Core Viewpoint - Wanda Hotel Development Co., Ltd. has released its first independent "2024 Environmental, Social, and Governance (ESG) Report," showcasing its commitment to sustainable development and its role as a leader in the hotel industry in promoting green transformation [1] Group 1: Strategic Leadership and Business Expansion - The company integrates sustainable development into its core strategy, establishing a three-tier ESG governance structure led by the board of directors [2] - In 2024, Wanda Hotel opened 50 new hotels, bringing the total number of managed hotels to over 200, with a presence in more than 280 cities globally [2] Group 2: Human-Centric Approach and Employee Development - Wanda Hotel views employees as valuable assets and has developed comprehensive talent training systems, including specific training plans for different hotel types [4] - The company promotes a diverse and inclusive workplace, with female employees making up 37.9% and minority employees 8.8% of the workforce [4] Group 3: Customer Experience and Satisfaction - The company emphasizes customer experience, achieving a 97.95% response rate for 24-hour service requests and a 95.37% complaint resolution rate [4] - In 2024, Wanda Hotel's high-star hotels scored 97.05 points on reputation management platforms, with a low negative review rate of 3.03% [5] Group 4: Technological Empowerment and Innovation - Wanda Hotel embraces digital transformation by developing its own digital platform to enhance customer service and operational efficiency [6] - The company has initiated strategic partnerships with leading firms, including Huawei and NIO, to innovate in the hospitality sector [6] Group 5: Philanthropy and Environmental Initiatives - Since 2012, Wanda Hotel has launched the "Wanda Children's Charity Project," establishing 100 love screening rooms and donating nearly 20,000 quality books to rural schools [8] - The company has implemented various green initiatives, with 78 managed hotels receiving green building certifications [10] Group 6: Climate Risk Assessment and Future Commitment - The company has assessed potential climate-related risks based on TCFD recommendations, identifying short-term, medium-term, and long-term risks [10] - The chairman emphasizes a commitment to a sustainable future, focusing on innovation and responsibility as core values [10]

Financial Performance - In 2024, the Group achieved total revenue of HK$990 million, with hotel operations contributing HK$720 million[12]. - The Group's revenue increased by approximately 0.8% to approximately HK$991.4 million for the year 2024, compared to HK$983.1 million in 2023[69]. - Revenue from hotel operation and management services rose by 0.5% to approximately HK$724.3 million in 2024, driven by a 3.9% increase in hotel management services revenue to approximately HK$566.4 million[72]. - Hotel operation income from rooms decreased by 13.0% to approximately HK$58.2 million, primarily due to intense market competition[72]. - Investment properties leasing revenue increased by 5.8% to approximately HK$94.1 million in 2024, attributed to higher average rental rates[72]. - Gross profit decreased to approximately HK$413.5 million, with a gross profit margin of 41.7%, down from 42.6% in 2023[77]. - The segment profit for hotel operation and management services dropped by 26.8% to approximately HK$138.3 million in 2024, primarily due to increased costs and impairment losses[86]. - The segment loss for hotel design and construction management services increased by 177.1% to approximately HK$98.5 million in 2024, attributed to low-margin renovation projects[87]. - The segment profit from investment properties leasing decreased by 10.0% to approximately HK$42.5 million in 2024, mainly due to increased net valuation losses[89]. - The segment loss from trading and leasing of overseas properties plunged by 1,796.4% to approximately HK$1,045.9 million in 2024, primarily due to increased impairment losses[90]. - Other income and gains, net, decreased significantly to approximately HK$25.0 million in 2024 from HK$133.7 million in 2023, mainly due to discontinued interest income from long-term receivables[91]. - Selling and administrative expenses rose by approximately 9.3% to approximately HK$152.1 million in 2024, primarily due to increased advertising and IT service fees[92]. - The Group recorded a loss attributable to equity holders of the Company of approximately HK$590.9 million in 2024[101]. - For the year ended December 31, 2024, the company reported a loss attributable to owners of the parent of HK$590.9 million, a significant decrease from a profit of HK$165.2 million in 2023, representing a change of HK$756.0 million[102]. - Total assets decreased by 21.3% to HK$3,583.7 million in 2024 from HK$4,552.6 million in 2023, while total liabilities increased by 9.7% to HK$1,388.8 million[104]. - Net assets attributable to equity holders of the parent fell by 18.5% to HK$2,070.5 million in 2024 from HK$2,708.0 million in 2023[104]. - Long-term receivables plummeted by 98.4% to approximately HK$29.7 million as of December 31, 2024, down from HK$1,879.0 million in 2023, primarily due to the enforcement of the mortgage on condominium units[105]. - The deferred amount and relevant interest accrued from the Chicago Project amounted to approximately HK$1,938 million, with a significant portion secured by the mortgage on the condominium units[106]. - An impairment loss of approximately HK$984.4 million was recognized as of June 30, 2024, due to the expected credit loss analysis related to the deferred amount[110]. - Following the completion of the delivery of condominium units, properties held for sale were