GreenTree Hospitality Group Ltd. · NYSE:GHG

GreenTree Hospitality — Q2 2020 Earnings Presentation

28 slides from GreenTree Hospitality's earnings presentation, Aug 13, 2020

  1. Slide 1: 2020 Q2 Results

    2020 Q2 Results August 13, 2020

  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: Contents

    Contents 01 02 03 04 Performance COVID-19 Operating and Appendix Review Financial Highlights 3

  4. Slide 4: Performance Review

    GreenTree Eastern Hotel (Suzhou Yinshan Lake Guoyuan Road Subway Station Hotel) 01 Performance Review

  5. Slide 5: Overview of 2020Q2

    Overview of 2020Q2 As of June 30, 2020 Number of Hotels ADR Financial Overview In 343 cities RMB RMB (M) 4,066 172 216.0 2,955 142 200 -21.4% 150 121.1 100 93.7 91.4 19Q2 20Q2 19Q2 20Q2 -38.2% -26.3% -47.2% Occupancy RevPAR 50 20.4% RMB 81.1% 139 0 (1) Total Revenue Gross Profit Net Income Adjusted

  6. Slide 6: COVID-19 Update

    Argyle Grand Hotel in Nanping Fujian Province 02 COVID-19 Update

  7. Slide 7: ADR, Occupancy and RevPAR YoY: Hotels in China vs GreenTree

    Hotels in China (1) GreenTree ADR 2020Q2 YoY Occupancy 2020Q2 YoY RevPAR 2020Q2 YoY 5% 5% 5% 0% 0% 20Q1 20Q1 20Q2 20Q2 20Q1 20Q1 20Q2 20Q2 20Q1 20Q1 20Q2 20Q2 -5% -5% -5% -15% -7.8% -10% -10% -15% -25% -15% -20% -17.7% -35% -17.6% -17.4% -35.4% -20% -25% -24.7% -45% -44.1% -25% -30% -55% -30.8% -54.

  8. Slide 8: Daily Occupancy Trend

    100% 90% 80% 70% 60% 50% 40% 38.5% 30% 20% 23.2% 21.5% 10% 0% 1/1 1/11 1/21 1/31 2/10 2/20 3/1 3/11 3/21 3/31 4/10 4/20 4/30 5/10 5/20 5/30 6/9 6/19 6/29 7/9 7/19 7/29 8

  9. Slide 9: Operating and Financial Highlights

    Urban Garden Hotel (Suzhou North High Speed Railway Station Hotel) 03 Operating and Financial Highlights 9

  10. Slide 10: Hotel Growth

    Hotel Growth Increasing Number of Hotels in Operation F&M Hotels L&O Hotels 4,066 3,957 4,000 35 34 3,500 2,955 3,000 2,757 30 2,500 2,289 29 2,000 1,964 26 32 1,500 1,932 2,263 2,728 3,923 2,925 4,031 1,000 2016 2017 2018 2019 2019Q2 2020Q2 % by Hotel Segment % by City Tier (1) Luxury Mid-to-upscal

  11. Slide 11: New Hotel Openings and Closures

    New Hotel Openings and Closures 20Q2 New Openings New Hotel Openings and Closures Breakdown by Market Segment Mid-to-Up-Scale 28 25.2% Mid-Scale 190 50 Luxury 0.9% 1 Gross Openings 45.1% YoY -17.2% 140 28.8% Economy 32 190 90 181 20Q2 New Openings 134 Breakdown by City Tier (1) 111 102 40 Tier 2 Cit

  12. Slide 12: Pipeline Growth

    Pipeline Growth 20Q2 Pipeline Growth by Market Segment Luxury Mid-to-Up-Scale Mid-Scale Economy YOY +82.4% 1,087 1,025 54 1,000 56 949 25% 54 215 25% 200 25% 181 652 596 47 39% 439 40% 47 27% 403 128 364 500 28% 38% 117 272 42% 249 42% 366 36% 379 35% 350 37% 205 31% 183 30% 0 19Q2 19Q3 19Q4 20Q1 20

  13. Slide 13: Strategic Development

    Strategic Development Further Expansion into Mid-to-Upscale and Luxury Brands Gem Hotel GreenTree Eastern ● Calm sanctuary for business travelers ● Premium boutique hotels with ● 32 hotels as of 20Q2 traditional oriental themes ● Pipeline: 30 ● 118 hotels as of 20Q2 ● Rate: RMB 280-350 ● Pipeline: 6

  14. Slide 14: Hotel Performance 2020Q2

    Hotel Performance 2020Q2 The Company had a 35.4% RevPAR YoY decrease to RMB90 in 20Q2. Excluding Argyle and Urban, the Company's RevPAR was RMB95, representing a decrease of 31.5%. F&M Hotels L&O Hotels ADR Occupancy RevPAR RMB RMB 216 84% 83% 201 81% 152 182 72% 142 173 71% 71% 139 171 135 163 64%

  15. Slide 15: RevPAR Growth

    RevPAR Growth Quarterly RevPAR RMB 164 152 152 150 145 142 137 149 135 135 145 131 139 139 135 131 132 133 129 129 124 127 124 123 110 117 119 117 119 115 111 108 100 92 90 80 70 71 55 30 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 F&M Hotel L&O Hotel 线性

