12.05.2022, 08:03

GreenTree Hospitality Group Ltd. Reports Fourth Quarter and Fiscal Year 2021 Financial Results

  • Total revenues increased by 6.1% year over year to RMB307.4 million (US48.2 million)[1] for the fourth quarter 2021.
  • Income from operations decreased by 69.5% year over year to RMB36.1 million (US$5.7 million) [1] for the fourth quarter 2021.
  • Adjusted EBITDA (non-GAAP) [2] decreased by 47.4% year over year to RMB68.8 million (US10.8 million) for the fourth quarter 2021.
  • Core net income (non-GAAP) [3] decreased by 67.2% year over year to RMB35.8 million (US$5.6 million) [1] for the fourth quarter 2021. 
  • GreenTree's board of directors has approved a share repurchase program of up to US$20 million over the next 12 months.

SHANGHAI, May 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 fourth quarter and fiscal year of 2021.

Fourth Quarter of 2021 Operational Highlights

  • A total of 4,659 hotels with 337,153 hotel rooms were in operation as of December31, 2021, compared to 4,626 hotels and 334,162 hotel rooms as of September 30, 2021.
  • As of December 31, 2021, the Company had 66 leased-and-operated ("L&O") hotels and 4,593 franchised-and-managed ("F&M") hotels in operation in 367 cities across China, compared to 40 L&O hotels and 4,300 F&M hotels in operation in 345 cities as of December 31, 2020. Geographic coverage increased by 6.4% year-over-year.
  • During the quarter, the Company opened 138 hotels, a decrease of 65 compared to 203 hotels opened in the fourth quarter of 2020. Of the hotels opened in the fourth quarter of 2021, three were in the luxury segment, 44 were in the mid-to-up-scale segment, 59 were in the mid-scale segment, and 32 were in the economy segment. Geographically speaking, 15 hotels were in Tier 1 cities [3], 34 were in Tier 2 cities and the remaining 89 were in Tier 3 and lower cities in China as of December 31, 2021.
  • As of December 31, 2021, the Company had a pipeline of 1,225 hotels contracted for or under development, of which 57 hotels were in the luxury hotel segment, 347 were in the mid-to-up-scale segment, 478 were in the mid-scale segment, and 343 were in the economy segment.
  • The average daily room rate, or ADR, for all hotels in operation was RMB170, a 4.6% increase from RMB162 in the fourth quarter of 2020, and a 0.8% increase from RMB168 in the fourth quarter of 2019, before the COVID-19 outbreak.
  • The occupancy rate, or OCC, for all hotels in operation was 69.2%, a decrease of 7.5% compared with 76.7% in the fourth quarter of 2020, and a 7.2% decrease compared with 76.4% in the fourth quarter of 2019, before the COVID-19 outbreak.
  • The revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR by its occupancy rate, was RMB117, a 5.6% year-over-year decrease, and a 8.7% decrease compared with RMB129 in the fourth quarter of 2019, before the COVID-19 outbreak.
  • As of December 31, 2021 the Company's loyalty program had over 69 million individual members and approximately 1,850,000 corporate members, compared to over 66 million individual members and approximately 1,810,000 corporate members, respectively, as of September 30, 2021. The Company sold approximately 91.0% of room nights directly during the fourth quarter of 2021.

2021 Full Year Operational Highlights

  • For the full year 2021, the Company opened 722 hotels, an increase of 34.2% comparing to 538 newly-opened hotels in the full year 2020. Of the hotels opened in 2021, 10 were in the luxury hotel segment, 189 were in the mid-to-up-scale segment, 415 were in the mid-scale segment, and 108 were in the economy segment. Geographically speaking, 46 hotels were in Tier 1 cities, 200 were in Tier 2 cities and the remaining 476 were in Tier 3 and other cities in China as of December 31, 2021. During 2021, the Company closed 403 hotels, and added a net of 319 hotels to its portfolio.
  • The average daily room rate, or ADR, for all hotels in operation, was RMB164 in the full year 2021, a 7.5% year-over-year increase.
  • The occupancy rate, or OCC for all hotels in operation was 71.1% in the full year 2021, compared with 68.7% in the full year 2020.
  • The revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR by its occupancy rate, was RMB116 in the full year 2021, a 11.3% year-over-year increase.

"While addressing unprecedented challenges brought by the pandemic, we have continued to focus on the execution of our strategic growth plan for the long term," said Mr. Alex Xu, Chairman and Chief Executive Officer of GreenTree. "Thanks to the hard work and vigilance of our team, franchisees and partners to protect the health, safety and comfort of our customers, we delivered solid results during the fourth quarter of 2021, recovering 91.3% of our RevPAR in this quarter compared to the same period in 2019.

Several waves of COVID-19 infections in parts of China in the fourth quarter of 2021 dampened user demand for hotels stays overall. Despite the impact of COVID-19 in November, and thanks to our resilient business model, RevPAR for the quarter recovered to 91.3% of its level in the same period in 2019. This performance was better than our industry's average and gave momentum to our business. We also made progress in some of our new business models, such as E-sports hotels. As a result, E-sports hotels have performed better throughout the pandemic, bringing stable occupancy rates and profits to our franchisees and partners.

