GreenTree Hospitality Group Ltd. · NYSE:GHG

GreenTree Hospitality — H1 2023 Earnings Presentation

36 slides from GreenTree Hospitality's earnings presentation, Sep 19, 2023

  1. Slide 1: First Half 2023 Results

    First Half 2023 Results September 19, 2023 1

  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 First Half 2023 First Half 2023 First Half 2023 Appendix Performance Review Strategic Execution： Operating and Hotel Business and Financial Highlights: Restaurant Business Hotel Business and Restaurant Business 3

  4. Slide 4: First Half 2023 Performance Review

    Vx Hotel (High-speed Railway Station, Dongfang City, Hainan Province) 01 First Half 2023 Performance Review 4

  5. Slide 5: First Half 2023 (H1) Highlights

    First Half 2023 (H1) Highlights RMB Compared with 2022 H1(1) RevPAR 130 Up 35.8% ADS( Average Daily 6,213 Up 22.9% Sales Per Store) Total Revenues 794.2MM Up 12.1% Income from Operations 150.9MM Turn positive with margin 19.0% Net Income 177.3MM Turn positive with margin 22.3% Adjusted EBITDA 226.9M

  6. Slide 6: Overview of 2023H1

    Overview of 2023H1 Total Revenues Income from Operations Hotel Hotel RMB (M) RMB (M) Restaurant Restaurant 1000 300 800 （9.0） 100 232.1 160.4 600 251.5 22H1 23H1 -100 563.2 400 457.4 (457.7) -300 200 (16.1) 0 -500 22H1 23H1 Net Income Adjusted EBITDA Hotel Hotel RMB (M) Restaurant Restaurant 300 300

  7. Slide 7: ADR, Occupancy, RevPAR

    ADR Occupancy RevPAR RMB RMB 150 141 200 181 100% 163 170 168 165 167 77.8% 118 117 120 120 153 147 72.4% 71.1% 69.2% 71.7% 104 63.0% 92 91 60.0%62.2% 100 100 50% 50 0 0% 0 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 (1) 130

  8. Slide 8: Restaurant AC, ADT and ADS

    AC (1) ADT (2) ADS (3) RMB RMB 7,000 6,594 6,255 60 55.2 160 6,096 6,080 6,371 53.1 142 138 6,027 55 51.9 52.0 140 6,000 130 50 46.6 45.2 46.2 46.2 117 120 5,000 4,564 120 110 4,051 45 99 4,000 40 100 3,000 35 78 80 2,000 30 60 1,000 25 20 40 0 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 21Q3 21Q4 22Q1

  9. Slide 9: First Half 2023 Strategic Execution

    Vx Hotel (High-speed Railway Station, Dongfang City, Hainan Province) 02 First Half 2023 Strategic Execution 9

  10. Slide 10: 2023H1 Hotel Strategic Execution

    2023H1 Hotel Strategic Execution Further Expansion into Mid-to- Upscale Segment Greater Penetration in Tier 3 and Lower Cities in South China L&O Hotels Openings 10

  11. Slide 11: Further Expansion into Mid-to-Upscale Segment

    Further Expansion into Mid-to-UpScale Segment Organic New Openings (1) Breakdown by Segment 800 Mid-to-Upscale Midscale Economy 618 600 548 466 24.6% 26.2% 13.9% 18.5% 400 49.8% 295 14.6% 14.6% 63.3% 65.0% Organic Pipeline (3) Breakdown by Segment 200 64.4% 183 15.3% 36.3% 51.9% Mid-to-Upscale Midsc

  12. Slide 12: Greater Penetration in Tier 3 and Lower Cities

    Greater Penetration in Tier 3 and Lower Cities Organic New Openings Breakdown by City Tier Organic Hotel Breakdown by City Tier Tier 1 Cities Tier 2 Cities Other Cities (1) Tier 1 Cities Tier 2 Cities Other Cities 618 4,108 548 4,500 4,059 600 7.1% 3,859 466 10.1% 3,555 10.1% 9.7% 7.1% 27.0% 10.2% 3

  13. Slide 13: L&O Hotels Openings

    L&O Hotels Openings ➢ 3 new L&O hotels opened in 2023H1 • All mid-to-up-scale hotels in transportation hub and high-technology zone of major cities GreenTree Eastern Hotel (Huaqiang GreenTree Eastern Hotel (Chongqing North, Futian District., Shenzhen ) Jiangbei International Airport) GreenTree Easte

  14. Slide 14: 2023H1 Restaurant Strategic Execution

    2023H1 Restaurant Strategic Execution Closure of Unprofitable Stores to Ensure Restaurant Business Profitability Increase in Proportion of Franchised-and-managed Restaurants Expanding Number of Street Stores 14

