GreenTree Hospitality Group Ltd. · NYSE:GHG
GreenTree Hospitality — Q1 2019 Earnings Presentation
23 slides from GreenTree Hospitality's earnings presentation, May 24, 2019
Slide 1: GreenTree Hospitality Group Ltd. 2019 Q1 Results Presentation
Comfort Quality Value Convenience GreenTree Hospitality Group Ltd. 2019 Q1 Results Presentation | May 24, 2019 Notes: * currently being registered as trademark in PRC
Slide 2: Disclaimer
Disclaimer This presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities. Neither this presentation nor any part of it shall form the basis of or be relied upon in connection with any cont
Slide 3: Agenda
Agenda 1 Performance Review 4 2 Operational and Financial Highlights 12 3 Appendix: Hotel Performance 20 3
Slide 4: 1. Performance Review
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Slide 5: Q1 2019 Performance Overview
Q1 2019 Performance Overview As of March 31, 2019 98.9% F&M Hotels (1) 2,829 Hotels 102 New Hotel Openings for Q1 78.0% Revenue from F&M Hotels 225,757 Rooms 481 Hotels Contracted for or under Development ADR: +3.9% YoY to RMB162 Revenue: +20.1% YoY to RMB235M Occupancy: -1.1% YoY to 78.1% Gross Pro
Slide 6: 2019Q1 Important Events
2019Q1 Important Events 2019 Q1 2019 Q2 Wumian and GreenTree apartment Membership program integration Acquired 8.27% of shares in Gingko Education Group. Entered into an Entered into an agreement to acquire a agreement to acquire a 60% equity stake in Argyle Hotel Group. It 70% equity stake
Slide 7: Continued Strategic Focus on the F&M Model
Continued Strategic Focus on the F&M Model 98.9% of Our Hotel Portfolio are F&M Hotels F&M Hotels Contribute ~78% of Our Revenue % of F&M hotels Revenue, % 100 100 23 22 25 29 98.9 98.9 98.9 80 99 98.4 98 60 97.6 97 40 78 75 77 71 96 20 95 0 2015 2016 2017 2018 19Q1 2016 2017 2018 19Q1 F&M Hotels L&
Slide 8: Loyal Membership Growth
Loyal Membership Growth 94.2% of rooms nights sold through direct sales Individual Membership Growth Increase in Corporate Members MM (Million members) ‘000 35 1,500 33 1,320 1,270 30 1,250 29 25 1,000 20 750 15 500 Dec 31, 2018 Mar 31, 2019 Dec 31, 2018 Mar 31, 2019 8
Slide 9: RevPAR Growth by Quarters
RevPAR Growth by Quarters Quarterly RevPAR RMB 152 145 150 142 137 131 131 135 124 123 124 145 127 115 119 139 135 117 129 132 111 108 100 129 117 119 100 92 50 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 F&M L&O F&M Quarterly L&O Quarterly Growth Trend Growth Trend RevPAR YoY G
Slide 10: Growing Hotel Pipeline
Growing Hotel Pipeline Growth in business to Mid-to-up-scale and Economy Increasing Hotel Pipeline Segments contributes to a More Diversified Portfolio Number of hotels contracted for or under development GreenTree Eastern, Gme, Gya Vatica and Shell & VX 130 508 123 500 465 5 115 121 108 14 500 481
Slide 11: Further Development of Business to Mid-to-up-scale Brands
Further Development of Business to Mid-to-up-scale Brands ● Mid-to-up-scale business hotels designed ● Mid-to-up-scale smart, fashionable and ● Mid-to-up-scale leisure hotels that combine to be a calm and unique haven for trendy hotels highlighting individuality youthful trends with artistic interio
Slide 12: 2. Operational and Financial Highlights