Going into 2022, we are pleased to see that our business has maintained better momentum than our industry in January and February, especially during Chinese New Year. However, additional COVID-19 outbreaks in March slowed down the pace of recovery in the domestic hospitality industry, especially in top-tier cities. March was negatively impacted by the resurgence of COVID-19 in many parts of China, particularly in Jilin Province, Guangdong Province and Shanghai. While the hotel industry as a whole has been hit hard and is under tremendous pressure, we have been strongly supported by the unwavering dedication of our staff and partners. Their dedication gives us confidence for the future, in our ability to continue to navigate uncertainty and to emerge from the pandemic stronger than ever."

Fourth Quarter 2021 Financial Results


Quarter Ended


December 31, 2020


December 31, 2021


December 31, 2021


RMB


RMB


US$

Revenues






Leased-and-operated hotels

76,113,015


112,445,788


17,645,198

Franchised-and-managed hotels

207,222,721


184,749,925


28,991,295

others

6,420,830


10,236,732


1,606,366

Total revenues

289,756,566


307,432,445


48,242,859








Year Ended


December 31, 2020


December 31, 2021


December 31, 2021


RMB


RMB


US$

Revenues






Leased-and-operated hotels

227,074,041


391,960,031


61,507,082

Franchised-and-managed hotels

677,480,818


774,359,348


121,513,879

others

25,455,237


39,826,579


6,249,660

Total revenues

930,010,096


1,206,145,958


189,270,621

 

Total revenues for the fourth quarter of 2021 were RMB307.4 million (US$48.2 million) [1], a 6.1% year-over-year increase. The increase was primarily due to newly opened L&O and F&M hotels. Compared with the fourth quarter of 2019, before the COVID-19 outbreak, total revenues for the fourth quarter of 2021 increased by 6.2%. Total revenues for the full year 2021 were RMB1,206.1 million (US$189.3 million) [1], a 29.7% year-over-year increase. 

Total revenues from leased-and-operated hotels for the fourth quarter of 2021 were RMB112.4 million (US$17.6 million) [1], a 47.7% year-over-year increase. The increase was primarily due to a 1.2% year-over-year increase in L&O hotels' RevPAR and revenues from the 29 L&O hotels opened since the beginning of 2021. This revenue increase was partially offset by the closure of three L&O hotels over the same period. Total revenues from L&O hotels for the full year 2021 were RMB392.0 million (US$61.5 million) [1], a 72.6% year-over-year increase.

Total revenues from franchised-and-managed hotels for the fourth quarter of 2021 were RMB184.7 million (US$29.0 million) [1], a 10.8% year-over-year decrease. Initial franchise fees for the fourth quarter of 2021 increased by 5.7% year-over-year, mainly attributable to the gross opening of 132 F&M hotels and the closure of 105 F&M hotels. Recurring franchisee management fees and others for the fourth quarter of 2021 decreased by 12.4% year-over-year, primarily due to a 5.8% decrease in RevPAR due to impact of COVID-19  and the fee waiver to franchisees of quarantined hotels and hotels whose RevPAR has been severely affected by the pandemic. Total revenues from F&M hotels for the full year 2021 were RMB774.4 million (US$121.5 million) [1], a 14.3% year-over-year increase.


Quarter Ended


December 31, 2020


 December 31, 2021


 December 31, 2021


RMB


RMB


US$

Initial franchise fee

18,065,889


19,091,150


2,995,818

Recurring franchise management fee and others

189,156,832


165,658,775


25,995,477

Revenues from franchised-and-managed hotels

207,222,721


184,749,925


28,991,295








Year Ended


December 31, 2020


 December 31, 2021


 December 31, 2021


RMB


RMB


US$

Initial franchise fee

61,051,369


76,263,574


11,967,419

Recurring franchise management fee and others

616,429,449


698,095,774


109,546,460

Revenues from franchised-and-managed hotels

677,480,818


774,359,348


121,513,879

Total operating costs and expenses


Quarter Ended


 December 31, 2020


 December 31, 2021


 December 31, 2021


RMB


RMB


US$

Operating costs and expenses






Hotel operating costs

99,817,161


191,912,281


30,115,225

Selling and marketing expenses

24,232,688


10,649,862


1,671,196

General and administrative expenses

50,885,097


72,474,197


11,372,783

Other operating expenses

98,341


30,485


4,783

3Total operating costs and expenses

175,033,287


275,066,825


43,163,987








Year Ended


 December 31, 2020


 December 31, 2021


 December 31, 2021


RMB


RMB


US$

Operating costs and expenses






Hotel operating costs

392,522,306


651,376,905


102,215,250

Selling and marketing expenses

75,347,166


66,921,718


10,501,478

General and administrative expenses

172,557,554


268,252,836


42,094,724

Other operating expenses

1,731,405


4,937,625


774,821

Total operating costs and expenses

642,158,431


991,489,084


155,586,273

 

Hotel operating costs for the fourth quarter of 2021 were RMB191.9 million (US$30.1 million) [1], a 92.3% year-over-year increase. The increase was mainly attributable to the opening of 29 L&O hotels since the beginning of 2021, which resulted in higher rents, higher utilities and consumables, higher staff headcount and compensation expenses, higher depreciation and amortization, and higher ramp up costs. Excluding the impact from newly-opened L&O hotels in 2021, hotel operating costs for the fourth quarter of 2021 increased 19.7%. Hotel operating costs for the full year 2021 were RMB651.4 million (US$102.2 million) [1], a 65.9% year-over-year increase.


