GreenTree Hospitality Group Ltd. · NYSE:GHG

GreenTree Hospitality — Q4 2018 Earnings Presentation

24 slides from GreenTree Hospitality's earnings presentation, Mar 14, 2019

  1. Slide 1: GreenTree Hospitality Group 2018 Q4 and Full Year Results Presentation

    Comfort Quality Value Convenience V3 * GreenTree Hospitality Group Ltd. 2018 Q4 and Full Year Results Presentation | March 14, 2019 Notes: * currently being registered as trademark in PRC

  2. 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

  3. Slide 3: Agenda

    Agenda 1 Business and Strategy Review 4 2 Operational and Financial Highlights 12 3 Appendix: Hotel Performance 21 3

  4. Slide 4: 1. Business and Strategy Review

    1. Business and Strategy Review 4

  5. Slide 5: Q4 and Full Year 2018 Performance Overview

    Q4 and Full Year 2018 Performance Overview As of December 31, 2018 2,757 Hotels 224 New Hotel Openings for Q4 98.9% F&M Hotels(1) 221,529 Rooms 554 New Hotel Openings for Full Year 77.3% Revenue Contribution from F&M Hotels for Q4 430 Hotels Contracted for or under Development +20.8% YoY to RMB250MM

  6. Slide 6: 2018 and 2019Q1 Important Events

    2018 and 2019Q1 Important Events 1 2 3 2018 Q3 2018 Q3 2018 Added Wumian Hotel Started to explore The Company’s App was ranked 2nd in terms of user to our portfolio. ways to grow service activity on the “Intelligent Mobile Observatory” in apartment business hotel sector, a famous mobile big data que

  7. 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 ~77.3% of Total Revenue for 2018 Q4 ~77.4% of Total Revenue for 2018 % of F&M hotels Revenue, % 100 100 23 22 22 23 23 25 98.9 98.9 29 98.9 98.9 98.8 99 80 98.4 98 60 97.6 97 40 77 78 78 77 7

  8. Slide 8: Fast-Growing Loyal Membership Base

    Fast-Growing Loyal Membership Base 94.5% of rooms nights sold through direct sales in 2018 Q4 95.0% of rooms nights sold through direct sales in 2018 Robust Membership Growth Increase in Corporate Members MM ‘000 30 1,270 29 1,250 25 1,000 21 820 20 750 15 500 Dec 31, 2017 Dec 31, 2018 Dec 31, 2017

  9. Slide 9: Consistently Healthy RevPAR Growth

    Consistently Healthy RevPAR Growth Quarterly RevPAR RMB 152 145 137 150 142 131 131 135 124 123 124 145 115 119 139 135 117 129 132 111 108 100 129 117 100 92 50 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 F&M L&O RevPAR YoY Growth for L&O Hotels RevPAR YoY Growth for F&M Hotels RMB

  10. Slide 10: Continued to Build up Hotel Pipeline to Fuel Accelerated Growth

    Continued to Build up Hotel Pipeline to Fuel Accelerated Growth Business to Mid-to-up-scale and Economy Segments Strengthening Hotel Pipeline Fuel Stronger Growth and a More Diversified Portfolio Number of hotels contracted for or under development GreenTree Eastern, Gme, Gya Vatica and Shell & VX 5

  11. 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

  12. Slide 12: 2. Operational and Financial Highlights

    2. Operational and Financial Highlights 12

  13. Slide 13: Rapid Growth with Low Hotel Closure Rate

    Rapid Growth with Low Hotel Closure Rate Increasing Number of Hotels in Operation Hotel Openings / Closures Number of hotels 500 2,757 29 400 330 300 205 254 2,500 2,289 200 26 100 196 224 224 Opened in Opened in 171 Opened in 146 Q4 2017 80 104 Q4 2016 Q4 2018 1,964 0 2,000 32 (88) (100) (86) (15)