recognized at approximately HK$799.6 million, leading to an impairment loss of approximately HK$1,046 million for long-term receivables[114]. - As of December 31, 2024, the company had no long-term receivables arising from the deferred amount from the Chicago Project, a decrease from HK$1,879.0 million in 2023[115]. - The company engaged Cushman & Wakefield for the valuation of 37 condominium units, using a market approach based on prevailing market sales prices[113]. - The company entered into an enforcement agreement regarding the condominium units, which included various representations and warranties from the debtor and guarantor[111]. - As of December 31, 2024, the Group's cash amounted to approximately HK$382.0 million, an increase from HK$359.2 million as of December 31, 2023, with RMB constituting 95% of total cash[119][120]. - The current ratio improved to 2.27 as of December 31, 2024, compared to 1.16 as of December 31, 2023; excluding the transfer of HK$799.6 million from long-term receivables, the current ratio would be 1.27[120][122]. - The Group had no interest-bearing loans as of December 31, 2024, down from HK$4.3 million as of December 31, 2023[121][122]. - Total debts were nil as of December 31, 2024, compared to HK$4.3 million in 2023, resulting in a net cash position of HK$382.0 million[124][125]. - The Group had no significant investments or material acquisitions during the year[135][139]. Hotel Operations - The Group opened 50 new hotels, increasing the total number of hotels under management to over 200, with a total room capacity exceeding 40,200 rooms[12]. - The Group expanded its hotel network from 157 hotels with 33,900 rooms as of December 31, 2023, to 204 hotels with over 40,200 rooms as of December 31, 2024[23]. - As of December 31, 2024, there were an additional 376 hotels contracted for management that were still under development[23]. - The Group's hotel operations included 4 leased-and-operated hotels, accounting for approximately 2.0% of all hotels in operation[34]. - Managed hotels comprised 190 properties, representing approximately 93.1% of the total hotels in operation[36]. - The Group's hotel brands include ultra-luxury, luxury, and premium categories, targeting various customer segments[29]. - The hotel management model allows property owners to use the Group's brand and requires adherence to brand standards[37]. - The Group's leases typically range from 15 to 20 years, with an initial rent-free period of 2 to 15 months[35]. - The total number of hotel rooms managed by the Group as of December 31, 2024, was 40,200[33]. - The Group's multi-brand strategy aims to cater to distinct customer preferences and needs[28]. - The hotel brands include Wanda Reign, Wanda Vista, Wanda Realm, and others, each offering unique service features[30]. - As of December 31, 2024, the company operated four leased-and-operated hotels, accounting for approximately 2.0% of all hotels in operation[38]. - The company managed 190 hotels, representing about 93.1% of its total operational hotels as of December 31, 2024[39]. - The company had ten franchised hotels, which accounted for approximately 4.9% of all operational hotels as of December 31, 2024[41]. - The occupancy rate for all hotels decreased to 53.9% in 2024 from 55.9% in 2023[46]. - The average daily room rate for all hotels fell to RMB 456 in 2024 from RMB 499 in 2023[47]. - The RevPAR for all hotels decreased by approximately 11.8% to RMB 246 in 2024, down from RMB 279 in 2023[50]. - The occupancy rate for leased-and-operated hotels was 66.5% in 2024, slightly down from 66.9% in 2023[50]. - The average daily room rate for leased-and-operated hotels decreased to RMB 243 in 2024 from RMB 260 in 2023[50]. - The RevPAR for leased-and-operated hotels was RMB 162 in 2024, down from RMB 174 in 2023[50]. - The decline in RevPAR was attributed to a return to rational mass consumption and the explosive growth of limited-service hotels in 2024[51]. - The occupancy rate for all hotels in Q4 2024 was 53.5%, a decrease from 53.9% in Q4 2023[53]. - The average daily room rate for all hotels in Q4 2024 was RMB 418, down from RMB 470 in Q4 2023[55]. - RevPAR for all hotels in Q4 2024 was RMB 224, compared to RMB 253 in Q4 2023, reflecting a decline[55]. - The occupancy rate for leased-and-operated hotels in Q4 2024 was 66.8%, slightly up from 66.2% in Q4 2023[55]. - The average daily room rate for franchised hotels in Q4 2024 was RMB 465, an increase from RMB 398 in Q4 2023[55]. - The average daily room rate for managed hotels in Q4 2024 was RMB 421, down from RMB 483 in Q4 2023[55]. - The company plans to add 54 new hotels in 2025 to expand its hotel network[66]. - The domestic tourist market in the PRC is expected to continue growing in 2025 due to economic recovery and favorable national policies[66]. - The occupancy rate for limited-service hotels in Q4 2024 was 57.8%, down from 59.7% in Q4 2023[53]. Strategic Initiatives - The Group's asset-light strategy was successfully implemented with the completion of Latsavong Wanda Vista Vientiane and Wanda Jin Residences The Ease Sierra Bangkok[13]. - The Group launched "multi-brand" projects in Beijing and Changchun, aiming to create synergies between brands and redefine industry standards[13]. - The strategic partnership with NIO Power integrates premium hospitality with green mobility, promoting sustainable development[17]. - The Group's pre-sale livestream campaign for the "Changbai Mountain Wanda International Resort Snow Season Promotion" set a Guinness World Record for the largest display of hotel orders[14]. - The Group continues to optimize its structure to enhance internationalization and brand excellence[13]. - The Chairman