Quarter Ended


December 31,


December 31,


December 31,

2020


2021


2021


RMB


RMB


US$

Rental

28,196,927


63,622,588


9,983,772

Utilities

4,113,416


6,306,575


989,639

Personnel cost

10,034,679


29,867,603


4,686,879

Depreciation and amortization

13,450,611


29,110,325


4,568,045

Consumable, food and beverage

11,584,105


20,471,596


3,212,440

Costs of general managers of franchised-and-managed hotels

26,088,907


29,807,622


4,677,466

Other costs of franchised-and-managed hotels

5,132,814


6,004,107


942,175

Others

1,215,702


6,721,865


1,054,809

Hotel Operating Costs

99,817,161


191,912,281


30,115,225








Year Ended


December 31,


December 31,


December 31,

2020


2021


2021


RMB


RMB


US$

Rental

118,295,183


235,568,383


36,965,820

Utilities

15,372,385


25,782,913


4,045,902

Personnel cost

41,330,758


82,114,394


12,885,540

Depreciation and amortization

50,324,493


80,575,644


12,644,077

Consumable, food and beverage

43,257,796


69,495,702


10,905,392

Costs of general managers of franchised-and-managed hotels

91,664,745


114,779,305


18,011,378

Other costs of franchised-and-managed hotels

22,985,917


26,123,578


4,099,359

Others

9,291,029


16,936,986


2,657,782

Hotel Operating Costs

392,522,306


651,376,905


102,215,250

 

Selling and marketing expenses for the fourth quarter of 2021 were RMB10.6 million (US$1.7 million) [1], a 56.1% year-over-year decrease. The decrease was mainly attributable to lower advertising expenses. Selling and marketing expenses for the full year 2021 were RMB66.9 million (US$10.5 million) [1], a 11.2% year-over-year decrease. 

General and administrative expenses for the fourth quarter of 2021 were RMB72.5 million (US$11.4 million) [1], a 42.4% year-over-year increase. The increase was mainly attributable to the opening of 29 L&O hotels since the beginning of 2021, increased one-time consulting fees for capital markets advice and increased bad debts during 2021. Excluding the impact from newly-opened L&O hotels and one-time consulting fees, general and administrative expenses for the fourth quarter of 2021 increased by 19.9%. General and administrative expenses for the full year 2021 were RMB268.3 million (US$42.1 million) [1], a 55.5% year-over-year decrease.

Gross profit for the fourth quarter of 2021 was RMB115.5 million (US$18.1 million) [1], a year-over-year decrease of 39.2%. Gross margin for the fourth quarter of 2021 was 37.6%, compared to 65.6% 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 full year 2021 was RMB554.8 million (US$87.1 million) [1], a 3.2% year-over-year increase.

Income from operations for the fourth quarter of 2021 was RMB36.1 million (US$5.7 million) [1], a year-over-year decrease of 69.5%, with a margin of 11.8%. 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 for the fourth quarter of 2021 was RMB261.4 million, a year-over-year increase of 16.6%, with a margin of 54.3%. Income from operations for the full year 2021 was RMB241.7 million (US$37.9 million)  [1], a year-over-year decrease of 24.3%.

Net income for the fourth quarter of 2021 was RMB28.6 million (US$4.5 million) [1], compared to RMB79.5 million in the fourth quarter of 2020 and net margin was 9.3%. 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 full year 2021 was RMB207.8 million(US$32.6 million) [1], a year-over-year decrease of 15.1%.

Adjusted EBITDA (non-GAAP) [2] for the fourth quarter of 2021 was RMB68.7 million (US$10.8 million) [1], a year-over-year decrease of 47.4%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, for the fourth quarter of 2021 was 22.4%, compared to 45.1% a year ago. Excluding the impact of newly-opened hotels, adjusted EBITDA (non-GAAP) for the fourth quarter of 2021 was RMB105.0 million, with a margin of 40.2%. Adjusted EBITDA (non-GAAP) for the full year 2021 was RMB317.7 million (US$49.9 million) [1], a year-over-year decrease of 10.6%.

Core net income (non-GAAP) for the fourth quarter of 2021 was RMB35.8 million (US$5.6 million) [1], a year-over-year decrease of 67.2%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, for the fourth quarter of 2021 was 11.7%, compared to 37.7% one year ago. Core net income (non-GAAP) for the full year 2021 was RMB208.8 million (US$32.7 million) [1], a year-over-year decrease of 27.9%.

Earnings per ADS (basic and diluted) for the fourth quarter of 2021 were RMB0.25 (US$0.04) [1], down from RMB0.83 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) for the fourth quarter of 2021 was RMB0.35 (US$0.05) [1], down from RMB1.06 a year ago. Earnings per ADS (basic and diluted) for the full year 2021 was RMB2.05 (US$0.32) [1] down from RMB2.54 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB2.03 (US$0.32) [1] for the full year 2021, a decrease from RMB2.81 a year ago.

