omniture

GreenTree Hospitality Group Ltd. Reports First Quarter 2018 Financial Results

2018-05-15 14:30 685
  • A total of 2,354 hotels with 195,552 hotel rooms were in operation as of March 31, 2018, as compared to 2,289 hotels and 190,807 hotel rooms as of December 31, 2017
  • Total revenues increased 23.3% year-over-year from RMB166.3 million for the first quarter of 2017 to RMB204.9 million (US$32.7 million)[1] for the first quarter of 2018.
  • Adjusted EBITDA (non-GAAP) increased 29.6% year-over-year from RMB87.7 million for the first quarter of 2017 to RMB113.6 million (US$18.1 million)[1] for the first quarter of 2018.
  • Net income attributable to GreenTree Hospitality Group Ltd. increased 21.0% year-over-year from RMB74.5 million for the first quarter of 2017 to RMB90.2 million (US$14.4 million)[1] for the first quarter of 2018.
  • Core net income (non-GAAP) increased 27.5% year-over-year from RMB65.9 million for the first quarter of 2017 to RMB84.0 million (US$13.4 million)[1] for the first quarter of 2018.
  • Basic and diluted earnings per ADS were RMB0.98 (US$0.16)[1] for the first quarter of 2018, compared to RMB0.82 for the first quarter of 2017.
  • The Company provided guidance for growth in full year 2018 total revenues of 20-25% from 2017.

SHANGHAI, May 15, 2018 /PRNewswire/ -- GreenTree Hospitality Group Ltd. (NYSE: GHG) ("GreenTree", the "Company", "we", "us" and "our"), a leading franchised hotel operator in China, today announced its unaudited financial results for the first quarter ended March 31, 2018.

First Quarter of 2018 Operational Highlights

  • As of March 31, 2018, GreenTree had 26 leased-and-operated ("L&O") hotels and 2,328 franchised-and-managed ("F&M") hotels in operation in 266 cities across China, compared to 26 L&O hotels and 2,263 F&M hotels in operation in 263 cities as of December 31, 2017.
  • In the first quarter of 2018, the Company opened 80 F&M hotels, 44 in the mid-scale segment, 6 in the business to mid-to-up-scale segment and 30 in the economy segment. Of the hotels opened, 10 hotels were in Tier 1 cities[2], 22 in Tier 2 cities[3] and the remaining 48 hotels in other cities in China, while the Company closed a total of 15 F&M hotels in the quarter.
  • As of March 31, 2018, the Company had a total of 406 hotels contracted for or under development.
  • The average daily room rate, or ADR, for all hotels in operation, was RMB156 in the first quarter of 2018, compared to RMB152 in the first quarter of 2017, an increase of 2.6% year-over-year.
  • The occupancy rate for all hotels in operation was 79.2% in the first quarter of 2018, compared to 77.6% in the first quarter of 2017, an increase of 1.6% year-over-year.
  • The revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR by its occupancy rate, was RMB124 in the first quarter of 2018, representing a 5.1% year-over-year increase from RMB118 in the first quarter of 2017.

As of March 31, 2018, we had approximately 22 million individual loyal members and over 860,000 corporate members, compared to approximately 21 million and over 820,000, respectively, as of December 31, 2017. During the first quarter of 2018, we sold approximately 96% of our room nights through our direct sales channels, including our individual loyal members and corporate members, while online travel agencies, or OTAs, only contributed approximately 4% of our room nights.

"After 13 years of hard work by our team and fast organic growth, we are proud to have completed our IPO on the NYSE on March 27, 2018,' commented Mr. Alex Xu, Chairman and Chief Executive Officer of GreenTree. "Historically, the first quarter has been our softest quarter due to the Chinese New Year holiday. However we were able to achieve solid operating results for the quarter. We are quite pleased with our start as a public company, and we are confident in our positioning going forward. We will continue to focus on our existing business model which we believe will benefit our customers and franchisees, grow our membership program and invest in our brands and our technology. We have a strong pipeline and are on track to open more new hotels. We are particularly excited to premier our three new business to mid-to-up-scale brands this year, namely Gme, Gya and VX. With additional cash on our balance sheet, we intend to make selective acquisitions to further expand our hotel network. Overall, continued strong economic growth and increasing consumer spending, along with our distinct portfolio of brands, strong pipeline, and asset-light model, should help us continue to deliver strong operational performance and value to our shareholders over the long term."