expressed gratitude to shareholders, partners, and employees for their support and emphasized the commitment to innovation and transformation in the hotel industry[18]. - The Group plans to add 54 new hotels by 2025 as part of its expansion strategy[68]. Corporate Governance and Management - Mr. Liu Yingwu appointed as executive director in January 2024, previously served as executive vice president of Wanda Hotel Management Group since March 2024[148]. - Mr. Han Xu has been overseeing all financial operations of Dalian Wanda Group since April 2023, bringing extensive experience in finance and general management[153]. - Mr. Zhang Chunyuan appointed as non-executive director in January 2025, has held various positions within Dalian Wanda Group since September 2008[154]. - Mr. He Zhiping has been an independent non-executive director since March 2018, with a background in mechanical engineering and extensive experience in various companies[158]. - Mr. Liu has extensive experience in commercial planning and design, including hotel design management[151]. - Mr. Ning Qifeng has been the chairman since April 2021 and has rich experience in property development and management[150]. - Dalian Wanda Group has a controlling stake in the Company, indicating strong financial backing and operational support[153]. - The Company is focused on expanding its market presence through strategic appointments and leveraging experienced management[151]. - The management team has a strong educational background, with degrees from reputable institutions such as Hefei University of Technology and Dongbei University of Finance and Economics[149][153]. - The Company is committed to enhancing its operational efficiency and financial performance through experienced leadership and strategic initiatives[156]. - Dr. Teng Bing Sheng has extensive experience in mergers and acquisitions, serving as an independent non-executive director for multiple companies including Yangtze Optical Fibre and Cable Joint Stock Limited Company since January 2020[161]. - Dr. Chen Yan has been a professor in accounting at Dongbei University of Finance and Economics since July 2005, contributing to financial accounting evaluations for various organizations[163]. - Ms. Hui Wai Man has over 35 years of professional experience in public accounting and corporate finance, serving as the company secretary since December 2000[164]. - Dr. Chen served as an independent director for Liaoning SC Technology Co., Limited from March 2018 to December 2023, and has been involved in risk assessment and internal control systems[163]. - Dr. Teng has held various independent director positions in companies listed on both the Hong Kong and Shanghai Stock Exchanges, showcasing his strategic management expertise[162]. - The company has a strong governance structure with independent non-executive directors bringing diverse expertise in finance, accounting, and strategic management[161]. - Dr. Chen is a non-practising member of the Chinese Institute of Certified Public Accountants and has been involved in financial evaluations for national funds since 2015[165]. - Ms. Hui is a fellow member of several accounting and governance institutes, indicating a high level of professional recognition in her field[164]. - The company emphasizes the importance of internal control and risk management, as demonstrated by Dr. Chen's previous roles in assessing internal control systems[165]. - The board of directors includes members with significant academic and practical experience, enhancing the company's strategic decision-making capabilities[161]. Corporate Social Responsibility and Sustainability - The Group has committed to reducing carbon emissions through green building and energy-saving measures, contributing to environmental protection[186]. - The Group has complied with all relevant laws and regulations that significantly impact the Company during the year ended December 31, 2024[187]. - The Group emphasizes a customer-oriented culture, taking 'Customer First' as one of its core values to enhance customer satisfaction[188]. - The Group has established fair and comprehensive employment policies to attract and retain talent, improving staff morale[189]. - The Group recognizes the importance of corporate social responsibility and aims to maintain sound relationships with society[186]. - The Group has introduced eco-friendly measures in its investment property leasing business to promote sustainable development[186]. - The Group emphasizes corporate social responsibility and environmental sustainability through initiatives like green building and energy-saving measures[190]. - The Company prioritizes customer satisfaction and has established mechanisms for handling customer service and complaints[191]. - The Group is committed to employee welfare and aims to improve morale and talent retention through fair employment policies[191]. - The Company has allocated resources to ensure compliance with relevant laws and regulations, maintaining good relationships with regulatory bodies[190]. - The Group has implemented environmental measures to reduce carbon emissions and minimize ecological impact[190]. Dividend Policy - No final dividend was recommended for the year, consistent with the previous year[138][142]. - The Company aims to maintain a sustainable and stable dividend policy, balancing shareholder expectations with prudent capital management[196]. - The dividend policy considers factors such as earnings per share, reasonable return on investment for shareholders, financial conditions, and market sentiment[200]. - The Company will regularly review and reassess its dividend policy and its effectiveness as necessary[200].

