GreenTree(GHG)2024-08-15 17:19Financial Data and Key Metrics Changes - In Q2 2024, total revenues decreased by 20.5% year-over-year to RMB329.7 million, with hotel revenues down 14.8% to RMB264.6 million and restaurant revenues down 37.8% to RMB35.3 million [10][14][17] - Net income was RMB62.3 million, down 38.9% year-over-year, with a margin of 18.9% [10] - Adjusted EBITDA decreased by 34.5% to RMB83.1 million, with a margin of 25.2% [10] Business Line Data and Key Metrics Changes - Hotel RevPAR decreased by 10.8% year-over-year to RMB125, with LO hotels experiencing a RevPAR drop of 7.3% and FM hotels a drop of 10.9% [10][11] - Restaurant average daily sales (ADS) decreased by 22.1% year-over-year to RMB4,737 [10][12] - The number of franchised and managed restaurants increased to 86.9% of total, with street stores accounting for 45.4% [13] Market Data and Key Metrics Changes - The company observed a trend of increased leisure travel compared to business travel, particularly in third-tier cities [30] - RevPAR in first-tier cities dropped by 12.5%, second-tier by 11.7%, and third-tier cities saw a lesser impact with a 9% reduction [32] Company Strategy and Development Direction - The company is focusing on upgrading hotels to respond to competition and is shifting its restaurant strategy towards franchised street stores [8][9] - Plans to open approximately 480 new hotels in 2024, despite a slower opening rate in Q2 due to regulatory challenges [24][42] - The company aims to maintain a disciplined approach to growth, prioritizing quality over quantity in hotel openings [43] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer and business caution in discretionary spending negatively impacted performance [8] - The company anticipates flat revenue performance for the hotel business in 2024 compared to 2023, citing various operational challenges [24] - Management expressed confidence in the long-term growth potential and profitability of the restaurant business, despite current challenges [48] Other Important Information - The company declared a cash dividend of US$0.10 per ordinary share, indicating a commitment to returning value to shareholders [19] - As of June 30, 2024, total cash and equivalents increased to RMB1,737.2 million from RMB1,517.1 million as of March 31, 2024 [18] Q&A Session Summary Question: Can you provide insights on RevPAR trends for July and August and the outlook for the second half? - Management indicated a steep drop in July's RevPAR of around 15%, with a recovery to less than a 10% drop in August [23] Question: Is there a difference between business and leisure demand? - Management noted a shift towards more leisure travel, especially in third-tier cities, with leisure hotels performing well [30] Question: How does the company compare to peers in the industry? - Management believes the company is performing better than peers in terms of price, occupancy, and reservation numbers [36] Question: What are the reasons for the low number of hotel openings in Q2? - Delays in scheduled openings were attributed to stricter regulations and licensing requirements [42] Question: What are the plans for the restaurant business moving forward? - The company plans to open about 60 new restaurants, focusing on community street stores, while remaining cautious about expansion [49]