 

First Quarter of 2018 Financial Results



Quarter Ended


March 31, 2017

March 31, 2018

March 31, 2018


RMB

RMB

USD

Revenues




Leased-and-operated hotels

41,762,816

44,175,458

7,042,607

Franchised-and-managed hotels

112,236,364

143,868,763

22,936,065

Membership fees

12,267,607

16,899,200

2,694,130

Total revenues

166,266,787

204,943,421

32,672,802

 

Total revenues for the first quarter of 2018 were RMB204.9 million (US$32.7 million)[1], representing a 23.3% increase over the first quarter of 2017. This year-over-year increase was primarily attributable to the net additional 65 F&M hotels to our network, the opening of a GreenTree Eastern L&O hotel in Shanghai in June 2017, improved RevPAR for both F&M and L&O hotels as well as membership growth; and was partially offset by the closure of one L&O hotel and the conversion of six L&O hotels to F&M hotels.

  • Total revenues from leased-and-operated hotels for the first quarter of 2018 were RMB44.2 million (US$7.0 million)[1], representing a 5.8% year-over-year increase. This year-over-year increase was mainly attributable to RevPAR growth of 17.0% resulting from a GreenTree Eastern hotel opened in Shanghai in 2017, and partially offset by the closure of one hotel and the conversion of six hotels to F&M hotels in 2017.
  • Total revenues from franchised-and-managed hotels for the first quarter of 2018 were RMB143.9 million (US$22.9 million)[1], representing a 28.2% year-over-year increase. Initial franchise fees increased 75.4% year-over-year, primarily due to the gross opening of 80 hotels in the first quarter of 2018 as compared to 48 hotels opened in the first quarter of 2017. The 25% year-over-year increase in recurring franchisee management fees was primarily due to RevPAR growth of 4.2% as well as growth in central reservation system ("CRS") usage fees, annual IT and marketing fees and hotel manager fees, which in turn resulted from the increased number of hotels and hotel rooms in operation.

 


Quarter Ended


March 31, 2017

March 31, 2018

March 31, 2018


RMB

RMB

USD

 Initial franchise fee

7,122,581

12,494,913

1,991,983

 Recurring franchise management fee

105,113,783

131,373,850

20,944,082

 Revenues from franchised-and-managed hotels

112,236,364

143,868,763

22,936,065

 

  • Membership fees represent the one-time membership fee the Company charges in relation to its paid memberships recognized as our revenue on a straight line basis over the estimated life of the membership, which is three to six years depending on the membership level. This totaled RMB16.9 million (US$2.7 million)[1] in the first quarter of 2018, representing a 37.8% year-over-year increase. The increase was primarily a result of an increase in the number of our paid members from approximately 17 million as of December 31, 2017 to approximately 18 million as of March 31, 2018 as we continued to promote our paid membership program.

 


Quarter Ended


March 31, 2017

March 31, 2018

March 31, 2018


RMB

RMB

USD

Operating cost and expenses




Hotel operating costs

57,034,812

65,111,072

10,380,237

Selling and marketing expenses

9,653,945

11,349,067

1,809,308

General and administrative expenses

18,434,930

20,400,857

3,252,376

Other operating expenses

852,735

143,262

22,839

Total operating cost and expenses

85,976,422

97,004,258

15,464,760

 

Hotel operating costs for the first quarter of 2018 were RMB65.1 million (US$10.4 million)[1], compared to RMB57.0 million in the first quarter of 2017, representing a 14.2% year-over-year increase. The year-over-year increase were mainly attributable to the increased general managers in our hotel network and other costs associated with the expansion of our F&M hotels, and higher rental costs in the GreenTree Eastern L&O hotel and other L&O hotels; and was partially offset by reduced rental costs, depreciation and amortization and operating costs related to the closure and conversion of seven L&O hotels.