Investment Rating - Investment rating for the social services industry is "Positive" (maintained) [1] Core Insights - The report highlights a robust growth in the tourism sector during the May Day holiday, with a significant increase in cross-regional travel demand and a notable rise in high-end hotel bookings [14][20] - The report indicates a strong performance in the trendy toy market, with a 39% year-on-year increase in the number of offline stores and a 17% increase in average store efficiency [27][28] - The Chinese restaurant market, particularly the Chinese noodle shop segment, is projected to grow significantly, with a compound annual growth rate of 11.6% from 2024 to 2029 [34] - The service robotics market is expected to grow rapidly, with a projected market size of 97 billion by 2028, driven by advancements in AI technology and increasing demand for efficient service [44][48] - The domestic beauty market is seeing a trend towards high-end products, with significant upgrades in product formulations and technology [50][51] Summary by Sections 1. Travel and Tourism - The May Day holiday is expected to see a peak in travel demand, with an estimated daily cross-regional flow of over 270 million people [14] - Domestic flight ticket prices have decreased, leading to a 29% increase in search interest among price-sensitive university students [18] - The trend of travel consumption is shifting towards lower-tier cities, with a 25% increase in tourism heat compared to higher-tier cities [18] 2. Trendy Toys - As of March 2025, the number of offline trendy toy stores reached 3,645, marking a 39% year-on-year growth [27] - The average store efficiency for trendy toy stores increased by 17% year-on-year, with significant variations among brands [28] 3. Restaurant Industry - The Chinese noodle shop market is projected to reach a total transaction value of 495.6 billion by 2029, with a compound annual growth rate of 11.6% from 2024 to 2029 [34] - The company "Encounter Small Noodles" achieved a revenue of 1.154 billion in 2024, reflecting a 44.2% year-on-year growth [37] 4. Service Robotics - The service robotics market in China is expected to grow from 30 billion in 2023 to 97 billion by 2028, with a compound annual growth rate of 26.5% [44][48] - The hotel sector is the largest segment within the service robotics market, projected to reach 36 billion by 2028 [45] 5. Beauty Industry - The beauty market is experiencing a shift towards high-end products, with significant upgrades in formulations and technology [50] - The "Giant Biological" brand launched an upgraded collagen stick, which has seen a 32% year-on-year growth in sales [51]

Core Viewpoint - The collaboration between Tongcheng Travel and Wanda Group marks a significant move in the online travel agency (OTA) sector, as Tongcheng plans to acquire Wanda Hotel Management for 2.497 billion, aiming to strengthen its position in the hotel management market amidst increasing competition from platforms like Meituan and Douyin [1][3][7]. Group 1: Acquisition Details - Tongcheng Travel announced the acquisition of 100% equity in Wanda Hotel Management for 2.497 billion, with a valuation of 9.5 times the adjusted EBITDA for 2023, slightly below the industry average [3]. - Wanda Hotel Management operates a light-asset model with nine hotel brands, managing 204 hotels and over 40,200 rooms, with an additional 376 hotels under contract to open [3]. - The acquisition is expected to enhance Tongcheng's competitiveness in the high-end hotel sector, leveraging Wanda's established brand portfolio and experienced management team [3][4]. Group 2: Market Context and Strategy - The hotel supply currently exceeds demand, leading to intensified competition and opportunities for low-cost acquisitions, prompting OTAs to enhance their accommodation offerings [1][2]. - Analysts suggest that OTAs are seeking new growth avenues through hotel acquisitions, which can provide direct operational profits and strengthen market positions through industry chain collaboration [2][7]. - Data indicates that accommodation bookings remain a core revenue source for major OTAs, with Tongcheng's accommodation service revenue reaching 4.7 billion, accounting for 27% of total revenue, and Ctrip's accommodation revenue at 21.6 billion, making up 40% of total revenue, both showing double-digit growth year-on-year [7]. Group 3: Competitive Landscape - The competition in the hotel booking market has intensified, with platforms like Meituan and Douyin capturing significant market share from traditional OTAs [7][10]. - The acquisition strategies of both Tongcheng and Ctrip are seen as essential moves to mitigate competition from emerging players and to control scarce supply resources more effectively [10]. - The future competition in the OTA sector is expected to focus on deepening supply chain integration and enhancing user engagement [10].

