- Total revenues increased 16.3% year-over-year to RMB310.4 million (US$48.2 million).
- Income from operations decreased 45.6% year-over-year to RMB54.9 million (US$8.5 million) .
- Adjusted EBITDA (non-GAAP) [2] decreased 33.5% year-over-year to RMB73.7 million (US$11.4 million) .
- Core net income (non-GAAP) [3] decreased 45.7% year-over-year to RMB50.2 million (US$7.8 million) .
Third Quarter of 2021 Operational Highlights
- A total of 4,626 hotels with 334,162 hotel rooms were in operation as of September 30, 2021, compared to 4,542 hotels and 328,773 hotel rooms as of June 30, 2021
- As of September 30, 2021, the Company had 62 leased-and-operated ("L&O") hotels and 4,564 franchised-and-managed ("F&M") hotels in operation in 362 cities across China, compared to 37 L&O hotels and 4,158 F&M hotels in operation in 341 cities as of September 30, 2020. The geographic coverage increased by 6.2% year over year.
- During the quarter, the Company opened 182 hotels, an increase of 20 compared to 162 hotels in the third quarter of 2020. Two of those hotels were in the luxury segment, 70 in the mid-to-up-scale segment, 83 in the mid-scale segment, and 27 in the economy segment. Geographically speaking, 12 hotels were in Tier 1 cities [3], 52 in Tier 2 cities and the remaining 118 in Tier 3 and lower cities in China.
- As of September 30, 2021, the Company had a pipeline of 1,207 hotels contracted for or under development, of which 57 hotels were in the luxury hotel segment, 337 in the mid-to-up-scale segment, 465 in the mid-scale segment, and 348 in the economy segment.
- The average daily room rate, or ADR, for all hotels in operation was RMB 163, an increase of 7.7% from RMB151 in the third quarter of 2020, and a 6.2% decrease compared with RMB174 in the pre-COVID-19 third quarter of 2019.
- The occupancy rate, or OCC for all hotels in operation was 72.4%, a decrease of 6.7% compared with 79.1% in the third quarter of 2020, and a 13.5% decrease compared with 85.9% in the pre-COVID-19 third quarter of 2019.
- The revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR by its occupancy rate, was RMB 118, a 1.4% year-over-year decrease, and a 20.9% decrease compared with RMB149 in the pre-COVID-19 third quarter of 2019.
- As of September 30, 2021 the Company's loyalty program had more than 66 million individual members and more than 1,810,000 corporate members, compared to over 62 million individual members and approximately 1,760,000 corporate members respectively as of June 30, 2021. The Company sold approximately 91.3% of room nights directly during the third quarter of 2021.
"Despite the unprecedented challenges brought upon us by resurgences of COVID-19 cases in various parts of China, the company delivered satisfactory quarterly results as the impact on our occupancy and RevPAR has been less severe than at the average of other hotels in China," said Mr. Alex Xu, Chair and Chief Executive Officer of GreenTree. "This has been an extraordinarily tough period, but it is one that has been shared across the industry. As for ourselves, we feel certain that we will get through the current pandemic wave given the resilience of our business model and the experience that our team and franchisees have accumulated while combatting Covid-19. Going forward, we will further optimize our management and operating systems, including design and technology features, and sales and marketing programs to improve hotel quality and operating performance. Once again, I am extremely grateful for the support and dedication of our employees, franchisees, guests, and shareholders as we continue to navigate uncertain times."
| [1] The conversion of Renminbi ("RMB")into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.4434 on September 30, 2021 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20211004/ |
| [2] Adjusted EBITDA (non-GAAP) is calculated as net income plus other operating expenses, income tax expense, interest expense, depreciation and amortization, losses from investment in equity securities, but excludes other operating income, interest income and other, net, gains from investment in equity securities, share of gains in equity investees (net of tax), and other income, net. The calculation of Adjusted EBITDA (non-GAAP) included in this report has been aligned according to the abovementioned definition. |
| [3] Core net income is calculated as net income plus share-based compensation, losses from investments in equity securities (net of 25% tax), one-time fees and expense, asset impairment/accrued bad debt and income tax expenses related to dividend distribution but excludes government subsidies (net of 25% tax), gains from investment in equity securities (net of 25% tax), and other income (net of 25% tax). |
| [4] Tier 1 Cities refers to Beijing, Shanghai, Shenzhen and Guangzhou; Tier 2 Cities refers to the 32 major cities, other than Tier 1 Cities, including provincial capitals, administrative capitals of autonomous regions, direct-controlled municipalities and other major cities designated as municipalities with independent planning by the State Council. |
Third Quarter 2021 Financial Results
| Quarter Ended | |||||
| September 30, 2020 | September 30, 2021 | September 30, 2021 | |||
| RMB | RMB | US$ | |||
| Revenues | |||||
| Leased-and-operated hotels | 66,823,544 | 106,518,761 | 16,531,452 | ||
| Franchised-and-managed hotels | 194,060,899 | 194,002,860 | 30,108,772 | ||
| others | 5,983,132 | 9,922,553 | 1,539,956 | ||
| Total revenues | 266,867,575 | 310,444,174 | 48,180,180 | ||
| Nine Months Ended | |||||
| September 30, 2020 | September 30, 2021 | September 30, 2021 | |||
| RMB | RMB | US$ | |||
| Revenues | |||||
| Leased-and-operated hotels | 150,961,027 | 279,514,243 | 43,379,930 | ||
| Franchised-and-managed hotels | 470,258,096 | 589,609,423 | 91,505,948 | ||
| others | 19,034,407 | 29,589,847 | 4,592,272 | ||
| Total revenues | 640,253,530 | 898,713,513 | 139,478,150 | ||
Total revenues were RMB310.4 million (US$48.2 million) [1], a 16.3% year-over-year increase. The increase was primarily due to our newly opened L&O hotels. Compared with the pre-COVID-19 third quarter of 2019, total revenues increased by 6.3%. Total revenues for the first nine months of 2021 were RMB 898.7 million (US$139.5 million) [1], representing a 40.4% year-over-year increase.