2. Operational and Financial Highlights 12
Slide 13: Growth with Low Closure Rate
Growth with Low Closure Rate Increasing Number of Hotels in Operation Hotel Openings / Closures Number of hotels 3,000 554 2,829 600 2,757 30 500 425 29 401 400 474 2,500 300 2,354 357 377 2,289 200 26 26 100 Opened in Opened in Opened in Q1 2016 44 Q1 2017 48 Q1 2018 80 102 0 1,964 (88) (100) (86)
Slide 14: Improving ADR and Stable Occupancy Lead to Sustained RevPAR Growth
Improving ADR and Stable Occupancy Lead to Sustained RevPAR Growth The Company has achieved a steady 2.5% RevPAR YoY growth. ADR Occupancy RevPAR RMB % RMB 100 150 200 200 193 127 124 80 119 119 80 77 78 78 120 115 117 168 159 162 152 155 149 100 150 61 60 92 58 59 60 90 100 40 60 50 20 30 0 0 0 16Q
Slide 15: Revenue Growth
Revenue Growth Total Revenue Revenue from F&M Hotels RMB (M) RMB (M) 300 200 183 150 150 250 235 100 50 196 200 0 18Q1 19Q1 Revenue from L&O Hotels 150 RMB (M) 100 100 75 52 50 46 50 25 0 0 18Q1 19Q1 18Q1 19Q1 15
Slide 16: Operating Cost and Expenses
Operating Cost and Expenses Total Operating Costs and Expenses(1) Hotel Operating Costs RMB (M) % of Revenue RMB (M) % of Revenue 35% 80 200 65% 80 64 34.0% 32.5% 40 0% 0 18Q1 19Q1 150 55% 55.4% Selling and Marketing Expenses 48.4% 130 RMB (M) % of Revenue 30 15% 25 10.5% 20 10 100 95 45% 10 5.3% 0
Slide 17: Profitability
Profitability Gross Profit and Margin Adjusted EBITDA and Margin(1) Core Net Income/Net Income and Margin(2) RMB (M) % RMB (M) % RMB (M) % 250 250 70% 250 60% 75% 56.9% 67.5% 66.0% 57.0% 56.9% 200 200 200 50% 60% 155 50% 43.1% 150 150 150 40% 132 45% 134 134 39.9% 39.2% 112 100 100 100 92 30% 30% 84
Slide 18: Cash and Cash Equivalents
Cash and Cash Equivalents Total cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposit of RMB2,181M as of March 31, 2019 RMB (M) 2,500 122 (208) 6 2,000 1,500 2,261 2,181 1,000 500 0 Cash & Cash Equivalents, Restricted Cash from Operatin
Slide 19: Guidance; Thank you! Q&A
Guidance • Expect total revenue for the full year of 2019 to grow 20-25% from 2018 Thank you! Q&A 19
Slide 20: Appendix: Hotel Performance
Appendix: Hotel Performance 20
Slide 21: Our Hotel Brands
Our Hotel Brands Year Hotels Hotel Rooms Our Brands Price (RMB) Founded in Operation in Operation Business to 300–600 2012 91 9,732 Mid-to-up-scale 280–350 2017 32 2,924 (1) 270-400 2018 1 62 Mid-Scale (2) 150–400 2008 294 23,090 (2) 180–400 2004 1,901 164,181 Economy 4000/month 2018 2 129 130–300 2
Slide 22: Hotel Breakdown by Segment
Hotel Breakdown by Segment Number of Hotels in Operation Number of Hotel Rooms in Operation 2018Q1 2019Q1 2018Q1 2019Q1 Economy hotels 287 508 15,810 25,639 Vatica 111 121 8,280 8,923 Shell 176 387 7,530 16,716 Mid-scale 2,012 2,198 173,456 187,462 GreenTree Inn 1,755 1,901 152,821 164,181 GT Allian
Slide 23: Hotel Operational Data
Hotel Operational Data 2018Q1 2019Q1 2018Q1 2019Q1 Occupancy rate (as a percentage) Total hotels in operation 2,354 2,829 Leased-and-owned hotels 60.5% 59.6% Leased and owned hotels 26 30 Franchised hotels 79.6% 78.4% Blended 79.2% 78.1% Franchised hotels 2,328 2,799 Average daily rate (in RMB) Leas
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