Core Viewpoint - Wanda Hotel Development is selling its hotel management business to Tongcheng Travel for approximately 24.97 billion yuan, as part of a strategy to address financial challenges and unlock value in its hotel management segment [4][5][6]. Group 1: Transaction Details - The transaction involves the sale of 100% equity of Wanda Hotel Management (Hong Kong) Limited to Tongcheng Travel's wholly-owned subsidiary [4]. - Wanda Hotel Development expects to net approximately 24 billion HKD from the transaction, which will be proposed to be distributed to shareholders as dividends [4][7]. - The valuation of the hotel management business is set at 9.5 times its adjusted EBITDA for 2023, reflecting current market conditions and comparable company valuations [7]. Group 2: Financial Implications - Based on a 65.04% controlling stake, Wanda Group is expected to recover around 15.6 billion HKD from this sale, which is relatively small compared to its substantial debt obligations [5]. - The company plans to retain the proceeds for general operational funds or future investments, with a significant portion likely flowing to its controlling shareholder, Wanda Group [8][7]. Group 3: Strategic Rationale - Wanda Hotel Development believes that the sale will unlock part of the value of its hotel management segment, especially given the conservative market sentiment towards its investment property leasing business [7]. - Tongcheng Travel sees significant growth potential in the Chinese hotel management market and views the acquisition as a means to enhance its competitiveness in the high-end hotel sector [11]. Group 4: Business Overview - Wanda Hotel Management operates a range of hotel brands, including luxury and high-end options, with a total of 204 hotels currently in operation and over 40,200 rooms [12][13].

Core Viewpoint - Wanda Hotel Development Company demonstrates resilience and growth potential despite macroeconomic fluctuations and intensified industry competition, driven by diversified business layout, refined operational management, and innovative strategies [1] Financial Performance - Total revenue for 2024 is approximately HKD 990 million, with hotel operation revenue around HKD 720 million [2] - The number of managed hotels increased to 204, with a total room count of 40,203 [2] - Revenue per available room (RevPAR) is RMB 246, average daily rate (ADR) is RMB 456, and occupancy rate is 53.9% [2] Membership Growth - The membership ecosystem accelerated, with a total of 17 million members and over 500,000 paying members by the end of 2024 [2] - During the 2024 Double Eleven shopping festival, total sales on the Fliggy platform reached RMB 291 million, a 14% year-on-year increase, maintaining the top position among domestic hotel groups for four consecutive years [2] Global Expansion - In 2024, 50 new hotels opened, bringing the total managed hotels to over 200, extending Wanda's commitment to exceptional service and unique experiences globally [3] - New hotel openings include the "Wanda Wenhua Hotel" in Istanbul and the "Wanda Jin Hua Apartment Hotel" in Bangkok, showcasing Chinese culture and expanding the brand's global footprint [3] Innovation and Efficiency - Wanda Hotel is exploring optimal hotel efficiency solutions through multi-brand strategies in Beijing and Changchun, enhancing service diversity [5] - The company launched the "Jing Sheng Hotel" in collaboration with Tencent Esports and Jingxiang Technology, targeting high-end esports enthusiasts [6] - A partnership with Huawei's HarmonyOS aims to develop a smart hotel ecosystem, starting with a smart model room project in Beijing [6] Sustainability Initiatives - As a leading national hotel brand, Wanda integrates sustainable development into its core strategy, exemplified by a strategic partnership with NIO Energy to combine high-end hotel experiences with smart electric vehicle services [7]

Financial Performance - For the year ended December 31, 2024, total revenue was HKD 991,375,000, a slight increase from HKD 983,068,000 in 2023, representing a growth of approximately 0.3%[4] - The gross profit for the year was HKD 413,467,000, down from HKD 419,021,000 in the previous year, indicating a decrease of about 1.3%[4] - The net loss for the year was HKD 989,408,000, compared to a profit of HKD 191,050,000 in 2023, marking a significant decline[4] - Total comprehensive loss for the year amounted to HKD 1,051,641,000, contrasting with a comprehensive income of HKD 160,016,000 in 2023[5] - The basic and diluted loss per share for the year was HKD (12.6), compared to earnings of HKD 3.5 per share in 2023[4] Asset and Liability Changes - Non-current assets decreased to HKD 1,780,313,000 from HKD 