Cash flow Operating cash inflow for the fourth quarter of 2021 was RMB201.3 million (US$31.6 million) [1] as a result of income from operations. Investing cash outflow for the fourth quarter of 2021 was RMB256.4 million (US$40.2 million) [1], which was primarily attributable to purchases of short-term investment, investments and deposits for property and equipment, and loans to franchisees. The investing cash outflow was partially offset by proceeds from short-term investments. Financing cash inflow for the fourth quarter of 2021 was RMB154.2 million (US$24.2 million), mainly attributable to dividends distributed by the end of the year 2021. Operating cash inflow for the full year 2021 was RMB361.0 million (US$56.6 million) [1]. Investing cash outflow for the full year 2021 was RMB928.4 million (US$145.7 million) [1]. Financing cash inflow for the full year 2021 was RMB255.6 million (US$40.1 million) [1].  

Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposit. As of December 31 , 2021, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,235.9 million (US$193.9 million) [1], compared to RMB1,192.1 million as of September 30, 2021. The increase from the prior quarter was primarily attributable to drawing down of bank facilities offset by dividend distribution to our shareholders, acquisition costs of our L&O hotels, changes in fair value of equity securities and loans to franchisees.

COVID-19 Update

Despite the resurgence of COVID-19 in the fourth quarter of 2021, we delivered solid results, with RevPAR recovering to 91.3% of its level in the same period in 2019. At the end of December 2021, our RevPAR had bounced back to almost 100% of its level in the fourth quarter of 2019 (the "4Q2019 Level"). With the resurgence of COVID-19 nationwide, our RevPAR fell to around 81.3% of the 4Q2019 Level in the first week of November 2021, but gradually recovered to 98.5% of the 4Q2019 Level in the last week of December 2021. In early 2022, hotels braced for a rush of guests during the Chinese New Year due to family reunions and anticipated recovery in domestic tourism, leading to a boom for the hospitality industry. In the first quarter of 2022, the Company's RevPAR temporarily reached 88% of its level in the first quarter of 2019. However, the reintroduction of travel restrictions due to increased omicron variant cases led to a decline in RevPAR.

At the beginning of 2022, another round of COVID outbreaks in March and April led to some restrictions in major cities being locked down, and millions of residents confined at home, slowing down the recovery pace of the domestic hospitality industry, especially in top-tier cities. Outbreaks in Jilin Province, Guangdong Province and Shanghai in March led to a drop in our RevPAR of the first week of May to only 56.0% of its level at the same time in 2019. A certain number of our hotels participate in domestic quarantine programs. We help local governments implement quarantine policies, help our guests isolate safely, and help our franchisees stabilize their income. We believe our hotels' participation can help them stay competitive in the industry. While China's domestic market remains under pressure due to a new wave of infections and the rapid increase in omicron cases, we believe we can continue to outperform the industry across business lines.

Guidance

Assuming the recent resurgences of COVID-19 remain under control in China and the market will recover in the third quarter and fourth quarter, the Company expects an increase in total revenues of up to 5% for the full year 2022, compared to 2021.

The guidance set forth above reflects the Company's current and preliminary views based on its recovery and may not be indicative of the final financial results for any future interim period and/or the full year ending December 31, 2022.

Share Repurchase Program

The Company today also announced that its board of directors has authorized a share repurchase program under which the Company may repurchase up to US$20 million worth of its outstanding (i) American depositary shares ("ADSs"), each representing one Class A ordinary share, and/or (ii) Class A ordinary shares over the next 12 months.

Under the share repurchase program, the Company may repurchase its ADSs from time to time through open market transactions at prevailing market prices, privately negotiated transactions, block trades or any combination thereof. The Company will also effect repurchase transactions in compliance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and its insider trading policy, as applicable. The number of ADSs repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with the Company's working capital requirements and general business conditions. The Company's board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size. The Company plans to fund the repurchases from its existing cash balance and does not expect the repurchase program to adversely affect its existing growth plan and strategies.

Conference Call

GreenTree's management will hold an earnings conference call at 8:00 PM U.S. Eastern Time on May 11, 2022, (9:00 AM Beijing/Hong Kong Time on May12, 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 May, 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 December 31 2021, GreenTree had a total number of 4,659 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,


December 31,


December 31,

2020


2021


2021


RMB


RMB


US$

ASSETS






Current assets:






Cash and cash equivalents

611,358,209


298,428,709


46,829,977

Restricted cash

-


3,300,000


517,842

Short-term investments

301,983,182


557,458,675


87,477,431

Investments in equity securities

242,378,696


157,988,851


24,791,898

Accounts receivable, net of allowance

101,511,057


95,589,936


15,000,147

Amounts due from related parties

9,770,871


310,419,860


48,711,650

Prepaid rent

13,597,867


15,454,967


2,425,222

Inventories

3,804,680


2,297,584


360,541

Other current assets

77,649,794


135,626,370


21,282,736

Loans receivable, net

222,244,629


323,141,251


50,707,914

Total current assets

1,584,298,985


1,899,706,203


298,105,358







Non-current assets:






Restricted cash

22,369,900


18,869,900


2,961,099

Long-term time deposits

490,000,000


160,000,000


25,107,491

Loans receivable, net

145,703,988


303,150,438


47,570,919

Property and equipment, net

668,605,661


1,052,467,058


165,155,048

Intangible assets, net

491,513,073


520,117,479


81,617,782

Goodwill

100,231,487


120,819,948


18,959,286

Long-term investments

369,525,917


188,790,785


29,625,394

Other assets

66,635,394


329,366,340


51,684,767

Deferred tax assets

156,070,112


138,776,214


21,777,016

 TOTAL ASSETS

4,094,954,517


4,732,064,365


742,564,160













LIABILITIES AND EQUITY






Current liabilities:






Short-term bank loans

150,000,000


406,200,000


63,741,644

Accounts payable

19,606,344


24,036,544


3,771,858

Advance from customers

34,305,508


39,773,738


6,241,367

Amounts due to related parties

3,198,253


9,530,627


1,495,563

Salary and welfare payable

51,567,587


60,154,565


9,439,564

Deferred rent

1,356,132


1,926,957


302,382

Deferred revenue

221,314,997


215,147,975


33,761,412

Accrued expenses and other current liabilities

300,696,673


379,907,548


59,615,785

Income tax payable

87,483,970


71,384,087


11,201,721

Dividends payable

-


40,999,458


6,433,710

Total current liabilities

869,529,464


1,249,061,499


196,005,006







Long-term bank loans

-


301,800,000


47,359,006

Deferred rent

28,642,973


68,842,692


10,802,921

Deferred revenue

361,901,369


314,472,488


49,347,596

Other long-term liabilities

115,862,713


132,046,925


20,721,044

Deferred tax liabilities

178,413,413


247,002,602


38,760,098

Unrecognized tax benefits

290,679,902


284,542,615


44,650,945

 TOTAL LIABILITIES

1,845,029,834


2,597,768,821


407,646,616







Shareholders' equity:






Class A ordinary shares

222,587,070


222,587,070


34,928,768

Class B ordinary shares

115,534,210


115,534,210


18,129,839

Additional paid-in capital

1,149,280,404


1,151,384,306


180,677,323

Retained earnings

570,042,924


420,458,688


65,979,143

Accumulated other comprehensive income

45,586,647


39,089,244


6,133,955

Total GreenTree Hospitality Group Ltd. shareholders' equity

2,103,031,255


1,949,053,518


305,849,028







Non-controlling interests

146,893,428


185,242,026


29,068,516

Total shareholders' equity

2,249,924,683


2,134,295,544


334,917,544







TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

4,094,954,517


4,732,064,365


742,564,160

 

 

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income



Quarter Ended


Year Ended


 December 31, 2020


 December 31, 2021


 December 31, 2021


 December 31, 2020


 December 31, 2021


 December 31, 2021


RMB


RMB


US$


RMB


RMB


US$

Revenues












Leased-and-operated hotels

76,113,015


112,445,788


17,645,198


227,074,041


391,960,031


61,507,082

Franchised-and-managed hotels

207,222,721


184,749,925


28,991,295


677,480,818


774,359,348


121,513,879

Others

6,420,830


10,236,732


1,606,366


25,455,237


39,826,579


6,249,660

Total revenues

289,756,566


307,432,445


48,242,859


930,010,096


1,206,145,958


189,270,621













Operating costs and expenses












Hotel operating costs

(99,817,161)


(191,912,281)


(30,115,225)


(392,522,306)


(651,376,905)


(102,215,250)

Selling and marketing expenses

(24,232,688)


(10,649,862)


(1,671,196)


(75,347,166)


(66,921,718)


(10,501,478)

General and administrative expenses

(50,885,097)


(72,474,197)


(11,372,783)


(172,557,554)


(268,252,836)


(42,094,724)

Other operating expenses

(98,341)


(30,485)


(4,783)


(1,731,405)


(4,937,625)


(774,821)

Total operating costs and expenses

(175,033,287)


(275,066,825)


(43,163,987)


(642,158,431)


(991,489,084)


(155,586,273)













Other operating income

3,728,194


3,781,098


593,337


31,399,552


27,059,935


4,246,294

Income from operations 

118,451,473


36,146,718


5,672,209


319,251,217


241,716,809


37,930,642













Interest income and other, net

25,072,336


14,894,610


2,337,289


72,934,212


59,974,418


9,411,295

Interest expense

(514,466)


(2,707,595)


(424,881)


(3,456,316)


(12,671,385)


(1,988,417)

Gains (losses) from investment in equity securities

(27,038,739)


(15,214,276)


(2,387,452)


(36,773,521)


11,929,538


1,872,005

Other income, net

1,779,000


8,322,668


1,306,008


2,296,981


11,818,559


1,854,590

Income before income taxes

117,749,604


41,442,125


6,503,173


354,252,573


312,767,939


49,080,115













Income tax expense 

(38,060,701)


(12,266,354)


(1,924,858)


(110,459,202)


(105,313,904)


(16,526,050)

Income before share of gains in equity investees

79,688,903


29,175,771


4,578,315


243,793,371


207,454,035


32,554,065













Share of gains in equity investees, net of tax 

(209,178)


(624,273)


(97,962)


909,364


382,874


60,081

Net income

79,479,725


28,551,498


4,480,353


244,702,735


207,836,909


32,614,146













Net loss/(income) attributable to non-controlling interests

6,078,488


(2,616,666)


(410,612)