 


Quarter Ended


March 31, 2017

March 31, 2018

March 31, 2018


RMB

RMB

USD

Rental

15,300,179

17,632,067

2,810,966

Utilities

4,696,087

5,111,000

814,814

Personnel cost

6,402,224

7,231,850

1,152,927

Depreciation and amortization

6,141,427

4,820,413

768,487

Consumable, food and beverage

2,745,119

4,436,637

707,304

Costs of general managers of franchised-and-operated hotels

12,921,722

15,585,608

2,484,713

Other costs of franchised-and-operated hotels

5,591,800

6,750,036

1,076,115

Others

3,236,254

3,543,461

564,911

Hotel Operating Costs

57,034,812

65,111,072

10,380,237

 

Selling and marketing expenses for the first quarter of 2018 were RMB11.3 million (US$1.8 million)[1], compared to RMB9.7 million in the first quarter of 2017. The year-over-year increase of 17.6% in the first quarter of 2018 was mainly attributable to advertising and promotion expenses mainly related to our three new business to mid-to-up-scale brands (Gme, Gya and VX), increased personnel, compensation and other costs (i.e. travel expenses) of business development personnel, as a result of the increased opening of hotels.

General and administrative expenses for the first quarter of 2018 were RMB20.4 million (US$3.3 million)[1], compared to RMB18.4 million in the first quarter of 2017. The year-over-year increase of 10.7% was mainly due to IPO-related expenses and increased compensation of staff at our headquarters resulting from the growth of our business.

Gross profit for the first quarter of 2018 was RMB139.8 million (US$22.3 million)[1], compared to RMB109.2 million in the first quarter of 2017, representing a year-over-year increase of 28.0%. Gross margin improved to 68.2%, compared to 65.7% a year ago.

Income from operations for the first quarter of 2018 was RMB121.8 million (US$19.4 million)[1], compared to RMB80.6 million in the first quarter of 2017, representing a year-over-year increase of 51.0%. Operating margin improved to 59.4%, compared to 48.5% a year ago.

Adjusted EBITDA (non-GAAP) for the first quarter of 2018 was RMB113.6 million (US$18.1 million)[1], compared to RMB87.7 million for the first quarter of 2017, a year-over-year increase of 29.6%. The adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as percentage of total revenues, was 55.4% in the first quarter of 2018, compared to 52.7% in the first quarter of 2017.

Net income attributable to GreenTree Hospitality Group Ltd. for the first quarter of 2018 was RMB90.2 million (US$14.4 million)[1], or 44.0% of net revenues, compared to RMB74.5 million, or 44.8% of net revenues, in the first quarter of 2017, a year-over-year increase of 21.0%.

Core net income (non-GAAP) for the first quarter of 2018 was RMB84.0 million (US$13.4 million)[1], compared to RMB65.9million in the first quarter of 2017, representing a 27.5% year-over-year increase. The core net margin, defined as core net income (non-GAAP) as percentage of total revenues, was 41.0% in the first quarter of 2018, compared to 39.6% in the first quarter of 2017.

Basic and diluted earnings per ADS for the first quarter of 2018 were RMB0.98 (US$0.16)[1], compared to RMB0.82 for the first quarter of 2017, representing a year-over-year increase of 19.5%.

Cash flow. Operating cash inflow for the first quarter of 2018 was RMB116.0 million (US$18.5 million)[1], due primarily to improved operating performance across our hotel portfolio. Investing cash inflow for the first quarter of 2018 was RMB160.1 million (US$25.5 million)[1], which was attributable primarily to changes in short term investments, and partially offset by purchase of property and equipment of RMB58.3 million. Financing cash inflow for the first quarter of 2018 was RMB790.5 million (US$126.0 million)[1], which was attributable primarily to IPO proceeds net of capitalized expenses of RMB833.2 million, partially offset by dividends to pre-IPO shareholders and related taxes of RMB42.7 million.

Cash and cash equivalents, restricted cash, Short term investments and Trading securities. As of March 31, 2018, the Company had a total balance of cash and cash equivalents, restricted cash, short term investments and trading securities of RMB2,077.2 million (US$331.2 million)[1], as compared to RMB1,251.6 million as of December 31, 2017, primarily due to the proceeds of our IPO net of capitalized expenses and net operating cash inflow.

Guidance
For the full year 2018, the Company expects growth in total revenues of 20-25% from 2017.

The guidance set forth above reflects the Company's current and preliminary view based on our estimates, and may not be indicative of our financial results for future interim periods and the full year ended December 31, 2018 and is subject to change.

Conference Call

GreenTree's management will hold an earnings conference call at 8:00 AM on May 15, 2018, U.S. Eastern Time (8:00 PM on the same day Beijing/Hong Kong Time).

Dial-in numbers for the live conference call are as follows:

International

1-412-902-4272

China

4001-201203

US

1-888-346-8982

Hong Kong

800-905945 or 852-3018-4992

Participants should ask to join the GreenTree call, please dial in approximately 10 minutes before the scheduled time of the call.