Total revenues from leased-and-operated hotels were RMB106.5 million (US$16.5 million) [1], a 59.4% year-over-year increase. The increase was primarily due to the 20.7% year-over-year increase in L&O hotels' RevPAR and revenues from the 24 L&O hotels opened since the beginning of 2021. This revenue increase was partially offset by the closure of 2 L&O hotels over the same period. Total revenues from L&O hotels for the nine months of 2021 were RMB279.5 million (US$43.4 million) [1], an 85.2% year-over-year increase.
Total revenues from franchised-and-managed hotels were RMB194.0 million (US$30.1 million) [1], almost the same as in the same quarter last year. Initial franchise fees increased by 17.8% year-over-year, mainly attributable to the gross opening of 181 F&M hotels and the closure of 96 F&M hotels. Recurring franchisee management fees and others decreased 1.7% year-over-year primarily due to the 2.2% decrease in RevPAR and offset by the 9.8% increase in the number of F&M hotels. Total revenues from F&M hotels for the first nine months of 2021 were RMB589.6 million (US$91.5 million) [1], representing a 25.4% year-over-year increase.
| Quarter Ended | |||||
| September 30, 2020 | September 30, 2021 | September 30, 2021 | |||
| RMB | RMB | US$ | |||
| Initial franchise fee | 16,619,577 | 19,579,815 | 3,038,740 | ||
| Recurring franchise management fee and others | 177,441,322 | 174,423,045 | 27,070,032 | ||
| Revenues from franchised- and-managed hotels | 194,060,899 | 194,002,860 | 30,108,772 | ||
| Nine Months Ended | |||||
| September 30, 2020 | September 30, 2021 | September 30, 2021 | |||
| RMB | RMB | US$ | |||
| Initial franchise fee | 42,985,481 | 57,172,423 | 8,873,021 | ||
| Recurring franchise management fee and others | 427,272,615 | 532,437,000 | 82,632,927 | ||
| Revenues from franchised- and-managed hotels | 470,258,096 | 589,609,423 | 91,505,948 | ||
Total operating costs and expenses
| Quarter Ended | |||||
| September 30, 2020 | September 30, 2021 | September 30, 2021 | |||
| RMB | RMB | US$ | |||
| Operating costs and expenses | |||||
| Hotel operating costs | 108,025,295 | 172,797,324 | 26,817,724 | ||
| Selling and marketing expenses | 21,273,500 | 16,450,435 | 2,553,067 | ||
| General and administrative expenses | 44,782,915 | 68,776,812 | 10,673,994 | ||
| Other operating expenses | 434,792 | 760,850 | 118,083 | ||
| Total operating costs and expenses | 174,516,502 | 258,785,421 | 40,162,868 | ||
| Nine Months Ended | |||||
| September 30, 2020 | September 30, 2021 | September 30, 2021 | |||
| RMB | RMB | US$ | |||
| Operating costs and expenses | |||||
| Hotel operating costs | 292,705,145 | 459,464,624 | 71,307,792 | ||
| Selling and marketing expenses | 51,114,478 | 56,271,856 | 8,733,255 | ||
| General and administrative expenses | 121,672,457 | 195,778,639 | 30,384,368 | ||
| Other operating expenses | 1,633,064 | 4,907,140 | 761,576 | ||
| Total operating costs and expenses | 467,125,144 | 716,422,259 | 111,186,991 | ||
Hotel operating costs were RMB172.8 million (US$26.8 million) [1], a 60.0% increase year-over-year. The increase was mainly attributable to the opening of 24 L&O hotels since the beginning of 2021, which resulted in higher rents, higher utilities and consumables, higher staff headcount and compensation, higher depreciation and amortization, and higher ramp up cost. Excluding the impact from newly opened L&O hotels in 2021, hotel operating costs increased 10.3%. For the first nine months of 2021, hotel operating costs were RMB459.5 million (US$71.3 million) [1], representing a 57.0% increase.