16,641,655


3,761,411


590,248

Net income attributable to ordinary shareholders 

85,558,213


25,934,832


4,069,741


261,344,390


211,598,320


33,204,394













Net earnings per share












Class A ordinary share-basic and diluted

0.83


0.25


0.04


2.54


2.05


0.32

Class B ordinary share-basic and diluted

0.83


0.25


0.04


2.54


2.05


0.32













Net earnings per ADS












Class A ordinary share-basic and diluted

0.83


0.25


0.04


2.54


2.05


0.32

Class B ordinary share-basic and diluted

0.83


0.25


0.04


2.54


2.05


0.32













Weighted average shares outstanding












Class A ordinary share-basic and diluted

68,286,954


68,286,954


68,286,954


68,286,954


68,286,954


68,286,954

Class B ordinary share-basic and diluted

34,762,909


34,762,909


34,762,909


34,762,909


34,762,909


34,762,909













Other comprehensive income, net of tax












Foreign currency translation adjustments

(18,663,525)


(6,398,752)


(1,004,104)


(19,714,207)


(6,497,403)


(1,019,584)

Comprehensive income, net of tax

60,816,200


22,152,746


3,476,249


224,988,528


201,339,506


31,594,562













Comprehensive loss/(income) attributable to non-controlling interests

6,078,488


(2,616,666)


(410,612)


16,641,655


3,761,411


590,247

Comprehensive income attributable to ordinary shareholders

66,894,688


19,536,080


3,065,637


241,630,183


205,100,917


32,184,809


 

 

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows



 Quarter Ended


Year Ended


 December 31, 2020


 December 31, 2021


 December 31, 2021


 December 31, 2020


 December 31, 2021


 December 31, 2021


RMB


RMB


US$


RMB


RMB


US$

Operating activities:












Net income

79,479,725


28,551,498


4,480,353


244,702,735


207,836,909


32,614,146













Adjustments to reconcile net income to net cash provided by operating activities:












Depreciation and amortization 

15,801,122


36,374,869


5,708,011


65,869,971


98,110,657


15,395,703

Share of (gains) losses in equity method investments 

209,178


624,272


97,962


(909,364)


(382,874)


(60,081)

Gain from disposal of subsidiaries

(1,779,000)


3,609,755


566,449


(1,779,000)


118,443


18,586

Interest income 

(4,483,050)


(432,726)


(67,904)


(11,542,121)


(3,669,643)


(575,847)

Bad debt expense 

7,900,690


18,153,276


2,848,645


29,953,404


44,798,296


7,029,830

(Gains)losses from investments in equity securities

27,020,151


13,215,057


2,073,731


44,506,823


(11,929,538)


-1,872,005

(Gains) losses on disposal of property and equipment 

-


604,017


94,783




604,017


94,783

Foreign exchange (gains) losses

4,985,504


(3,067,177)


-481,307


4,723,948


(1,310,347)


(205,622)

Share-based compensation 

-


619,405


97,198


232,558


2,464,762


386,775

Income tax expenses related to dividend distribution or retained profits

(14,576,403)


-


-


-


-


-













Changes in operating assets and liabilities:












Accounts receivable 

14,567,549


6,029,230


946,118


(28,789,041)


(22,329,328)


(3,503,959)

Prepaid rent 

(5,367,732)


3,665,273


575,161


5,196,798


(1,857,100)


(291,420)

Inventories 

230,924


(37,664)


(5,910)


(1,281,009)


1,495,974


234,751

Amounts due from related parties 

193,653


(3,364,817)


(528,013)


10,329,181


(3,963,547)


(621,967)

Other current assets 

(15,613,220)


51,188,525


8,032,596


(18,807,170)


(60,345,478)


(9,469,520)

Other assets 

(4,022,768)


(31,054,726)


(4,873,164)


(19,680,102)


(49,214,290)


(7,722,796)

Accounts payable 

(2,941,115)


3,839,558


602,510


4,546,551


4,520,260


709,327

Amounts due to related parties 

1,206,655


4,416,205


692,999


(319,778)


6,332,374


993,688

Salary and welfare payable 

(864,348)


3,053,142


479,105


8,913,678


8,586,978


1,347,484

Deferred revenue 

(26,912,184)


(27,733,753)


(4,352,031)


(59,516,154)


(53,595,903)


(8,410,367)

Advance from customers 

2,297,569


13,590,894


2,132,708


(5,800,119)


5,468,230


858,085

Accrued expenses and other current liabilities 

(2,091,191)


23,308,529


3,657,617


13,169,673


70,171,021


11,011,364

Income tax payable 

24,167,283


4,428,882


694,988


(6,354,794)


(16,099,883)


(2,526,423)

Unrecognized tax benefits 

15,330,247


-29,991,717


-4,706,355


29,038,185


(6,137,287)


(963,074)

Deferred rent 

2,214,208


12,631,176


1,982,107


6,997,755


40,770,544


6,397,788

Other long-term liabilities 

(7,153,657)


(5,162,255)


(810,070)


(5,549,798)


14,648,804


2,298,717

Deferred taxes 

2,953,072


74,237,689


11,649,513


(12,595,878)


85,883,087


13,476,930

Net cash provided by operating activities 

112,752,862


201,296,417


31,587,800


295,256,932


360,975,138


56,644,876













Investing activities:












Purchases of property and equipment 

(43,353,048)


(90,716,702)


(14,235,430)


(111,929,994)


(341,715,516)


(53,622,621)

Purchases of intangible assets 

(878,818)


-


-


(887,893)


(201,746)


(31,658)

Proceeds from disposal of property and equipment 

8,968


-


-


80,355


-


-

Payment for acquisition of minority equity

-


(150,000)


(23,538)


-


(1,018,387)


(159,807)

Acquisitions, net of cash received

(14,547,587)