A telephone replay of the call will be available after the conclusion of the conference call through May 22, 2018.

Dial-in numbers for the replay are as follows:

International Dial-in 

1-412-317-0088

U.S. Toll Free

1-877-344-7529

Passcode:

10120243

Additionally, a live and archived webcast of this conference call will be available at http://ir.998.com.

Use of Non-GAAP Financial Measures

We believe that Adjusted EBITDA and core net income, as we present it, is a useful financial metric to assess our operating and financial performance before the impact of investing and financing transactions, income taxes and certain non-core and non-recurring items in our financial statements.

The presentation of Adjusted EBITDA and core net income should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.

The use of Adjusted EBITDA and core net income has certain limitations because it does not reflect all items of income and expenses that affect our operations. Items excluded from Adjusted EBITDA and core net income are significant components in understanding and assessing our operating and financial performance. Depreciation and amortization expense for various long-term assets, income tax and share-based compensation have been and will be incurred and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA and core net income does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest expense/income, gains/losses from trading securities, income tax expenses, share-based compensation, share of loss in equity investees, government subsidies and other relevant items both in our reconciliations to the corresponding U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

The term Adjusted EBITDA and core net income is not defined under U.S. GAAP, and Adjusted EBITDA and core net income is not a measure of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider this data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, our Adjusted EBITDA and core net income may not be comparable to Adjusted EBITDA and core net income or similarly titled measures utilized by other companies since such other companies may not calculate Adjusted EBITDA and core net income in the same manner as we do.

Reconciliations of the Company's non-GAAP financial measures, including Adjusted EBITDA and core net income, to the consolidated statement of operations information are included at the end of this press release.

About GreenTree Hospitality Group Ltd.

GreenTree Hospitality Group Ltd. ("GreenTree" or the "Company") (NYSE: GHG) is a leading franchised hotel operator in China. As of December 31, 2017, GreenTree had the highest proportion of franchised-and-managed hotels among the top four economy to mid-scale hotel networks in China. In 2017, GreenTree was the fourth largest economy to mid-scale hotel group in China in terms of number of hotel rooms according to the China Hospitality Association. The Company has built a strong suite of brands including its flagship "GreenTree Inns" brand as a result of its long-standing dedication to the hospitality industry in China, the consistent quality of its services, signature hotel designs, broad geographic coverage and convenient locations. GreenTree has positioned its brands to appeal to value- and quality-conscious business and leisure travelers.

For more information on GreenTree, please visit http://ir.998.com

Safe Harbor Statements

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995.  In some cases, these forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," "confident," "future," or other similar expressions. GreenTree may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about or based on GreenTree's current beliefs, expectations, assumptions, estimates and projections about us and our industry, are forward-looking statements that involve known and unknown factors, risks and uncertainties that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such factors and risks include, but not limited to the following: GreenTree's goals and growth strategies; its future business development, financial condition and results of operations; trends in the hospitality industry in China and globally; competition in our industry; fluctuations in general economic and business conditions in China and other regions where we operate; the regulatory environment in which we and our franchisees operate; and assumptions underlying or related to any of the foregoing. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made, in this press release are current as of the date of the press release. Except as required by law, GreenTree undertakes no obligation to update any such information or forward-looking statements to reflect events or circumstances after the date on which the information is provided or statements are made, or to reflect the occurrence of unanticipated events.

[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.2726 on March 30, 2018 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.

[2] "Tier 1 cities" refers to the term used by the National Bureau of Statistics of China and refer to Beijing, Shanghai, Shenzhen and Guangzhou.

[3] "Tier 2 cities" refers to the 32 major cities, other than Tier 1 cities, as categorized by the National Bureau of Statistics of China, 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.