| Quarter Ended | |||||
| September 30, | September 30, | September 30, | |||
| 2020 | 2021 | 2021 | |||
| RMB | RMB | US$ | |||
| Rental | 27,189,274 | 68,151,443 | 10,576,938 | ||
| Utilities | 3,666,479 | 7,272,803 | 1,128,721 | ||
| Personnel cost | 11,732,599 | 21,175,692 | 3,286,416 | ||
| Depreciation and amortization | 14,946,857 | 17,781,855 | 2,759,701 | ||
| Consumable, food and beverage | 7,937,167 | 17,297,833 | 2,684,582 | ||
| Costs of general managers of franchised- and-managed hotels | 24,241,736 | 29,575,721 | 4,590,080 | ||
| Other costs of franchised-and-managed hotels | 7,873,516 | 7,670,523 | 1,190,447 | ||
| Others | 10,437,667 | 3,871,454 | 600,839 | ||
| Hotel Operating Costs | 108,025,295 | 172,797,324 | 26,817,724 | ||
| Nine Months Ended | |||||
| September 30, | September 30, | September 30, | |||
| 2020 | 2021 | 2021 | |||
| RMB | RMB | US$ | |||
| Rental | 90,098,256 | 171,945,795 | 26,685,569 | ||
| Utilities | 11,258,969 | 19,476,338 | 3,022,680 | ||
| Personnel cost | 31,296,079 | 52,246,791 | 8,108,575 | ||
| Depreciation and amortization | 36,873,883 | 51,465,319 | 7,987,292 | ||
| Consumable, food and beverage | 23,477,610 | 49,024,107 | 7,608,422 | ||
| Costs of general managers of franchised- and-managed hotels | 65,575,838 | 84,971,682 | 13,187,398 | ||
| Other costs of franchised-and-managed hotels | 17,853,103 | 20,119,472 | 3,122,493 | ||
| Others | 16,271,407 | 10,215,120 | 1,585,363 | ||
| Hotel Operating Costs | 292,705,145 | 459,464,624 | 71,307,792 | ||
Selling and marketing expenses were RMB16.5 million (US$2.6 million) [1], a 22.7% year-over-year decrease. The decrease was mainly attributable to lower advertising expenses. For the first nine months of 2021, selling and marketing expenses were RMB56.3 million (US$8.7 million) [1], representing a 10.1% increase.
General and administrative expenses were RMB68.8 million (US$10.7 million) [1], a 53.6% year-over-year increase. The increase was mainly attributable to the opening of 24 L&O hotels since the beginning of 2021 and the increased one-time consulting fees for capital market advice. Excluding the impact from newly opened L&O hotels and one-time consulting fees, general and administrative expenses increased by 16.6%. General and administrative expenses for the nine months of 2021 were RMB195.8 million (US$30.4 million) [1], a 60.9% year-over-year increase.
Gross profit was RMB137.6 million (US$21.4 million) [1], a year-over-year decrease of 13.3%. Gross margin was 44.3%, compared to 59.5% 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 first nine months of 2021 was RMB439.2 million (US$68.2 million) [1], a 26.4% year-over-year increase.
Income from operations was RMB54.9 million (US$8.5 million) [1], a year-over-year decrease of 45.6%, with a margin of 17.7%. 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 was RMB88.5 million, a year-over-year decrease of 12.3%, with a margin of 31.5%. Income from operations for the first nine months of 2021 was RMB205.6 million (US$31.9 million) [1], a year-over-year increase of 2.4%.
Net income was RMB33.0 million (US$5.1 million) [1], compared to RMB85.6 million in the third quarter of 2020 and net margin was 10.6%. 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 first nine months of 2021 was RMB179.3 million (US$27.8 million) [1], a year-over-year increase of 8.5%.
Adjusted EBITDA (non-GAAP) [2] was RMB73.7 million (US$11.4 million) [1], a year-over-year decrease of 33.5%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, was 23.7%, compared to 41.5% a year ago. Excluding the impact of newly opened hotels, Adjusted EBITDA was RMB107.3 million, with a margin of 38.2%. Adjusted EBITDA (non-GAAP) for the first nine months of 2021 was RMB248.9 million (US$38.6 million) [1], a year-over-year increase of 10.7%.
Core net income (non-GAAP) was RMB50.2 million (US$7.8 million) [1], a year-over-year decrease of 45.7%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, was 16.2%, compared to 34.6% one year ago. Core net income (non-GAAP) for the first nine months of 2021 was RMB173.0 million (US$26.8 million) [1], a year-over-year decrease of 11.2%.
Earnings per ADS (basic and diluted) were RMB0.33 (US$0.05) [1], down from RMB0.81 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB0.49 (US$0.08) [1], down from RMB0.90 a year ago. Earnings per ADS (basic and diluted) for the first nine months of 2021 was RMB1.80 (US$0.28) [1] up from RMB1.71 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB1.68 (US$0.26) [1] for the nine months of 2021, a decrease from RMB1.89 a year ago.
Cash flow. Operating cash inflow was RMB116.8 million (US$18.1 million) [1] as a result of income from operations. Investing cash outflow was RMB171.3 million (US$26.6 million) [1], which was primarily attributable to acquisition costs of our L&O hotels, investments and deposits of property and equipment, loans to franchisees, and purchases of short-term investments. The investing cash outflow was partially offset by proceeds from repayment from franchisees, and proceeds from short-term investments. Financing cash outflow was RMB48.4 million (US$7.5 million). Operating cash inflow for the first nine months of 2021 was RMB159.7 million (US$24.8 million) [1]. Investing cash outflow for the first nine months of 2021 was RMB672.0 million (US$104.3 million) [1]. Financing cash inflow for first nine months of 2021 was RMB101.5 million (US$15.7 million) [1].
Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposit. As of September 30, 2021, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,192.1 million (US$185.0 million) [1], compared to RMB1,291.0 million as of June 30, 2021. The decrease from the prior quarter was primarily attributable to acquisition costs of our L&O hotels, loans to franchisees and property investments, offset by drawing down of bank facilities.