  16. Slide 16: Membership Program

    Membership Program 93.7% of room nights sold directly Individual Members Corporate Members MM ‘000 50 49 1,560 1,510 1,520 46 44 1,500 1,450 1,380 40 39 36 1,200 30 900 20 10 600 19Q2 19Q3 19Q4 20Q1 20Q2 19Q2 19Q3 19Q4 20Q1 20Q2 16

  17. Slide 17: Revenue Growth

    Revenue Growth Total Revenue Revenue from F&M Hotels RMB (M) RMB (M) 397.9 510.2 400 500 289.2 300 214.4 200 165.7 400 100 373.4 0 19Q2 20Q2 19H1 20H1 300 274.9 Revenue from L&O Hotels RMB (M) 216.0 200 112.3 100 84.1 75 60.5 100 50.3 50 25 0 0 19Q2 20Q2 19H1 20H1 19Q2 20Q2 19H1 20H1 17

  18. Slide 18: Total Hotel Operating Costs and Expenses: 20Q2 vs 19Q2

    Total Hotel Operating Costs and Expenses——20Q2 VS 19Q2 Total Hotel Operating Costs and Expenses (1) Hotel Operating Costs RMB (M) % of Revenue RMB (M) % of Revenue 100 94.9 155.1 150 78.9 43.9% 71.8% 28.7% 135.1 77.5 72.7 49.1% 50 Excluding acquired entities 28.6% 36.8% 0 19Q2 20Q2 100 Selling and M

  19. Slide 19: Total Hotel Operating Costs and Expenses: 20H1 vs 19H1

    Total Hotel Operating Costs and Expenses——20H1 VS 19H1 Total Hotel Operating Costs and Expenses (1) Hotel Operating Costs RMB (M) % of Revenue RMB (M) % of Revenue 200 184.7 300 292.6 158.9 49.5% 78.4% 150 31.2% 157.5 149.6 265.6 100 52.1% Excluding 250 50 acquired entities 31.1% 44.4% 0 19H1 20H1 2

  20. Slide 20: Profitability

    Profitability Gross Profit and Margin Net Income and Margin RMB (M) % Margin RMB (M) % Margin 390 390 351.3 360 360 330 330 300 300 270 261.1 270 240 240 210 196.0 210 188.7 180 180 150 150 127.1 121.1 120 120 93.7 90 90 79.6 60 60 30 30 71.3% 56.1% 68.8% 50.5% 46.2% 43.4% 51.2% 21.3% 0 0 19Q2 20Q2

  21. Slide 21: Profitability

    Profitability Adjusted EBITDA (1) and Margin Core Net Income (2) and Margin RMB (M) % Margin RMB (M) % Margin 307.0 300 300 250 250 217.1 200 200 173.1 150 138.9 150 124.8 100 91.4 100 93.7 74.6 50 50 63.0% 42.3% 60.2% 37.2% 45.4% 34.6% 42.5% 25.1% 0 0 19Q2 20Q2 19H1 20H1 19Q2 20Q2 19H1 20H1 Notes:

  22. Slide 22: Profitability

    Profitability Net Income per ADS (Basic and Diluted) Core Net Income per ADS (Basic and Diluted) (Non-GAAP) (1) RMB RMB 3.0 3.0 2.59 2.5 2.5 2.11 2.0 2.0 1.5 1.5 1.26 1.23 1.01 1.0 0.90 1.0 0.91 0.72 0.5 0.5 0.0 0.0 19Q2 20Q2 19H1 20H1 19Q2 20Q2 19H1 20H1 Note: 1. Core net income is calculated as ne

  23. Slide 23: Cash and Cash Equivalents

    Cash and Cash Equivalents Total cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposits of RMB1,714.0 million as of June 30, 2020. RMB (M) 2.2 -18.5 41.8 -27.9 1,700 44.2 58.3 1,714.0 1,613.9 1,200 (1) Cash & Cash Cash from operating Cha

  24. Slide 24: Guidance; Thank you! Q&A

    Guidance Total revenues for the full year of 2020 are expected to decline 10%~15% from 2019. Thank you! Q&A 24

  25. Slide 25: Appendix

    04 Appendix 25

  26. Slide 26: Our Portfolio

    Our Portfolio As of June 30, 2020 Luxury • Hotels in operation:21 • Hotel rooms in operation:4,388 • Room rates:RMB 400 - 1,000 Mid-to-upscale • Hotels in operation:296 • Hotel rooms in operation:26,682 • Room rates:RMB 200 - 600 [3] Mid-scale • Hotels in operation:2,610 [4] • Hotel rooms in operati

  27. Slide 27: Hotel Breakdown

    Hotel Breakdown By Market Segment and Brand Number of Hotels in Operation Number of Hotel Rooms in Operation 2019Q2 2020Q2 2019Q2 2020Q2 Luxury 19 21 4,017 4,388 Argyle 19 21 4,017 4,388 Mid-to-up-scale 152 296 15,357 26,682 GreenTree Eastern 96 118 10,200 12,509 Deep Sleep Hotel 1 2 62 161 Gem 18 3

  28. Slide 28: Operating Data

    Operating Data 2019Q2 2020Q2 2019Q2 2020Q2 Occupancy rate Total hotels in operation 2,955 4,066 Leased-and-owned hotels 70.5% 46.5% Leased and owned hotels 30 35 Franchised hotels 81.3% 63.7% Blended 81.1% 63.4% Franchised hotels 2,925 4,031 Average daily rate (in RMB) Leased-and-owned hotels 216 17

GreenTree Hospitality Group — Q2 2020 Earnings Presentation on 6ix