 

--Financial Tables and Operational Data Follow--

 

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Balance Sheets



December 31,
2017

March 31,
2018

March 31,
2018


RMB

RMB

USD

ASSETS                                                                                      




Current assets:




Cash and cash equivalents

161,963,665

1,227,699,122

195,724,121

Short-term investment

781,850,000

553,411,589

88,226,826

Trading securities

307,754,960

296,109,261

47,206,782

Accounts receivable, net of allowance for doubtful
accounts

53,882,894

64,786,226

10,328,448

Amounts due from related parties

3,248,692

3,665,050

584,295

Prepaid rent

4,292,472

2,706,095

431,415

Inventories

2,355,154

1,579,974

251,885

Other current assets

127,269,801

138,777,412

22,124,384

Loans receivable, net

6,600,000

9,960,000

1,587,858

Deferred tax assets

36,207,884

37,004,631

5,899,409

Total current assets

1,485,425,522

2,335,699,360

372,365,423





Non-current assets:




Amounts due from a related party

2,600,000

2,600,000

414,501

Restricted cash

3,000,000

3,000,000

478,271

Loan receivable, net

-

13,140,000

2,094,825

Property and equipment, net

96,669,251

94,212,311

15,019,659

Intangible assets, net

3,727,383

3,476,141

554,179

Goodwill

2,959,183

2,959,183

471,763

Long-term investments

122,508,832

121,601,796

19,386,187

Other assets

5,741,301

61,387,090

9,786,546

Deferred tax assets

33,351,457

33,831,687

5,393,567

 TOTAL ASSETS

1,755,982,929

2,671,907,568

425,964,921





LIABILITIES AND EQUITY




Current liabilities:




Accounts payable

7,293,341

11,990,281

1,911,533

Advance from customers

33,662,363

25,173,880

4,013,309

Amounts due to related parties

473,018

799,714

127,493

Salary and welfare payable

44,577,683

42,898,598

6,839,046

Deferred rent

2,916,205

2,974,506

474,206

Deferred revenue

109,101,986

115,220,777

18,368,902

Accrued expenses and other current liabilities

293,741,951

322,017,828

51,337,216

Income tax payable

103,830,578

120,564,418

19,220,804

Dividends payable

39,691,103

160,840,918

25,641,826

Deferred tax liabilities

27,745,951

25,618,132

4,084,133

Total current liabilities

663,034,179

828,099,052

132,018,468





Deferred rent

23,050,635

21,977,886

3,503,792

Deferred revenue

144,258,584

153,048,710

24,399,565

Other long-term liabilities

73,937,277

75,710,666

12,070,061

Deferred tax liabilities

5,797,260

5,087,072

810,999

Unrecognized tax benefits

113,299,633

117,050,785

18,660,649

 Total liabilities

1,023,377,568

1,200,974,171

191,463,534





Shareholders' equity:




Class A ordinary shares

160,189,926

217,421,867

34,662,160

Class B ordinary shares

140,696,841

115,534,210

18,418,871

Additional paid-in capital

212,309,734

989,409,918

157,735,216

Retained earnings

223,134,889

152,492,832

24,310,945

Accumulated other comprehensive loss

(4,086,149)

(4,256,031)

(678,511)

Total GreenTree Hospitality Group Ltd.
shareholders' equity

732,245,241

1,470,602,796

234,448,681





Noncontrolling interests

360,120

330,601

52,706

Total shareholders' equity

732,605,361

1,470,933,397

234,501,387





TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY

1,755,982,929

2,671,907,568

425,964,921

 

 

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income



Quarter Ended


March 31, 2017

March 31, 2018

March 31, 2018


RMB

RMB

USD

Revenues                                                                            




Leased-and-operated hotels

41,762,816

44,175,458

7,042,607

Franchised-and-managed hotels

112,236,364

143,868,763

22,936,065

Membership fees

12,267,607

16,899,200

2,694,130

Total revenues

166,266,787

204,943,421

32,672,802





Operating cost and expenses




Hotel operating costs

(57,034,812)

(65,111,072)

(10,380,237)

Selling and marketing expenses

(9,653,945)

(11,349,067)

(1,809,308)

General and administrative expenses

(18,434,930)

(20,400,857)

(3,252,376)

Other operating expenses

(852,735)

(143,262)

(22,839)

Total operating cost and expenses

(85,976,422)

(97,004,258)

(15,464,760)





Other operating income

344,499

13,825,401

2,204,094

Income from operations

80,634,864

121,764,564

19,412,136





Interest income and other, net 

6,735,011

4,703,862

749,906

Gains (losses) from trading securities

11,582,052

(5,173,627)

(824,798)

Other expense, net

(40,966)

-

-

Income before income taxes

98,910,961

121,294,799

19,337,244





Income tax expense

(23,837,405)

(30,218,421)

(4,817,527)

Income before share of loss in equity
investees

75,073,556

91,076,378

14,519,717





Share of loss in equity investees, net of tax

(565,525)