COVID-19 Update
During the third quarter, RevPAR decreased in July due to the worsened Covid-19 situation in Nanjing city and in Jiangsu Province. Fortunately, RevPAR rebounded quickly to around 100% of the 2019 level in the middle of September. But due to the outbreak of cases in different cities nationwide, it dropped to about 81.3% of its 2019 level during the first week of November but then recovered gradually to about 98.5% of its 2019 level in the last week of December thanks to the resilience of our business model, well-segmented and robust brand portfolio and the loyalty and stickiness of our members.
Guidance
Assuming the recent resurgence of COVID-19 outbreaks remains under control in China in the coming quarters, the Company expects an increase in total revenues of 25%-30% for the full year 2021, compared to 2020 and an increase in total revenues of 7%-12% for the full year 2021, compared to 2019.
The guidance set forth above reflects the Company's current and preliminary views based on our recovery speed and may not be indicative of the final financial results for future interim periods and the full year.
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 September 30, 2021, GreenTree had a total number of 4,626 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 Hospitality Group Ltd. | |||||
| Unaudited Condensed Consolidated Balance Sheets | |||||
| December 31, | September 30, | September 30, | |||
| 2020 | 2021 | 2021 | |||
| RMB | RMB | US$ | |||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 611,358,209 | 198,989,361 | 30,882,665 | ||
| Short-term investments | 301,983,182 | 518,915,595 | 80,534,438 | ||
| Investments in equity securities | 242,378,696 | 243,135,861 | 37,734,094 | ||
| Accounts receivable, net of allowance | 101,511,057 | 106,600,534 | 16,544,143 | ||
| Amounts due from related parties | 9,770,871 | 146,685,649 | 22,765,256 | ||
| Prepaid rent | 13,597,867 | 19,120,240 | 2,967,415 | ||
| Inventories | 3,804,680 | 2,259,917 | 350,734 | ||
| Other current assets | 77,649,794 | 176,685,447 | 27,421,150 | ||
| Loans receivable, net | 222,244,629 | 320,772,059 | 49,783,043 | ||
| Total current assets | 1,584,298,985 | 1,733,164,663 | 268,982,938 | ||
| Non-current assets: | |||||
| Restricted cash | 22,369,900 | 22,299,900 | 3,460,890 | ||
| Long-term time deposits | 490,000,000 | 160,000,000 | 24,831,611 | ||
| Loans receivable, net | 145,703,988 | 335,166,679 | 52,017,053 | ||
| Property and equipment, net | 668,605,661 | 992,679,468 | 154,061,438 | ||
| Intangible assets, net | 491,513,073 | 539,647,424 | 83,751,967 | ||
| Goodwill | 100,231,487 | 105,397,148 | 16,357,381 | ||
| Long-term investments | 369,525,917 | 184,034,186 | 28,561,658 | ||
| Other assets | 66,635,394 | 286,179,925 | 44,414,427 | ||
| Deferred tax assets | 156,070,112 | 142,433,816 | 22,105,382 | ||
| TOTAL ASSETS | 4,094,954,517 | 4,501,003,209 | 698,544,745 | ||
| LIABILITIES AND EQUITY | |||||
| Current liabilities: | |||||
| Short-term bank loans | 150,000,000 | 240,000,000 | 37,247,416 | ||
| Accounts payable | 19,606,344 | 20,287,040 | 3,148,499 | ||
| Advance from customers | 34,305,508 | 26,037,866 | 4,041,013 | ||
| Amounts due to related parties | 3,198,253 | 5,114,422 | 793,746 | ||
| Salary and welfare payable | 51,567,587 | 57,101,423 | 8,862,002 | ||
| Deferred rent | 1,356,132 | 1,400,795 | 217,400 | ||
| Deferred revenue | 221,314,997 | 231,325,052 | 35,901,085 | ||
| Accrued expenses and other current liabilities | 300,696,673 | 369,967,995 | 57,418,133 | ||
| Income tax payable | 87,483,970 | 66,955,205 | 10,391,285 | ||
| Total current liabilities | 869,529,464 | 1,018,189,798 | 158,020,579 | ||
| Deferred rent | 28,642,973 | 56,737,678 | 8,805,550 | ||
| Deferred revenue | 361,901,369 | 326,029,164 | 50,598,933 | ||
| Other long-term liabilities | 115,862,713 | 135,523,772 | 21,032,959 | ||
| Deferred tax liabilities | 178,413,413 | 176,422,515 | 27,380,345 | ||
| Unrecognized tax benefits | 290,679,902 | 314,534,332 | 48,814,963 | ||
| TOTAL LIABILITIES | 1,845,029,834 | 2,027,437,259 | 314,653,329 | ||
| Shareholders' equity: | |||||
| Class A ordinary shares | 222,587,070 | 222,587,070 | 34,544,972 | ||
| Class B ordinary shares | 115,534,210 | 115,534,210 | 17,930,628 | ||
| Additional paid-in capital | 1,149,280,404 | 1,150,764,901 | 178,595,912 | ||