3,791,098,000, reflecting a reduction of approximately 53%[6] - Current assets increased significantly to HKD 1,803,386,000 from HKD 761,509,000, representing an increase of about 137%[6] - Total liabilities increased, with current liabilities rising to HKD 792,923,000 from HKD 654,459,000, an increase of approximately 21%[6] - The company's equity decreased to HKD 2,194,930,000 from HKD 3,286,433,000, indicating a decline of about 33%[7] - Total assets as of December 31, 2024, amounted to HKD 3,583.699 million, with segment assets for hotel operations at HKD 587.755 million[13] Revenue Breakdown - Total revenue for the year ended December 31, 2024, was HKD 991.375 million, with external sales from hotel operations at HKD 724.347 million[13] - Revenue from hotel management services was 566,432 thousand HKD in 2024, up from 545,102 thousand HKD in 2023, indicating a growth of about 3.2%[20] - The company reported a decrease in revenue from major clients, with Client A contributing 241,951 thousand HKD in 2024 compared to 294,759 thousand HKD in 2023, a decline of approximately 17.9%[19] Impairment and Losses - The company reported a substantial increase in financial and contract asset impairment losses, totaling HKD 1,149,024,000, compared to HKD 103,422,000 in the prior year[4] - The impairment loss on property, plant, and equipment was 13,419 thousand HKD in 2024, while there was no such loss reported in 2023[26] - The impairment loss provision for trade receivables increased to 242,330,000 HKD in 2024 from 162,974,000 HKD in 2023, reflecting a significant rise in overdue contracts[39] Operational Metrics - The average occupancy rate for all hotels decreased from 55.9% in 2023 to 53.9% in 2024, representing a decline of about 3.6%[66] - Average daily room rate (ADR) for all hotels fell from RMB 499 in 2023 to RMB 456 in 2024, a decrease of approximately 8.6%[66] - Average revenue per available room (RevPAR) decreased from RMB 279 in 2023 to RMB 246 in 2024, a decline of about 11.8%[68] Employee and Operational Expansion - The group employed approximately 585 full-time employees across China (including Hong Kong) and the United States as of December 31, 2024[102] - The company managed 157 hotels with 33,900 rooms as of December 31, 2023, and plans to expand to 204 hotels with over 40,200 rooms by December 31, 2024[55] Dividends and Recommendations - No final dividend is recommended for the year ending December 31, 2024, consistent with the previous year[50] - The company has no significant post-reporting date events that need to be disclosed[51] Strategic Initiatives - The company employs a multi-brand strategy to cater to different customer preferences and needs[56] - The company plans to expand its hotel network by adding 54 new hotels by 2025, in response to the recovery of the domestic tourism market in China[73]

Core Viewpoint - The partnership between Wanda Hotels and Huawei aims to advance the digital and intelligent transformation of the hotel industry through the implementation of Huawei's HarmonyOS smart home solutions, starting with a model room project at the Wanda Jin Hua Hotel in Beijing [1][3]. Group 1: Partnership Development - Wanda Hotels and Huawei signed a cooperation framework agreement to promote the construction of a smart hotel ecosystem [1]. - The collaboration marks a new phase in their partnership, focusing on smart hotel scene design, digital standard formulation, and the application of whole-home intelligent technology [3]. - This partnership is a significant milestone in Wanda's digital transformation, enhancing guest experience while achieving cost reduction and green operations [3]. Group 2: Smart Hotel Features - The model room at Beijing Dongba Wanda Jin Hua Hotel utilizes Huawei's HarmonyOS solutions to provide a seamless living experience, allowing guests to control lighting, temperature, and curtains through a central control screen [5]. - AI sensors can detect human activity and automatically switch between various scene modes such as welcome, sleep, and entertainment [6]. - The integration of smart screens and sound systems creates an immersive environment, embodying the concept of "invisible technology and boundaryless service" [6]. Group 3: Industry Impact - The collaboration aims to standardize the entire process from design and construction to operational services in the hotel industry [8]. - Future expansions will include smart elevator control and robotic services, with an open platform to integrate more ecosystem partners [8]. - As consumer demand for immersive experiences and sustainable travel increases, the focus of hotel intelligence has shifted from mere equipment updates to the reconstruction of space operations [8].

