐元清算了我們的核心股份後，截至今天，我們的現金狀況得到了進一步改善。

Please turn to Page 27. As each year, we give a broad guidance for our business in the coming year. Since China is just starting the recovery trajectory and we need to further observe the business trend, we remain optimistic but stay cautious. We estimate our net revenue in Q1 2023 to grow at about 61% to 65% compared to Q1 2022. Excluding DH business, our China business is estimated to grow at 53% to 57%.

請翻到第 27 頁。與往年一樣，我們會為來年的業務提供廣泛的指導。由於中國剛剛開始復蘇軌道，我們需要進一步觀察商業趨勢，我們保持樂觀但保持謹慎。我們估計我們 2023 年第一季度的淨收入將比 2022 年第一季度增長約 61% 至 65%。不包括 DH 業務，我們的中國業務預計增長 53% 至 57%。

For the year, revenue is estimated to grow at 42% to 46% and the China business is estimated to grow at 46% to 50%.

今年，收入預計增長 42% 至 46%，中國業務預計增長 46% 至 50%。

Gross hotel opening target is estimated at 1,400 and we plan to close about 600 to 650 hotels. Among the hotels to be closed in 2023, there are substantial numbers of them already not revenue generating but are still going through legal closure procedures due to delay because of the COVID. Many of these hotels are soft brand hotels and HanTing 1.0. We will have some of these hotels to be officially taken out of our inventory this year.

總酒店開業目標估計為 1,400 家，我們計劃關閉約 600 至 650 家酒店。在 2023 年將關閉的酒店中，有相當多的酒店已經沒有產生收入，但由於 COVID 的延遲仍在履行合法的關閉程序。這些酒店很多都是軟品牌酒店和漢庭1.0。我們將在今年正式將其中一些酒店從庫存中剔除。

This concludes our presentation today. Now we can start with Q&A session.

我們今天的演講到此結束。現在我們可以開始問答環節了。

(Operator Instructions) First question comes from the line of Ronald Leung of Bank of America.

（操作員說明）第一個問題來自美國銀行的Ronald Leung。

(foreign language) I have 2 questions. The first question is about the revenue guidance. So based on the first quarter revenue guidance for domestic China, growing 53% to 57% and the full year revenue growing 46% to 50%, what would be the RevPAR recovery assumptions that the management is putting in right now?

（外語）我有兩個問題。第一個問題是關於收入指導。因此，根據第一季度中國國內收入增長 53% 至 57% 以及全年收入增長 46% 至 50%，管理層現在提出的 RevPAR 恢復假設是什麼？

The second question is about the global expansion strategy. So what would be the next step for the global expansion strategy in this year and next year? Would management still consider further mergers or acquisitions to complement the brand portfolio?

第二個問題是關於全球擴張戰略。那麼今年和明年的全球擴張戰略下一步會是什麼？管理層是否仍會考慮進一步合併或收購以補充品牌組合？

[Interpreted] Okay. To answer your first question. So basically, we are seeing the demand was getting quite strong in the beginning of this year, and we are seeing the RevPAR recovery was mainly driven by the ADR. However, we are still seeing the business traveling -- I mean, especially the business traveling still has some gap compared to the normal year. That's why the OCC was having some gap as well. So by considering all the factors in terms of the revenue guidance, so by considering all the factors, which we mentioned before. So the revenue guidance actually implies the RevPAR recovery compared to the same period of 2019 was around 110%.

[解釋] 好的。回答你的第一個問題。所以基本上，我們看到今年年初需求變得相當強勁，我們看到 RevPAR 的複蘇主要是由 ADR 推動的。然而，我們仍然看到商務旅行——我的意思是，尤其是商務旅行與正常年份相比仍有一些差距。這就是為什麼 OCC 也有一些差距。因此，通過考慮收入指導方面的所有因素，通過考慮我們之前提到的所有因素。因此，收入指引實際上意味著 RevPAR 與 2019 年同期相比恢復了 110% 左右。

Okay. So I will give you a little bit of introduction in terms of our strategy focus for the 2023. So basically, as you can see, after the reopening in the first quarter, we are seeing quite strong demand in the China market, especially during the Chinese New Year. So we are still being very confident in terms of the demand in China and the growth potential in the future. So definitely, so our key focus will be in China market we are going to further penetrate into the China market by leveraging our key brands and also further strengthening our midscale and upper midscale segment penetration as well.