| Retained earnings | 570,042,924 | 755,706,412 | 117,283,796 | ||
| Accumulated other comprehensive income | 45,586,647 | 45,487,996 | 7,059,626 | ||
| Total GreenTree Hospitality Group Ltd. shareholders' equity | 2,103,031,255 | 2,290,080,589 | 355,414,934 | ||
| Non-controlling interests | 146,893,428 | 183,485,361 | 28,476,482 | ||
| Total shareholders' equity | 2,249,924,683 | 2,473,565,950 | 383,891,416 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 4,094,954,517 | 4,501,003,209 | 698,544,745 | ||
| GreenTree Hospitality Group Ltd. | |||||||||||
| Unaudited Condensed Consolidated Statements of Comprehensive Income | |||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||
| September 30, 2020 | September 30, 2021 | September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2021 | ||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||
| Revenues | |||||||||||
| Leased-and- operated hotels | 66,823,544 | 106,518,761 | 16,531,452 | 150,961,027 | 279,514,243 | 43,379,930 | |||||
| Franchised-and- managed hotels | 194,060,899 | 194,002,860 | 30,108,772 | 470,258,096 | 589,609,423 | 91,505,948 | |||||
| Others | 5,983,132 | 9,922,553 | 1,539,956 | 19,034,407 | 29,589,847 | 4,592,272 | |||||
| Total revenues | 266,867,575 | 310,444,174 | 48,180,180 | 640,253,530 | 898,713,513 | 139,478,150 | |||||
| Operating costs and expenses | |||||||||||
| Hotel operating costs | (108,025,295) | (172,797,324) | (26,817,724) | (292,705,145) | (459,464,624) | (71,307,792) | |||||
| Selling and marketing expenses | (21,273,500) | (16,450,435) | (2,553,067) | (51,114,478) | (56,271,856) | (8,733,255) | |||||
| General and administrative expenses | (44,782,915) | (68,776,812) | (10,673,994) | (121,672,457) | (195,778,639) | (30,384,368) | |||||
| Other operating expenses | (434,792) | (760,850) | (118,083) | (1,633,064) | (4,907,140) | (761,576) | |||||
| Total operating costs and expenses | (174,516,502) | (258,785,421) | (40,162,868) | (467,125,144) | (716,422,259) | (111,186,991) | |||||
| Other operating income | 8,577,445 | 3,225,248 | 500,551 | 27,671,358 | 23,278,837 | 3,612,819 | |||||
| Income from operations | 100,928,518 | 54,884,001 | 8,517,863 | 200,799,744 | 205,570,091 | 31,903,978 | |||||
| Interest income and other, net | 23,140,692 | 15,797,161 | 2,451,680 | 47,861,876 | 45,079,808 | 6,996,276 | |||||
| Interest expense | (203,604) | (2,485,865) | (385,800) | (2,941,850) | (9,963,790) | (1,546,356) | |||||
| Gains (losses) from investment in equity securities | 2,905,553 | (16,729,522) | (2,596,381) | (9,734,782) | 27,143,814 | 4,212,654 | |||||
| Other income, net | 517,981 | 3,495,891 | 542,555 | 517,981 | 3,495,891 | 542,554 | |||||
| Income before income taxes | 127,289,140 | 54,961,666 | 8,529,917 | 236,502,969 | 271,325,814 | 42,109,106 | |||||
| Income tax expense | (41,821,938) | (22,507,756) | (3,493,149) | (72,398,501) | (93,047,550) | (14,440,753) | |||||
| Income before share of gains in equity investees | 85,467,202 | 32,453,910 | 5,036,768 | 164,104,468 | 178,278,264 | 27,668,353 | |||||
| Share of gains in equity investees, net of tax | 170,211 | 543,250 | 84,311 | 1,118,542 | 1,007,147 | 156,306 | |||||
| Net income | 85,637,413 | 32,997,160 | 5,121,079 | 165,223,010 | 179,285,411 | 27,824,659 | |||||
| Net loss/(income) attributable to non-controlling interests | (2,347,248) | 1,438,345 | 223,228 | 10,563,167 | 6,378,077 | 989,863 | |||||
| Net income attributable to ordinary shareholders | 83,290,165 | 34,435,505 | 5,344,307 | 175,786,177 | 185,663,488 | 28,814,522 | |||||
| Net earnings per share | |||||||||||
| Class A ordinary share-basic and diluted | 0.81 | 0.33 | 0.05 | 1.71 | 1.80 | 0.28 | |||||
| Class B ordinary share-basic and diluted | 0.81 | 0.33 | 0.05 | 1.71 | 1.80 | 0.28 | |||||
| Net earnings per ADS | |||||||||||
| Class A ordinary share-basic and diluted | 0.81 | 0.33 | 0.05 | 1.71 | 1.80 | 0.28 | |||||
| Class B ordinary share-basic and diluted | 0.81 | 0.33 | 0.05 | 1.71 | 1.80 | 0.28 | |||||
| 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 | (11,616,690) | 1,275,061 | 197,886 | (7,800,682) | (98,651) | (15,311) | |||||
| Unrecognized gain on an available-for- sale | 6,750,000 | - | - | 6,750,000 | - | - | |||||
| Comprehensive income, net of tax | 80,770,723 | 34,272,221 | 5,318,965 | 164,172,328 | 179,186,760 | 27,809,348 | |||||
