GreenTree Hospitality Group Ltd. Reports First Half 2023 Financial Results.

SHANGHAI: GreenTree Hospitality Group Ltd. (NYSE: GHG) ("GreenTree", the "Company", "we", "us" and "our"), a leading hospitality and restaurant management group in China, today announced its unaudited financial results for the first half of 2023. As Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China, were all under the control of our founder, Alex S. Xu, until their acquisition by the Company, the Company accounted for the common-control acquisitions by using the pooling of interest method. The consolidated balance sheets and consolidated statements of comprehensive income/(loss) include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under common control. In this report, the comparative financial data have been restated to reflect the business combinations under common control.

First Half 2023 Operational Highlights

Hotels

A total of 4,108 hotels with 303,387 hotel rooms were in operation as of June 30, 2023.

The Company opened 183 hotels during the six months ended June 30, 2023, and had a pipeline of 969 hotels contracted for or under development as of June 30, 2023.

The average daily room rate was RMB167 in the first quarter of 2023, an increase of 9.1% from RMB153 in the first quarter of 2022, and RMB181 in the second quarter of 2023, a 23.1% year-over-year increase.

The occupancy rate was 71.7% in the first quarter of 2023, up from 60.0% in the first quarter of 2022, and 77.8% in the second quarter of 2023, compared to 62.2% in the second quarter of 2022.

Revenue per available room, or RevPAR, was RMB120 in the first quarter of 2023, a 30.4% year-over-year increase, and RMB141 in the second quarter of 2023, a 54.0% year-over-year increase.

Restaurants

A total of 218 restaurants were in operation as of June 30, 2023.

The AC (average check) was RMB55 in the first quarter of 2023, a 19.2% year-over-year increase, and RMB53 in the second quarter of 2023, a 2.2% year-over-year increase.

The ADT (average daily tickets) was 110 in the first quarter of 2023, down from 130 in the first quarter of 2022, and 120 in the second quarter of 2023, compared to 78 in the second quarter of 2022.

The ADS (average daily sales per store) was RMB 6,080 in the first quarter of 2023, an increase of 0.9% from RMB 6,027 in the first quarter of 2022, and RMB 6,371 in the second quarter of 2023, a 57.3% year-over-year increase.

"For our hotel business, the first quarter of 2023 marked a new beginning thanks to the recovery in the hospitality industry and the entire economy in China. RevPAR recovered to 94.3% of its first quarter of 2019 level. RevPAR during the national Labor Day holiday in early May reached more than 120% of its level in the same period in 2019, capitalizing on the popularity of travel during the national holiday period. And due to an increase in the number of people traveling during the summer vacation, RevPAR in July and August was nearly stable at 110% of its level in the same period in 2019.

As previously disclosed, the Company completed the acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China from our controlling shareholder. Our strategy and execution in our restaurant business focus on further expansion in the proportion of franchised-and-managed restaurants and greater penetration to street stores. To ensure the profitability of our restaurant business, we closed unprofitable stores. In the first half of 2023, the ADS of restaurant business recovered to 122.9% of its first half of 2022 level.

"We are grateful for the hard work of our team, franchisees, and partners, and the support of our customers that made it possible to recover quickly starting from the first quarter of 2023 as China began returning to normal life," said Mr. Alex S. Xu...