(5,414,241)


(849,613)


(18,415,807)


(147,608,325)


(23,162,967)

Advances for acquisitions

(6,550,000)


-4,436,494


-696,183


(6,550,000)


-39,483,494


-6,195,822

Collection of acquisition advances

40,000


937,000


147,036


36,352,700


12,154,500


1,907,306

Advances for purchases of property and equipment

-


(14,456,878)


(2,268,600)


-


(219,346,261)


(34,420,215)

Repayment from advances for purchases of property and equipment

-


-


-


-


22,400,000


3,515,049

Purchases of short-term investments 

(58,296,194)


-178,266,887


-27,973,965


(206,596,401)


-378,189,081


-59,346,119

Proceeds from short-term investments 

45,983,050


136,842,693


21,473,605


453,434,366


536,383,232


84,170,234

Proceeds from sales of long-term time deposits

-


-


-


-


50,000,000


7,846,091

Increase of long-term time deposits

-


-


-


-30,000,000


(130,000,000)


(20,399,837)

Purchases of investments in equity securities

(65,829,314)


(8,940,000)


(1,402,881)


(65,829,314)


(8,940,000)


(1,402,881)

Proceeds from disposal of subsidiaries

2,183,350


1,693,391


265,730


2,183,350


1,693,391


265,730

Proceeds from disposal of equity securities and dividends received from equity securities

64,792


72,697,479


11,407,821


198,976


284,004,591


44,566,518

Proceeds from disposal of euqity method investments

-


-


-


6,380,000


-


-

Loan to related parties

(223,590,000)


(320,326,394)


(50,266,200)


(528,356,500)


(604,618,943)


(94,877,907)

Repayment from related parties

242,740,000


157,518,000


24,718,011


539,996,179


307,933,500


48,321,486

Loan to third parties

(55,000,000)


(15,500,000)


(2,432,288)


(62,000,000)


(36,944,271)


(5,797,362)

Repayment of loan from third parties

-


17,570,000


2,757,116


-


55,127,367


8,650,687

Loan to franchisees

(13,060,194)


(35,040,000)


(5,498,541)


(218,821,974)


(423,399,028)


(66,440,547)

Repayment from franchisees

28,408,205


29,576,983


4,641,274


99,209,300


133,380,285


20,930,277

Net cash (used in) provided by investing activities 

(161,676,790)


(256,412,050)


(40,236,646)


(111,552,657)


(928,388,186)


(145,684,365)













Financing activities:












Distribution to the shareholders

-


(320,253,160)


(50,254,710)


-


(320,253,160)


(50,254,710)

Loan from non controlling interest

9,148,249


6,897,050


1,082,298


20,585,804


9,689,903


1,520,557

Repayment of short-term borrowings 

(60,000,000)


(200,000,000)


(31,384,364)


(70,000,000)


(250,000,000)


(39,230,455)

Proceeds from short-term borrowings

150,000,000


668,000,000


104,823,777


160,000,000


808,000,000


126,792,832

Capital contribution from noncontrolling interest holders

681,000


(490,000)


(76,892)


6,943,589


8,191,000


1,285,347

Payment for contingent consideration





-


(2,001,521)





Net cash provided by (used in) financing activities 

99,829,249


154,153,890


24,190,109


115,527,872


255,627,743


40,113,571













Effect of exchange rate changes on cash and cash equivalents 

(6,781,751)


271,089


42,540


(7,664,261)


(1,344,197)


(210,934)

Net increase(decrease) in cash and cash equivalents and restricted cash

44,123,570


99,309,346


15,583,803


291,567,886


(313,129,502)


(49,136,852)

Cash and cash equivalents and restricted cash at the beginning of the period

589,604,539


221,289,261


34,725,114


342,160,223


633,728,109


99,445,769

Cash and cash equivalents and restricted cash at the end of the period 

633,728,109


320,598,607


50,308,917


633,728,109


320,598,609


50,308,918

 

 

 

GreenTree Hospitality Group Ltd.

Unaudited Reconciliation of GAAP and Non-GAAP Results


Quarter Ended


Year Ended


 December 31, 2020


 December 31, 2021


 December 31, 2021


 December 31, 2020


 December 31, 2021


 December 31, 2021


RMB


RMB


US$


RMB


RMB


US$

Net income

79,479,725


28,551,498


4,480,353


244,702,735


207,836,909


32,614,146













Deduct:












Other operating income

3,728,194


3,781,098


593,337


31,399,552


27,059,935


4,246,294

Interest income and other, net

25,072,336


14,894,610


2,337,289


72,934,212


59,974,418


9,411,295

Gains from investment in equity securities

-


-


-


45,440,136


11,929,538


1,872,005

Share of gain in equity investees, net of tax

-


-


-


1,118,542


382,874


60,081

Other income, net

1,779,000


8,322,668


1,306,008


2,296,981


11,818,559


1,854,590













Add:












Other operating expenses

98,341


30,485


4,784


1,731,405


4,937,625


774,821

Income tax expense

38,060,701


12,266,354


1,924,859


110,459,202


105,313,904


16,526,050

Share of loss in equity investees, net of tax

209,178


624,273


97,962


209,178


-


-

Interest expense

514,466


2,707,595


424,881


3,456,316


12,671,385


1,988,417

Depreciation and amortization

15,801,122


36,374,868


5,708,011


65,869,971


98,110,656


15,395,703

Losses from investment in equity securities

27,038,739


15,214,276


2,387,452


82,213,657


-


-

Adjusted EBITDA(Non-GAAP)