| Comprehensive loss/(income) attributable to non-controlling interests | (2,347,248) | 1,438,345 | 223,228 | 10,563,167 | 6,378,077 | 989,862 | |||||
| Comprehensive income attributable to ordinary shareholders | 78,423,475 | 35,710,566 | 5,542,193 | 174,735,495 | 185,564,837 | 28,799,211 | |||||
| GreenTree Hospitality Group Ltd. | |||||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||||
| September 30, 2020 | September 30, 2021 | September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2021 | ||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
| Operating activities: | |||||||||||||
| Net income | 85,637,413 | 32,997,160 | 5,121,079 | 165,223,010 | 179,285,411 | 27,824,659 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
| Depreciation and amortization | 18,063,004 | 21,297,943 | 3,305,389 | 50,068,849 | 61,735,788 | 9,581,244 | |||||||
| Share of (gains) in equity method investments | (170,211) | (543,250) | (84,311) | (1,118,542) | (1,007,147) | (156,306) | |||||||
| Fair value change in returnable consideration and contingent consideration, net | - | - | - | - | (502,712) | (78,020) | |||||||
| Gains from disposal of a long-term investment | - | (3,491,312) | (541,843) | - | (3,491,312) | (541,843) | |||||||
| Interest income | (2,217,211) | (2,695,728) | (418,370) | (7,059,071) | (6,550,758) | (1,016,662) | |||||||
| Bad debt expense | 4,123,789 | 6,183,876 | 959,723 | 22,052,714 | 26,645,020 | 4,135,242 | |||||||
| (Gains)losses from investments in equity securities | (2,905,553) | 18,728,741 | 2,906,655 | 9,734,782 | (25,144,595) | (3,902,380) | |||||||
| Foreign exchange (gains) losses | (51,687) | (750,812) | (116,524) | (261,556) | 1,756,830 | 272,656 | |||||||
| Share-based compensation | - | 537,492 | 83,417 | 232,558 | 1,845,357 | 286,395 | |||||||
| Income tax expenses related to dividend distribution or retained profits | 6,486,874 | - | - | 14,576,403 | - | - | |||||||
| Contingent consideration included in other current liabilities and other assets | 2,046,066 | - | - | 2,046,066 | - | - | |||||||
| Changes in operating assets and liabilities: | |||||||||||||
| Accounts receivable | (4,658,499) | 4,488,038 | 696,533 | (43,356,590) | (28,358,558) | (4,401,179) | |||||||
| Prepaid rent | 642,280 | 8,674,595 | 1,346,276 | 10,564,530 | (5,522,373) | (857,059) | |||||||
| Inventories | (1,274,556) | (146,806) | (22,784) | (1,511,933) | 1,533,638 | 238,017 | |||||||
| Amounts due from related parties | 8,625,331 | 3,274,808 | 508,242 | 10,135,528 | (598,730) | (92,921) | |||||||
| Other current assets | (18,021,028) | 12,185,993 | 1,891,236 | (3,193,950) | (111,534,002) | (17,309,805) | |||||||
| Other assets | (8,142,812) | (10,374,644) | (1,610,120) | (17,157,334) | (18,159,564) | (2,818,320) | |||||||
| Accounts payable | 4,598,670 | 2,194,915 | 340,645 | 7,487,666 | 680,702 | 105,643 | |||||||
| Amounts due to related parties | 521,868 | (241,489) | (37,479) | (1,526,433) | 1,916,169 | 297,385 | |||||||
| Salary and welfare payable | 8,405,275 | 264,466 | 41,044 | 9,778,026 | 5,533,836 | 858,838 | |||||||
| Deferred revenue | 6,439,785 | (1,658,924) | (257,461) | (32,603,970) | (25,862,150) | (4,013,743) | |||||||
| Advance from customers | (339,768) | (1,678,033) | (260,427) | (8,097,688) | (8,122,664) | (1,260,618) | |||||||
| Accrued expenses and other current liabilities | 36,865,011 | (1,709,467) | (265,305) | 16,760,864 | 50,679,045 | 7,865,264 | |||||||
| Income tax payable | 15,896,890 | 15,513,591 | 2,407,672 | (30,522,077) | (20,528,765) | (3,186,014) | |||||||
| Unrecognized tax benefits | 16,917,849 | 2,454,572 | 380,944 | 13,707,938 | 23,854,430 | 3,702,149 | |||||||
| Deferred rent | 632,148 | 12,736,350 | 1,976,651 | 4,783,547 | 28,139,368 | 4,367,161 | |||||||
| Other long-term liabilities | 424,893 | 5,577,611 | 865,632 | 1,603,859 | 19,811,059 | 3,074,628 | |||||||
| Deferred taxes | (3,180,335) | (7,044,162) | (1,093,237) | (15,548,950) | 11,645,398 | 1,807,337 | |||||||
| Net cash provided by operating activities | 175,365,486 | 116,775,524 | 18,123,277 | 176,798,246 | 159,678,721 | 24,781,748 | |||||||
| Investing activities: | |||||||||||||
| Purchases of property and equipment | (26,948,009) | (93,109,989) | (14,450,444) | (68,576,946) | (250,998,814) | (38,954,405) | |||||||
| Purchases of intangible assets | - | (201,746) | (31,310) | (9,075) | (201,746) | (31,310) | |||||||