  14. 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 2.3% RevPAR increase from the same quarter of 2017 ADR Occupancy RevPAR RMB % RMB 250 100 150 212 135 137 82 132 80 81 129 200 193 80 123 120 70 166 108 163 65 65 158 153 150 60 90 100 40 60 50 20 30

  15. Slide 15: 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 3.8% RevPAR YoY growth for full year. ADR Occupancy RevPAR RMB % RMB 250 100 150 139 83 82 134 205 81 129 131 200 80 123 186 120 70 68 109 164 163 66 156 152 150 60 90 100 40 60 50 20 30 0 0 0 2016 2

  16. Slide 16: Robust Revenue Growth

    Robust Revenue Growth Total Revenue Revenue from F&M Hotels RMB MM RMB MM 800 732 1,000 945 584 600 400 800 778 193 200 153 0 600 2017Q4 2018Q4 2017 Full Year 2018 Full Year Revenue from L&O Hotels RMB MM 300 400 213 194 250 200 207 200 100 54 57 0 0 2017Q4 2018Q4 2017 Full Year 2018 Full Year 2017Q

  17. Slide 17: Effective Cost Structure

    Effective Cost Structure Total Operating Costs and Expenses(1) Hotel Operating Costs RMB MM % of Revenue RMB MM % of Revenue 30.0% 29.7% 400 30% 700 70% 29.7% 281 28.6% 234 200 600 60% 74 59 50.7% 52.3% 0 0% 2017Q4 2018Q4 2017 Full Year 2018 Full Year 500 50% Selling and Marketing Expense 47.3% 45.8

  18. Slide 18: Strong and Improving Profitability

    Strong and Improving Profitability Gross Profit and Margin Adjusted EBITDA and Margin(1) Core Net Income(2)/Net Income and Margin(3) RMB MM % RMB MM % RMB MM % 100% 1000 100% 1000 900 60% 80% 80% 800 800 47.1% 46.4% 43.4% 70.0% 42.0% 41.7% 71.4% 70.3% 64.5% 41.5% 70.3% 664 64.1% 60.0% 610 600 40% 60

  19. Slide 19: Abundant Cash to Support Capital Investments and Acquisitions

    Abundant Cash to Support Capital Investments and Acquisitions Strong Earnings and the IPO Proceeds Provide Resources for Future Business Expansion RMB MM Total cash and cash equivalents, restricted cash, short-term investments and securities of RMB2,261MM as of Dec 31, 2018 2,500 （39） （144） 2,000 80

  20. Slide 20: 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 20

  21. Slide 21: Appendix: Hotel Performance

    Appendix: Hotel Performance 21

  22. Slide 22: Our Diverse Hotel Brands

    Our Diverse Hotel Brands We have established a full product suite to capture a wide spectrum of market opportunities Year Hotels Hotel Rooms Our Brands Price (RMB) Founded in Operation in Operation Business to Mid-to-up-scale 300–600 2012 87 9,487 (1) 280–350 2017 21 1,873 Mid-Scale 180–400 2004 1,8

  23. Slide 23: Hotel Breakdown by Segment

    Hotel Breakdown by Segment Number of Hotels in Operation Number of Hotel Rooms in Operation 2017 2018 2017 2018 Economy hotels 257 465 14,060 23,656 Vatica 104 117 7,704 8,674 Shell 153 348 6,356 14,982 Mid-scale 1,982 2,184 171,041 186,513 GreenTree Inn 1,733 1,881 151,154 162,844 GT Alliance 249 3

  24. Slide 24: Hotel Operational Data

    Hotel Operational Data 2017 2018 2017Q4 2018Q4 2017 2018 Occupancy rate (as a percentage) Total hotels in operation 2,289 2,757 Leased-and-owned hotels 70.2% 64.5% 70.3% 68.0% Leased and owned hotels 29 Franchised hotels 81.6% 80.7% 82.9% 82.3% 26 Blended 81.4% 80.4% 82.6% 82.1% Franchised hotels 2,

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