  15. Slide 15: Closure of Unprofitable Stores to Ensure Restaurant Profitability

    Closure of Unprofitable Stores to Ensure Restaurant Business Profitability Close unprofitable L&O stores 500 L&O F&M 402 400 347 342 314 300 271 280 189 260 146 218 130 200 104 100 55 71 125 130 134 114 0 2019 2020 2021 2022 2022H1 2023H1 Number of Restaurants Closure 140 129 120 104 100 80 74 64 58

  16. Slide 16: Increase in Proportion of Franchised-and-managed Restaurants

    Increase in Proportion of Franchised-and-managed Restaurants New Openings Breakdown Restaurants Breakdown 70 L&O Restaurants F&M Restaurants 450 L&O Restaurants F&M Restaurants 10.7% 10.5% 400 60 350 50 12 300 40 250 6 26.2% 347 189 62 26.2% 200 271 150 30 104 150 20 42 35 100 10 - 2 125 130 50 114

  17. Slide 17: Expanding Number of Street Stores

    Expanding Number of Street Stores Restaurants Breakdown by Location Proportion of Restaurants Breakdown by Location 450 Street stores Transportation Hub Stores Shopping Mall Stores Street stores Transportation Hub Stores Shopping Mall Stores 10.5% 10.7% 400 3 100.0% 0.7% 3.8% 53 13.2% 350 12.6% 18.8

  18. Slide 18: Operating and Financial Highlights

    Vx Hotel (High-speed Railway Station, Dongfang City, Hainan Province) 03 Operating and Financial Highlights 18

  19. Slide 19: Hotel Performance

    Hotel Performance 2023H1 RevPAR 190 RMB 164 160 170 152 152 146 149 131 145 142 144 124 131 135 137 135 135 136 130 123 119 124 127 121 124 130 115 145 149 105 139 139 96 139 129 129 135 132 133 90 133 117 120 124 117 117 119 119 90 111 108 117 119 71 92 100 103 95 91 90 80 50 16Q1 16Q2 16Q3 16Q4 17

  20. Slide 20: Improvement in Direct Sales and Membership Support

    Improvement in Direct Sales and Membership Support Corporate Members Individual Members ‘000 CAGR +6.2% ‘000‘000 CAGR +16.4% 1,985 2,000 1,905 100 1,760 84 74 80 1,500 62 60 1,000 40 500 20 0 0 21Q2 22Q2 23Q2 21Q2 22Q2 23Q2 20

  21. Slide 21: Restaurants Overview of 2023H1

    Restaurants Overview of 2023H1 Number of Individual Members AC ‘000 RMB 2,611 2,670 53.0 2,527 52.0 48.0 21Q2 22Q2 23Q2 21Q2 22Q2 23Q2 ADT ADS 137 RMB 120 6,565 6,371 78 4,051 21Q2 22Q2 23Q2 21Q2 22Q2 23Q2 21

  22. Slide 22: Hotel Revenue Growth

    Hotel Revenue Growth Total Revenue Revenue from F&M Hotels RMB (M) RMB (M) 700 500 400 347.4 600 300 275.5 563.2 200 169.5 177.9 500 457.4 100 0 400 22H1 23H1 23Q1 23Q2 Revenue from L&O Hotels 310.6 300 RMB (M) 252.6 250 200 213.6 200 171.3 150 131.5 100 100 82.1 50 0 22H1 23H1 23Q1 23Q2 0 22H1 23H1

  23. Slide 23: Hotel Operating Costs and Expenses

    Hotel Operating Costs and Expenses Hotel Operating Costs (2) Total Hotel Operating Costs and Expenses (1) RMB (M) RMB (M) Other General Expenses 400 307.8 284.4 300 1000 919.0 200 150.1 238.7 134.2 900 100 800 0 22H1 23H1 23Q1 23Q2 Selling and Marketing Expenses 700 490.6 RMB (M) 30 600 24.8 25 18.9

  24. Slide 24: Hotel Profitability

    Hotel Profitability Income from Operations Net Income RMB (M) % Margin RMB (M) % Margin 250 250 191.8 160.4 150 108.5 150 135.1 50 51.9 50 56.7 (50) 22H1 23H1 23Q1 23Q2 (50) 22H1 23H1 23Q1 23Q2 (150) (150) (250) (250) (350) (450) (350) (457.7) (360.9) (550) (450) -100.1% 28.5% 20.6% 34.9% -78.9% 34.