| Proceeds from disposal of property and equipment | 60,262 | - | - | 71,387 | - | - | |||||||
| Payment for acquisition of minority equity | - | - | - | - | (868,388) | (134,772) | |||||||
| Acquisitions, net of cash received | (6,660,000) | (4,112,459) | (638,244) | (7,915,807) | (177,241,084) | (27,507,385) | |||||||
| Advances for purchases of property and equipment | - | - | - | - | (204,889,383) | (31,798,334) | |||||||
| Repayment of advances for purchases of property and equipment | - | 22,400,000 | 3,476,425 | - | 22,400,000 | 3,476,425 | |||||||
| Repayment of advances for acquisitions | 872,700 | 1,069,500 | 165,984 | 36,312,700 | 11,217,500 | 1,740,929 | |||||||
| Purchases of short-term investments | (610,180) | (61,635,884) | (9,565,739) | (148,300,207) | (199,922,194) | (31,027,438) | |||||||
| Proceeds from short-term investments | 8,817,211 | 42,805,509 | 6,643,311 | 407,451,316 | 399,540,539 | 62,007,719 | |||||||
| Proceeds from sales of long-term time deposits | - | - | - | - | 50,000,000 | 7,759,878 | |||||||
| Increase of long-term time deposits | - | - | - | (30,000,000) | (130,000,000) | (20,175,684) | |||||||
| Proceeds from disposal of equity securities and dividends received from equity securities | 5,345,656 | - | - | 7,886,074 | 211,307,112 | 32,794,350 | |||||||
| Proceeds from disposal of equity method investments | - | - | 6,380,000 | - | - | ||||||||
| Loan to related parties | (119,400,000) | (52,546,988) | (8,155,165) | (304,766,500) | (284,292,548) | (44,121,512) | |||||||
| Repayment from related parties | 111,100,000 | 1,750,000 | 271,596 | 297,256,179 | 150,415,500 | 23,344,120 | |||||||
| Loan to third parties | (3,800,000) | - | - | (7,000,000) | (10,500,000) | (1,629,574) | |||||||
| Repayment of loan from third parties | - | - | - | - | 46,500,000 | 7,216,687 | |||||||
| Loan to franchisees | (59,310,002) | (121,148,898) | (18,802,014) | (205,761,780) | (581,584,192) | (90,260,451) | |||||||
| Repayment from franchisees | 35,586,060 | 93,467,363 | 14,505,907 | 70,801,095 | 277,141,562 | 43,011,696 | |||||||
| Net cash (used in) provided by investing activities | (54,946,302) | (171,263,592) | (26,579,693) | 53,828,436 | (671,976,136) | (104,289,061) | |||||||
| Financing activities: | |||||||||||||
| Loan from non-controlling interest | - | - | - | - | 2,792,853 | 433,444 | |||||||
| Repayment of short-term borrowings | (10,000,000) | (50,000,000) | (7,759,878) | (10,000,000) | (50,000,000) | (7,759,878) | |||||||
| Proceeds from short-term borrowings | 2,997,225 | - | - | 21,437,555 | 140,000,000 | 21,727,659 | |||||||
| Capital contribution from noncontrolling interest holders | 2,884,202 | 1,650,000 | 256,076 | 6,262,589 | 8,681,000 | 1,347,270 | |||||||
| Net cash provided by (used in) financing activities | (4,118,573) | (48,350,000) | (7,503,802) | 17,700,144 | 101,473,853 | 15,748,495 | |||||||
| Effect of exchange rate changes on cash and cash equivalents | (1,474,708) | (220,197) | (34,174) | (882,510) | (1,615,286) | (250,687) | |||||||
| Net increase(decrease) in cash and cash equivalents and restricted cash | 114,825,903 | (103,058,265) | (15,994,392) | 247,444,316 | (412,438,848) | (64,009,505) | |||||||
| Cash and cash equivalents and restricted cash at the beginning of the period | 474,778,636 | 324,347,526 | 50,337,947 | 342,160,223 | 633,728,109 | 98,353,060 | |||||||
| Cash and cash equivalents and restricted cash at the end of the period | 589,604,539 | 221,289,261 | 34,343,555 | 589,604,539 | 221,289,261 | 34,343,555 | |||||||
| GreenTree Hospitality Group Ltd. | |||||||||||||
| Unaudited Reconciliation of GAAP and Non-GAAP Results | |||||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||||
| September 30, 2020 | September 30, 2021 | September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2021 | ||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
| Net income | 85,637,413 | 32,997,160 | 5,121,079 | 165,223,010 | 179,285,411 | 27,824,659 | |||||||
| Deduct: | |||||||||||||
| Other operating income | 8,577,445 | 3,225,248 | 500,551 | 27,671,358 | 23,278,837 | 3,612,819 | |||||||
| Interest income and other, net | 23,140,692 | 15,797,161 | 2,451,681 | 47,861,876 | 45,079,808 | 6,996,276 | |||||||
| Gains from investment in equity securities | 2,905,553 | - | - | 45,440,136 | 27,143,814 | 4,212,654 | |||||||