好的。因此，我將就我們 2023 年的戰略重點向您做一些介紹。基本上，如您所見，在第一季度重新開放後，我們看到中國市場的需求相當強勁，尤其是在中國新年。所以我們對中國的需求和未來的增長潛力還是非常有信心的。毫無疑問，我們的重點將放在中國市場，我們將利用我們的主要品牌進一步滲透到中國市場，並進一步加強我們的中檔和中高檔細分市場滲透。

So in terms of the global expansion, so first, the priority is definitely to further improve the DH operations by improving the profitability as well as the customers' experiences. But at same time, we will be looking for some of the opportunity and the potential in the global market if there are something suitable.

因此，就全球擴張而言，首先，首要任務肯定是通過提高盈利能力和客戶體驗來進一步改善 DH 運營。但與此同時，如果有合適的東西，我們將在全球市場尋找一些機會和潛力。

I can add a little bit of flavor to the -- our international business. Since the acquisition of DH, this business -- DH business has been our base for our international expansion. After the COVID difficult time, and we have seen really good turnaround of the business. So starting in 2023, we will continue to use DH as a base for our international expansion.

我可以為我們的國際業務增添一點風味。自收購 DH 以來，這項業務——DH 業務一直是我們國際擴張的基礎。在 COVID 困難時期之後，我們看到了業務的真正好轉。所以從 2023 年開始，我們將繼續使用 DH 作為我們國際擴張的基地。

So the basic, what Mr. Jin Hui mentioned was really to improve the operations of DH but also further expand the DH brands in different markets. For example, we have a good inroad in the Middle East as well.

所以最基本的，金輝先生提到的是真正改善DH的運營，同時進一步擴大DH在不同市場的品牌。例如，我們在中東也有很好的進展。

For the international expansion in other areas, we remain opportunistic for the further M&A opportunities, but I would say, DH is our first and most priority at this moment.

對於其他領域的國際擴張，我們仍然對進一步的併購機會持機會主義態度，但我想說，DH 是我們目前的首要任務。

Our next question comes from the line of Simon Cheung of Goldman Sachs.

我們的下一個問題來自高盛的 Simon Cheung。

(foreign language) So I will ask a follow-up with English in the questions. I think Ronald earlier asked also about the 2023 revenue guidance and the implied RevPAR for the full year. Would like to see whether you can provide us the RevPAR guidance for the full year. And also that going forward in the longer run, what is your expectation of RevPAR growth in the next perhaps 2, 3 years given all this investor concern of -- about the oversupply situation in China? That's the first question.

（外語）所以我會在問題中用英語問後續問題。我想羅納德早些時候還詢問了 2023 年的收入指導和全年隱含的 RevPAR。想看看您是否可以為我們提供全年的 RevPAR 指南。而且從長遠來看，考慮到所有這些投資者對中國供過於求情況的擔憂，您對未來 2、3 年 RevPAR 增長的預期是什麼？這是第一個問題。

And then the second question is, I noticed that you have gave out acceleration, guidance of accelerations in the hotel adds from 1,200 to 1,400. I'm wondering whether you have seen a bit more appetite by the investors -- hotel investor to come back into the market and also whether you have any update on the Southern China regional office strategy.

然後第二個問題，我注意到你給了加速，酒店加速的指導從1200增加到1400。我想知道您是否看到投資者的興趣有所增加——酒店投資者重返市場，以及您是否有關於華南地區辦事處戰略的最新消息。

[Interpreted] To answer your first question, as I mentioned earlier, so basically, we are seeing a quite strong domestic demand starting from the year, beginning of the year post the government's announced the reopening policy. So it was mainly the RevPAR recovery was mainly driven by the ADR growth. And especially from the leisure market, we are seeing a pretty good recovery from the leisure market.

[解讀]回答你的第一個問題，正如我之前提到的，基本上，我們看到從今年開始，在政府宣布重新開放政策後的年初，國內需求相當強勁。所以這主要是 RevPAR 的恢復主要是由 ADR 增長驅動的。尤其是休閒市場，我們看到休閒市場的複蘇相當不錯。

So in terms of the RevPAR, I mean, in terms of the blended RevPAR recovery compared to the same period of 2019, the current full year revenue guidance implies the blended RevPAR will recover to 110% to 115% compared to the same period of 2019.