  25. Slide 25: Restaurant Revenue Growth

    Restaurant Revenue Growth Total Revenue Revenue from F&M Restaurants RMB (M) RMB (M) 200 15 13.3 10.6 10 9.0 8.3 7.6 7.7 149.5 147.7 150 5 127.2 112.4 0 104.9 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 102.0 100 Revenue from L&O Restaurants RMB (M) 150 50 102.8 105.3 100 89.4 70.6 79.0 68.2 50 0 22Q1 22Q2 22Q3 2

  26. Slide 26: Restaurant Operating Costs and Expenses

    Restaurant Operating Costs and Expenses Material cost Total Restaurant Operating Costs and Expenses RMB (M) RMB (M) 100 80 71.3 67.7 300 60 268.7 40 35.3 32.4 238.7 20 250 242.0 0 22H1 23H1 23Q1 23Q2 Personnel cost 200 RMB (M) 100 80 150 60 48.3 43.7 127.2 40 114.9 22.1 21.6 20 100 0 22H1 23H1 23Q1

  27. Slide 27: Restaurant Profitability

    Restaurant Profitability Income from Operations Net Income RMB (M) % Margin RMB (M) % Margin 5 5 0.6 0 (2.2) 22H1 23H1 23Q1 23Q2 22H1 23H1 23Q1 23Q2 (5) (5) (10) (9.0) (9.6) (15) (11.9) (15) (14.1) (20) (16.1) (25) (23.2) (25) (30) -6.4% -3.9% 0.5% -9.1% -9.2% -6.1% -1.7% -11.3% Adjusted EBITDA (1)

  28. Slide 28: Profitability

    Profitability Net Income per ADS (Basic and Diluted) (1) Core Net Income per ADS (Basic and Diluted) (Non-GAAP) (2) RMB RMB 1.50 3.00 1.33 2.00 1.79 1.00 1.00 0.00 0.80 22H1 23H1 -1.00 0.50 -2.00 -3.00 (3.38) 0.00 -4.00 22H1 23H1 Notes: 1. EPS, Earnings per ADS (basic and diluted) was calculated as

  29. Slide 29: 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 RMB 1,440.1Million as of June 30, 2023 RMB (M) 2.0 -3.1 37.8 65.6 1,500 313.1 -37.4 -57.4 1,000 1,440.1 1,119.4 500 0 (1) Cash & Cash Cash from Op

  30. Slide 30: Guidance; Thank you! Q&A

    Guidance • Total revenues of organic hotels for the full year of 2023 are expected to grow 30%-35% of the 2022 levels. • Total revenues for our restaurant business and our organic hotel business, for the full year of 2023 are expected to grow 15%-20% over the 2022 levels. Thank you! Q&A 30

  31. Slide 31: Appendix

    Vx Hotel (High-speed Railway Station, Dongfang City, Hainan Province) 04 Appendix 31

  32. Slide 32: Our Portfolio

    Our Portfolio As of June 30, 2023 Mid-to-Up-Scale • Hotels in operation: 438 • Hotel rooms in operation: 42,338 • Room rates: RMB 200 - 600 Mid-Scale [3] • Hotels in operation: 2,933 • Hotel rooms in operation: 229,270 • Room rates: RMB 150 - 400 [4] Economy • Hotels in operation: 737 • Hotel rooms

  33. Slide 33: Hotel Breakdown

    Hotel Breakdown Number of Hotels in Operation Number of Hotel Rooms in Operation By Market Segment and Brand 2022Q2 2023Q2 2022Q2 2023Q2 Mid-to-up-scale 528 438 47,347 42,338 GreenTree Eastern 201 217 22,402 23,205 Deep Sleep Hotel 7 7 467 534 Gem 52 54 4,728 4,873 Gya 66 70 5,639 5,904 Vx 81 90 7,0

  34. Slide 34: Hotel Operating Data

    Hotel Operating Data 2022Q2 2023Q2 2023Q1 2023Q2 Occupancy rate Total hotels in operation 4,669 4,108 Leased-and-owned hotels 62.9% 74.6% Leased-and-owned hotels 67 65 Franchised hotels 71.9% 77.9% Blended 71.7% 77.8% Franchised hotels 4,602 4,043 Average daily rate (in RMB) Leased-and-owned hotels

  35. Slide 35: Restaurants Operating Data

    Restaurants Operating Data 2022Q2 2023Q2 2023Q1 2023Q2 Total restaurants in ADT 280 218 operation Dine In 62 63 Leased-and-owned 146 104 Delivery 48 57 restaurants Blended 110 120 Franchised restaurants 134 114 AC (in RMB) Dine In 67 67 Number of cities 81 66 Delivery 40 38 Blended 55 53 ADS (in RMB

  36. Slide 36: Restaurants Operating Data

    Restaurants Operating Data 2023Q1 2023Q2 ADT Leased-and-owned restaurants 143 142 Franchised restaurants 81 86 Blended 110 120 AC (in RMB) Leased-and-owned restaurants 61 61 Franchised restaurants 46 46 Blended 55 53 ADS (in RMB) Leased-and-owned restaurants 8,716 8,657 Franchised restaurants 3,745

GreenTree Hospitality Group — H1 2023 Earnings Presentation on 6ix