| Share of gains in equity investees, net of tax | 170,211 | 543,250 | 84,311 | 1,118,542 | 1,007,147 | 156,307 | |||||||
| Other income, net | 517,981 | 3,495,891 | 542,554 | 517,981 | 3,495,891 | 542,554 | |||||||
| Add: | |||||||||||||
| Other operating expenses | 434,792 | 760,850 | 118,082 | 1,633,064 | 4,907,140 | 761,576 | |||||||
| Income tax expense | 41,821,938 | 22,507,756 | 3,493,149 | 72,398,501 | 93,047,550 | 14,440,753 | |||||||
| Interest expense | 203,604 | 2,485,865 | 385,800 | 2,941,850 | 9,963,790 | 1,546,356 | |||||||
| Depreciation and amortization | 18,063,004 | 21,297,943 | 3,305,389 | 50,068,849 | 61,735,788 | 9,581,244 | |||||||
| Losses from investment in equity securities | - | 16,729,522 | 2,596,381 | 55,174,918 | - | - | |||||||
| Adjusted EBITDA(Non- GAAP) | 110,848,869 | 73,717,546 | 11,440,783 | 224,830,299 | 248,934,182 | 38,633,978 | |||||||
| Quarter Ended | Nine Months Ended | ||||||||||||
| September 30, 2020 | September 30, 2021 | September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2021 | ||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
| Net income | 85,637,413 | 32,997,160 | 5,121,079 | 165,223,010 | 179,285,411 | 27,824,659 | |||||||
| Deduct: | |||||||||||||
| Government subsidies (net of 25% tax) | 1,005,153 | 287,650 | 44,643 | 14,217,238 | 11,422,522 | 1,772,748 | |||||||
| Gains from investment in equity securities (net of 25% tax) | 2,179,165 | - | - | 34,080,102 | 20,357,861 | 3,159,490 | |||||||
| Other income (net of 25% tax) | 388,486 | 2,621,918 | 406,915 | 388,486 | 2,621,918 | 406,915 | |||||||
| Add: | |||||||||||||
| Share-based compensation | - | 537,492 | 83,417 | 232,558 | 1,845,357 | 286,395 | |||||||
| Losses from investments in equity securities (net of 25% tax) | - | 12,547,142 | 1,947,286 | 50,081,189 | - | - | |||||||
| One-time fees and expense | 3,839,368 | 7,004,623 | 1,087,100 | 3,839,368 | 21,711,927 | 3,369,638 | |||||||
| Asset impairment/Accrued bad debt | - | - | - | 9,501,082 | 4,523,574 | 702,048 | |||||||
| Income tax expenses related to dividend distribution | 6,486,874 | - | - | 14,576,403 | - | - | |||||||
| Core net income(Non- GAAP) | 92,390,851 | 50,176,849 | 7,787,325 | 194,767,784 | 172,963,968 | 26,843,587 | |||||||
| Core net income per ADS (Non-GAAP) | |||||||||||||
| Class A ordinary share- basic and diluted | 0.90 | 0.49 | 0.08 | 1.89 | 1.68 | 0.26 | |||||||
| Class B ordinary share- basic and diluted | 0.90 | 0.49 | 0.08 | 1.89 | 1.68 | 0.26 | |||||||
Operational Data
| 2020 Q3 | 2021 Q3 | ||||
| Total hotels in operation: | 4,195 | 4,626 | |||
| Leased-and-owned hotels | 37 | 62 | |||
| Franchised hotels | 4,158 | 4,564 | |||
| Total hotel rooms in operation | 305,125 | 334,162 | |||
| Leased-and-owned hotels | 4,620 | 7,062 | |||
| Franchised hotels | 300,505 | 327,100 | |||
| Number of cities | 341 | 362 | |||
| Quarter Ended | |||||
| 2020 Q3 | 2021 Q3 | ||||
| Occupancy rate (as a percentage) | |||||
| Leased-and-owned hotels | 70.6% | 65.2% | |||
| Franchised hotels | 79.3% | 72.6% | |||
| Blended | 79.1% | 72.4% | |||
| Average daily rate (in RMB) | |||||
| Leased-and-owned hotels | 171 | 223 | |||
| Franchised hotels | 151 | 161 | |||
| Blended | 151 | 163 | |||
| RevPAR (in RMB) | |||||
| Leased-and-owned hotels | 121 | 146 | |||
| Franchised hotels | 120 | 117 | |||
| Blended | 120 | 118 | |||
| Number of Hotels in Operation | Number of Hotel Rooms in Operation | |||
| 2020 Q3 | 2021 Q3 | 2020 Q3 | 2021 Q3 | |
| Luxury | 20 | 30 | 4,042 | 5,974 |
| Argyle | 20 | 30 | 4,042 | 5,974 |
| Mid-to-up-scale | 337 | 488 | 30,303 | 44,662 |
| GreenTree Eastern | 137 | 189 | 14,305 | 20,283 |
| Deepsleep Hotel | 3 | 6 | 221 | 417 |
| Gem | 33 | 41 | 3,016 | 3,770 |
| Gya | 39 | 59 | 3,340 | 5,030 |
| Vx | 32 | 74 | 2,563 | 6,589 |
| Ausotel | 12 | 16 | 1,561 | 2,109 |
| Urban Garden and others[1] | 81 | 103 | 5,297 | 6,464 |
| Mid-scale | 2,684 | 2,912 | 217,922 | 229,632 |
| GreenTree Inn | 2,113 | 2,147 | 178,179 | 177,770 |
| GT Alliance | 321 | 513 | 24,560 | 36,534 |
| GreenTree Apartment | 13 | 16 | 862 | 1,098 |
| Vatica | 123 | 112 | 8,925 | 8,115 |
| City 118 Selected and others[1] | 114 | 124 | 5,396 | 6,115 |
| Economy hotels | 1,154 | 1,196 | 52,858 | 53,894 |
| Shell | 593 | 633 | 25,791 | 27,406 |
| City 118 and others[1] | 561 | 563 | 27,067 | 26,488 |
| Total | 4,195 | 4,626 | 305,125 | 334,162 |