Hotel Network Expansion - The Group expanded its hotel network from 157 hotels with over 33,900 rooms as of December 31, 2023, to 174 hotels with over 36,600 rooms as of June 30, 2024[6]. - An additional 360 hotels have been contracted for management but are still under development and have not commenced operation as of June 30, 2024[6]. - The Group plans to add 42 new hotels in 2024 to expand its hotel network[79]. Hotel Management and Operations - The Group operates hotels under three models: leased-and-operated, managed, and franchised[6]. - The hotel management services are provided by Wanda Hotel Management Group, a leading hotel services provider in the PRC[5]. - The hotel business segment includes hotel operation and management services, hotel design, and construction management services[5]. - The Group's comprehensive capabilities in hotel management and operation support its growth strategy in the hospitality sector[5]. - The Group's strategic focus includes enhancing customer experience through a multi-brand strategy targeting distinct customer segments[9]. - The company is responsible for recruiting and training hotel staff in leased-and-operated hotels, while hotel owners bear the costs of developing and operating managed hotels[18][22]. - The company offers training, reservation, and support services to franchised hotels, ensuring they operate under brand standards[24][26]. Financial Performance - The financial performance for the six months ended June 30, 2024, will be detailed in the financial review section of the report[1]. - Revenue for the six months ended June 30, 2024, was HK$492,954,000, an increase from HK$464,089,000 in the same period of 2023, representing a growth of approximately 6%[121]. - The Group reported revenue of approximately HK$493.0 million for the Period, representing a 6.2% year-on-year increase over the corresponding period in 2023[38]. - Revenue from hotel operation and management services increased by 7.7% to approximately HK$361.5 million, driven by an increase in the number of hotels under management[40]. - Hotel management service revenue rose by 8.5% to approximately HK$275.6 million, compared to approximately HK$254.1 million for the corresponding period in 2023[40]. - The Group reported a loss attributable to equity holders of approximately HK$514.9 million, a significant decrease from a profit of HK$140.0 million in the same period of 2023, representing a change of HK$654.9 million[69]. - The net loss for the period was HK$895,591,000, compared to a profit of HK$165,133,000 in the same period last year, reflecting a significant decline[121]. Key Performance Indicators - Revenue per available room (RevPAR) is a key performance indicator frequently reviewed by senior management, influenced by occupancy rates and average daily rates[28]. - RevPAR decreased by approximately 9.6% to RMB 244 compared to RMB 270 in the corresponding period in 2023[30]. - Occupancy rate for all hotels was 51.1%, down from 53.4% in 2023[30]. - Average daily room rate for all hotels was RMB 478, a decrease from RMB 507 in 2023[30]. - In Q2 2024, occupancy rate for all hotels was 53.0%, compared to 55.7% in Q2 2023[33]. - Average daily room rate in Q2 2024 for all hotels was RMB 453, down from RMB 495 in Q2 2023[33]. - Franchised hotels had a RevPAR of RMB 140 in Q2 2024, down from RMB 205 in Q2 2023[34]. Cost and Expenses - The cost of sales rose by 13.6% to approximately HK$273.8 million, with hotel operation and management services costs increasing by 14.1% to approximately HK$193.2 million[43]. - Hotel operation income from rooms of four leased-and-operated hotels decreased by 14.3% to approximately HK$28.5 million due to intense market competition[40]. - Hotel operation and management services costs increased by 14.1% to approximately HK$193.2 million, driven by an increase in employee headcount[44]. - Selling and administrative expenses decreased by 7% to approximately HK$62.9 million during the Period, compared to HK$67.6 million for the corresponding period in 2023[63]. - The ratio of selling and administrative expenses over revenue decreased to 12.8% for the Period from 14.6% for the corresponding period in 2023[63]. Assets and Liabilities - Total assets as of June 30, 2024, were approximately HK$3,543.2 million, down from HK$4,552.6 million as of December 31, 2023, indicating a decrease of 22.1%[70]. - The Group's net assets attributable to equity holders of the parent decreased to HK$2,335.6 million as of June 30, 2024, from HK$3,286.4 million as of December 31, 2023, a decline of 29.0%[70]. - The Group maintained a net cash position as of June 30, 2024, with total debts of HK$2,479 million and cash and bank balances of HK$368.1 million[74]. - The Group's interest-bearing loans decreased to approximately HK$2.5 million as of June 30, 2024, from HK$4.3 million as of December 31, 2023[72]. - The Group's total liabilities decreased by $910,939,000, reflecting a strategic focus on reducing debt[127]. Shareholder Information - Mr. He Zhiping holds a long position of 150,000,000 shares in Dalian Wanda Commercial Management Group Co., Ltd, representing approximately 0.55% of the issued share capital[81]. - The Group will continue to prudently seek profitable investment opportunities to enhance profitability and maximize shareholder returns[79]. - The company has disclosed that no directors or key executives hold any interests or short positions in the company's shares as of June 30, 2024[88]. - The beneficial ownership of shares by Wang Jianlin is noted, although specific numbers are not provided in the documents[91]. Corporate Governance - The Company has adopted the Model Code as its own code of conduct regarding securities transactions by the Directors, with all Directors confirming compliance during the Period[107]. - The Company has complied with the Corporate Governance Code during the Period, except for a deviation from code provision C.2.1[108]. - Mr. Ning has been serving as both Chairman and acting CEO, which deviates from the Corporate Governance Code, but the Board believes this structure facilitates effective execution of business strategies[109]. - The Board comprises one other executive Director, two non-executive Directors, and three independent non-executive Directors, ensuring a balanced power structure[109]. Impairment and Valuation - The Group recognized an impairment loss of approximately HK$984.4 million (or approximately USD126 million) based on the value of 37 condominium units mortgaged to the Group[60]. - The provision for impairment of long-term receivables increased to HK$1,068,433,000 as of June 30, 2024, from HK$84,500,000 at the beginning of the year[168]. - The Group reported no valuation gain or loss on investment properties during the period, contrasting with a net valuation loss of approximately HK$1.1 million in the same period last year[48]. Future Outlook - Future outlook includes continued expansion in hotel management and potential new market entries[5]. - The Group expects the domestic tourist market in the PRC to continue growing in the coming years due to economic recovery[79].