因此，就 RevPAR 而言，我的意思是，就與 2019 年同期相比的混合 RevPAR 恢復而言，當前的全年收入指導意味著與 2019 年同期相比，混合 RevPAR 將恢復到 110% 至 115% .

To answer your second question in terms of the business growth. So yes, I think in the first quarter, we are seeing a good business recovery, and we are seeing the franchisees confidence is coming back a bit, and we are also seeing the investment appetite is improving as well, especially post the Chinese New Year. So from the number front, we are seeing good trends in terms of the new signings and pipeline increase, which is slightly better than our previous expectations.

在業務增長方面回答你的第二個問題。所以是的，我認為在第一季度，我們看到了良好的業務復甦，我們看到加盟商的信心有所恢復，我們也看到投資意願也在改善，尤其是在農曆新年之後.因此，從數量上看，我們看到新簽約和管道增加方面的良好趨勢，略好於我們之前的預期。

And in terms of the less-penetrated market development, not only the southern part of China, like, for example, the central area and the western area, were also previously quite weak places for H World. So after we completed our organizational restructuring and regional offices establishment, we are seeing a pretty good progress as development in that -- those particular regions, and we are still -- remain very confident in terms of the growth potentials over there, mainly leveraging our flagship stores strategy as well as our main brands development.

而在滲透率較低的市場開發方面，不僅是華南地區，比如中部地區和西部地區，也是H World此前比較薄弱的地區。因此，在我們完成組織重組和區域辦事處設立後，我們看到了相當不錯的發展進展——那些特定地區，我們仍然對那裡的增長潛力充滿信心，主要是利用我們的優勢旗艦店戰略以及我們的主要品牌發展。

Our next question comes from the line of Sijie Lin of CICC.

我們的下一個問題來自中金公司的林思傑。

(foreign language) So I have just one question about Ni Hao Hotel. Considering its positioning economy hotels, is it quite similar with Orange Hotel positioning in midscale hotels? And what is Ni Hao Hotels opening target in the future? And also, what's the difference in the room numbers and RevPAR compared with HanTing.

(外語) 所以我只有一個關於你好酒店的問題。從定位經濟型酒店來看，是不是和桔子酒店定位中檔酒店很像？而你好酒店未來的開業目標是什麼？還有，和漢庭相比，房間數和RevPAR有什麼不同。

[Interpreted] So to answer your questions, so actually, along with our strategy, with lower-tier cities penetration and further penetrating into the entire China market, we realize that that's actually, especially in the lower-tier cities, we are seeing quite a lot of new demands like a lot of young generations, a lot of local leisure travel in demand. And those customers are actually not, probably not the HanTing brand's key customers or target customers. So as you know, HanTing was positioned as a very unique business, traveling products. And to fulfill those kind of new demand in the lower-tier cities, we incubated our Ni Hao brand starting from 2020. And what we are targeting is to further penetrating the very mass market in China. And especially in the economic segment, we would like to use to HanTing and Ni Hao as our 2 key brands to further penetrate the market and provide more choices to the customers for the entire mass market in China. Thank you.

[解讀]所以回答你的問題，所以實際上，隨著我們的戰略，隨著低線城市的滲透和進一步滲透到整個中國市場，我們意識到實際上，尤其是在低線城市，我們看到了相當多的很多新的需求，比如很多年輕一代，很多本地休閒旅遊的需求。而那些客戶其實不是，很可能不是漢庭品牌的重點客戶或者目標客戶。大家知道，漢庭的定位是非常獨特的商務、旅遊產品。為了滿足低線城市的這些新需求，我們從 2020 年開始孵化了你好品牌。我們的目標是進一步滲透中國的大眾市場。尤其是在經濟領域，我們希望以漢庭和你好作為我們的兩個主要品牌進一步滲透市場，為中國整個大眾市場的客戶提供更多選擇。謝謝。

At this time, I would now like to turn it back to Jason Chen for closing remarks.

現在，我想把它轉回給 Jason Chen 作結束語。

Thank you, everyone, for taking your time with us today, and we look forward to see you in the upcoming quarter. Thank you. Bye-bye.

感謝大家今天抽出寶貴時間與我們一起，我們期待在下一個季度見到您。謝謝。再見。

That concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[此記錄中標記為 [已翻譯] 的部分由現場通話中的口譯員說出。]