(907,036)

(144,603)

Net income

74,508,031

90,169,342

14,375,114





Net loss attributable to noncontrolling interests

28,118

29,519

4,706

Net income attributable to ordinary
shareholders

74,536,149

90,198,861

14,379,820





Net earnings per share




Class A ordinary share-basic and diluted

0.82

0.98

0.16

Class B ordinary share-basic and diluted

0.82

0.98

0.16





Net earnings per ADS




Class A ordinary share-basic and diluted

0.82

0.98

0.16

Class B ordinary share-basic and diluted

0.82

0.98

0.16





Weighted average shares outstanding




Class A ordinary share-basic and diluted

48,635,252

50,856,151

50,856,151

Class B ordinary share-basic and diluted

42,716,957

40,949,391

40,949,391





Other comprehensive income, net of tax




-Foreign currency translation adjustments

(1,152,244)

(169,882)

(27,083)

Comprehensive income, net of tax

73,355,787

89,999,460

14,348,031





Comprehensive loss attributable to
noncontrolling interests

28,118

29,519

4,706

Comprehensive income attributable to
ordinary shareholders

73,383,905

90,028,979

14,352,737

 

 

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows





Quarter Ended




March 31,


March 31,


March 31,




2017


2018


2018




RMB


RMB


USD









Operation activities:








Net income


74,508,031


90,169,342


14,375,114










Adjustments to reconcile net income to
net cash provided by operating activities:








Depreciation and amortization


6,558,915


5,394,502


860,011


Share of loss in equity method investments


565,525


907,036


144,603


Interest income


(3,050,000)


(4,703,862)


(749,906)


Bad debt expense


573,272


319,258


50,897


(Gains) losses from trading securities


(11,582,052)


5,173,627


824,798


Loss on disposal of property and equipment


852,736


-


-


Foreign exchange (gain) loss


(923,501)


725,206


115,615


Share-based compensation


-


159,839


25,482










Changes in operating assets and liabilities:








Restricted cash


7,200,000


-


-


Accounts receivable


(10,705,600)


(11,222,590)


(1,789,145)


Prepaid rent


3,968,362


1,586,377


252,906


Inventories


217,476


775,180


123,582


Amounts due from related parties


2,254,024


(416,358)


(66,377)


Other current assets


(2,789,799)


(6,803,749)


(1,084,678)


Other assets


1,728,263


-


-


Accounts payable


1,314,586


4,696,940


748,803


Amounts due to related parties


2,695,971


326,696


52,083


Salary and welfare payable


(2,818,801)


(1,679,085)


(267,686)


Deferred revenue


16,892,977


14,908,917


2,376,832


Advance from customers


3,463,721


(8,488,483)


(1,353,264)


Accrued expenses and other current liabilities


12,280,946


4,083,287


650,972


Income tax payable


15,003,494


19,733,840


3,146,038


Unrecognized tax benefits


(450,013)


3,751,152


598,022


Deferred rent


(5,208,048)


(1,014,448)


(161,727)


Other long-term liabilities


(9,038,094)


1,773,389


282,720


Deferred taxes


35,692


(4,114,984)


(656,025)


Net cash provided by operating activities


103,548,083


116,041,029


18,499,670









Investing activities:








Purchases of property and equipment


(4,759,726)


(58,332,109)


(9,299,510)


Purchases of short-term investments


-


(516,561,589)


(82,352,069)


Proceeds from short-term investments


-


745,000,000


118,770,526


Proceeds from disposal of property and
equipment


1,600,000


-


-


Purchases of trading securities


(31,142,698)


(4,795,838)


(764,569)


Proceeds from disposal of trading securities


20,729,356


11,267,910


1,796,370


Loan to a related party


(1,000,000)


-


-


Loan to franchisees


(3,500,000)


(20,000,000)


(3,188,470)


Repayment from a franchisee


-


3,500,000


557,982


Net cash (used in) provided by investing
activities


(18,073,068)


160,078,374


25,520,260









Financing activities:








Distribution to the shareholders


-


(39,691,103)


(6,327,696)


Income tax paid related to the above
distribution


-


(3,000,000)


(478,271)


Increase in restricted cash


(875,000,000)


-


-


Proceeds from IPO, net of capitalized
expenses


-


833,202,245


132,832,039


Net cash (used in) provided by financing
activities


(875,000,000)


790,511,142


126,026,072










Effect of exchange rate changes on cash and
cash equivalents


(228,741)


(895,088)


(142,698)










Net increase in cash and cash equivalents


(789,753,726)


1,065,735,457


169,903,304


Cash and cash equivalents at the beginning
of the year


896,782,935


161,963,665


25,820,817


Cash and cash equivalents at the end of the year


107,029,209


1,227,699,122


195,724,121










Supplemental disclosure of cash flow
information:








Income taxes paid


(9,283,301)


(14,599,565)


(2,327,514)

 

 

GreenTree Hospitality Group Ltd.