130,622,742


68,770,974


10,791,666


355,453,041


317,705,156


49,854,871














Quarter Ended


Year Ended


 December 31, 2020


 December 31, 2021


 December 31, 2021


 December 31, 2020


 December 31, 2021


 December 31, 2021


RMB


RMB


US$


RMB


RMB


US$

Net income

79,479,725


28,551,498


4,480,353


244,702,735


207,836,909


32,614,146













Deduct:












Government subsidies (net of 25% tax)

853,820


1,322,633


207,550


15,071,058


12,745,154


1,999,993

Gains from investment in equity securities  (net of 25% tax)

-


-


-


-


8,947,154


1,404,004

Other income  (net of 25% tax)

1,334,250


6,242,001


979,506


1,722,736


8,863,919


1,390,942













Add:












Share-based compensation



619,405


97,198


232,558


2,464,762


386,775

Losses from investments in equity securities  (net of  25% tax)

25,784,922


11,410,707


1,790,589


41,786,009


-


-

One-time  fees and expense

6,264,115


2,857,008


448,327


19,604,565


24,568,935


3,855,402

Asset impairment/Accrued bad debt





-




4,523,574


709,847

 Core net income(Non-GAAP)

109,340,692


35,873,984


5,629,411


289,532,073


208,837,953


32,771,232













Core net income per ADS (Non-GAAP)












Class A ordinary share-basic and diluted

1.06


0.34


0.05


2.81


2.02


0.32

Class B ordinary share-basic and diluted

1.06


0.34


0.05


2.81


2.02


0.32

 

Operational Data  


2020 Q4

2021Q4

Total hotels in operation:

4,340

4,659

  Leased and owned hotels

40

66

  Franchised hotels

4,300

4,593

Total hotel rooms in operation

315,335

337,153

  Leased and owned hotels

4,888

7,064

  Franchised hotels

310,447

330,089

Number of cities

345

367








Quarter Ended

2020 Q4

2021Q4

 Occupancy rate (as a percentage)



 Leased-and-owned hotels

71.0%

60.9%

 Franchised hotels

76.8%

69.5%

 Blended

76.7%

69.2%

 Average daily rate (in RMB)



 Leased-and-owned hotels

190

224

 Franchised hotels

162

168

 Blended

162

170

RevPAR (in RMB)



 Leased-and-owned hotels

135

136

 Franchised hotels

124

117

 Blended

124

117





Year Ended

2020

2021

 Occupancy rate (as a percentage)



 Leased-and-owned hotels

57.8%

63.4%

 Franchised hotels

68.9%

71.3%

 Blended

68.7%

71.1%

 Average daily rate (in RMB)



 Leased-and-owned hotels

179

213

 Franchised hotels

152

163

 Blended

152

164

RevPAR (in RMB)



 Leased-and-owned hotels

104

135

 Franchised hotels

105

116

 Blended

105

116

 


Number of Hotels in Operation

Number of Hotel Rooms in Operation


2020 Q4

2021Q4

2020 Q4

2021Q4

Luxury

23

33

4,749

6,265

Argyle

23

33

4,749

6,265

 Mid-to-up-scale

360

519

32,337

47,666

 GreenTree Eastern

151

204

15,653

22,246

 Deepsleep Hotel

3

6

221

417

 Gem

35

46

3,202

4,173

 Gya

42

62

3,572

5,302

 Vx

33

79

2,681

7,021

Ausotel

13

18

1,666

2,237

Urban Garden and others

83

104

5,342

6,270

 Mid-scale

2,786

2,932

225,069

230,750

 GreenTree Inn

2,163

2,169

181,295

178,849

 GT Alliance

374

515

28,560

36,802

 GreenTree Apartment

13

16

862

1,098

Vatica 

121

112

8,749

8,115

City 118 Selected and others

115

120

5,603

5,886

 Economy hotels

1171

1,175

53,180

52,472

Shell

620

650

26,784

28,196

City 118 and others

551

525

26396

24,276

Total

4,340

4,659

315,335

337,153

 

For more information, please contact:

GreenTree

Ms. Selina Yang
Phone: +86-21-3617-4886 ext. 7999
E-mail: ir@998.com

Mr. Nicky Zheng
Phone: +86-21-3617-4886 ext. 6708
E-mail: ir@998.com 

Christensen

In Shanghai
Mr. Jerry Xu
Phone: +86-138-1680-0706
E-mail: jxu@christensenir.com

In Hong Kong 
Ms. Karen Hui 
Phone: +852-9266-4140 
E-mail: khui@christensenIR.com

In US 
Ms. Linda Bergkamp 
Phone: +1-480-614-3004
Email: lbergkamp@ChristensenIR.com

 

1  The conversion of Renminbi ("RMB")into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.3726 on December 31, 2021 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20220103/

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 and 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 and asset impairment/accrued bad debt 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.

View original content:https://www.prnewswire.com/news-releases/greentree-hospitality-group-ltd-reports-fourth-quarter-and-fiscal-year-2021-financial-results-301545613.html


Source: GreenTree Hospitality Group Ltd. Related Stocks: NYSE:GHG