Unaudited Reconciliation of GAAP and Non-GAAP Results



Quarter Ended


March 31,

2017

March 31,

2018

March 31,

2018


RMB

RMB

USD





 Net income 

74,508,031

90,169,342

14,375,114





 Deduct:                                                                             




Other operating income

344,499

13,825,401

2,204,094

Interest income and other, net

6,735,011

4,703,862

749,906

Gains from trading securities

11,582,052

-

-

 Add:




Other operating expenses

852,735

143,262

22,839

Income tax expense

23,837,405

30,218,421

4,817,527

Share of loss in equity investees, net of tax

565,525

907,036

144,603

Share-based compensation

-

159,839

25,482

Depreciation and amortization

6,558,915

5,394,502

860,011

Losses from trading securities

-

5,173,627

824,798

Other expense, net

40,966

-

-

 Adjusted EBITDA (Non-GAAP)

87,702,015

113,636,766

18,116,374



Quarter Ended


March 31, 2017

March 31, 2018

March 31, 2018


RMB

RMB

USD





Net income

74,508,031

90,169,342

14,375,114





Deduct:




       Government subsidies (net of 25% tax)

38

10,236,002

1,631,859

       Gains from trading securities (net of 25% tax)

8,686,539

-

-

Add:




       Share-based compensation

-

159,839

25,482

       Losses from trading securities (net of 25% tax)

-

3,880,220

618,598

       Other expense (net of 25% tax)

30,725

-

-





 Core net income (Non-GAAP)

65,852,179

83,973,399

13,387,335

 

Operational Data


As of March 31, 2017

As of March 31, 2018

Total hotels in operation:

1,964

2,354

    Leased and owned hotels

30

26

    Franchised hotels

1,934

2,328

Total hotel rooms in operation

168,579

195,552

    Leased and owned hotels

3,829

3,301

    Franchised hotels

164,750

192,251

Number of cities

233

266



Quarter Ended


March 31, 2017

March 31, 2018

Occupancy rate (as a percentage)



    Leased and owned hotels

59.40%

60.50%

    Franchised hotels

78.10%

79.60%

    Blended

77.60%

79.20%

Average daily room rate (in RMB)



    Leased and owned hotels

168

193

    Franchised hotels

152

155

    Blended                                                                                     

152

156

RevPAR (in RMB)



    Leased and owned hotels

100

117

    Franchised hotels

119

124

    Blended

118

124

 

Hotel breakdown by segment 


Number of Hotels in Operation


Number of Hotel Rooms in Operation


As of
December 31, 2017


As of
March 31, 2018


As of
December 31, 2017


As of
March 31, 2018

Economy hotels

257


287


14,060


15,810

Vatica                                    

104


111


7,704


8,280

Shell

153


176


6,356


7,530

Mid-scale

1,982


2,012


171,041


173,456

GreenTree Inn

1,733


1,755


151,154


152,821

GreenTree Alliance

249


257


19,887


20,635

Business to
Mid-to-up-scale

50


55


5,706


6,286

GreenTree Eastern

50


55


5,706


6,286

 Total

2,289


2,354


190,807


195,552

 

For more information, please contact:

GreenTree

Ms. Selina Yang
Phone: +86-21-3617-4886*7999
E-mail: ir@998.com 
http://ir.998.com

Christensen

In Hong Kong 
Ms. Karen Hui 
Phone: +852-9266-4140 
E-mail: khui@christensenIR.com  

In US 
Ms.  Linda Bergkamp 
Phone: +1-480-614-3004
E-mail: lbergkamp@ChristensenIR.com

Cision View original content:http://www.prnewswire.com/news-releases/greentree-hospitality-group-ltd-reports-first-quarter-2018-financial-results-300648342.html

Source: GreenTree Hospitality Group Ltd.
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