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 492,954,000, an increase of 6.2% compared to HKD 464,089,000 for the same period in 2023[1] - Gross profit decreased to HKD 219,134,000, down 1.9% from HKD 222,985,000 year-on-year[1] - The company reported a net loss of HKD 895,591,000 for the six months ended June 30, 2024, compared to a profit of HKD 165,133,000 in the same period of 2023[2] - The company reported a pre-tax loss of HKD 869,311,000 for the six months ended June 30, 2024, compared to a profit of HKD 205,160,000 for the same period in 2023[12] - The group recorded no investment property valuation gains or losses during the period, contrasting with a net valuation loss of approximately HKD 1,100,000 in the same period last year[58] - The company reported a loss attributable to equity holders of approximately HKD 514.9 million for the six months ended June 30, 2024, compared to a profit of HKD 140.0 million in the same period of 2023, representing a change of HKD (654.9 million)[68] Assets and Liabilities - Total assets as of June 30, 2024, were HKD 2,768,784,000, down from HKD 3,791,098,000 as of December 31, 2023[4] - Total assets decreased to HKD 3,543.2 million as of June 30, 2024, down from HKD 4,552.6 million as of December 31, 2023[69] - The net asset value of the company decreased to HKD 2,335,632,000 from HKD 3,286,433,000 at the end of 2023[5] - The company's net asset value was HKD 2,335.6 million as of June 30, 2024, compared to HKD 3,286.4 million as of December 31, 2023[69] - Current liabilities decreased to HKD 595,245,000 from HKD 654,459,000 at the end of 2023[5] - The total liabilities as of June 30, 2024, were HKD 1,207,577,000, a decrease from HKD 1,266,174,000 as of December 31, 2023[12] Revenue Segments - The hotel operations and management services segment generated revenue of HKD 361,537,000, up from HKD 335,718,000, reflecting a growth of about 7.5%[12] - Revenue from hotel management services for the six months ended June 30, 2024, was HKD 275,618,000, compared to HKD 254,050,000 in the same period of 2023, marking an increase of approximately 8.5%[17] - The investment property leasing segment reported a profit of HKD 35,350,000, compared to HKD 26,517,000 in the previous year, indicating a significant increase of approximately 33.5%[12] - The investment property leasing revenue increased by 7.5% to approximately HKD 47.2 million, attributed to higher average rents during the period[54] Costs and Expenses - Financing costs decreased slightly to HKD 10,461,000 from HKD 11,056,000 year-on-year[2] - The total cost of services provided rose to 228,380 thousand from 202,902 thousand, an increase of about 12.5%[20] - Selling and administrative expenses decreased by 7% to approximately HKD 62,900,000, with the ratio to revenue dropping from 14.6% to 12.8%[65] - Income tax expense for the period totaled 26,280 thousand, down from 40,027 thousand, a decrease of about 34.2%[21] Operational Metrics - The average occupancy rate for all hotels decreased to 51.1% in 2024 from 53.4% in the same period of 2023, indicating a decline in demand[47][48] - Average daily room rate (ADR) for all hotels was RMB 478 in 2024, down from RMB 507 in 2023, reflecting pricing pressures in the market[47][48] - Average revenue per available room (RevPAR) fell approximately 9.6% to RMB 244 in 2024 from RMB 270 in the same period of 2023, primarily due to lower occupancy and ADR[48] - The average occupancy rate for managed hotels was 42.7% in 2024, down from 51.5% in 2023, indicating challenges in this segment[48] - The average daily room rate for managed hotels was RMB 488 in 2024, compared to RMB 522 in 2023, showing a decrease in pricing power[48] Hotel Network and Expansion - The hotel network expanded from 157 hotels with over 33,900 rooms as of December 31, 2023, to 174 hotels with over 36,600 rooms by June 30, 2024[38] - The company plans to expand its hotel network by adding 42 new hotels in 2024, anticipating growth in the domestic tourism market in China[79] - The company has 360 additional hotels under signed management agreements that are still in development and not yet opened[38] Legal and Governance - The company is involved in a legal dispute with a hotel owner claiming approximately 11,800,000 RMB (about 12,929,000 HKD) for breach of contract, with the outcome still uncertain[35] - The audit committee has been established in accordance with corporate governance codes to review the group's financial data and risk management systems[84] - The audit committee consists of three independent non-executive directors, including Mr. He Zhiping, Dr. Teng Bing Sheng, and Dr. Chen Yan[84] Employee and Dividend Information - The company employed approximately 756 full-time employees across China, Hong Kong, and the United States as of June 30, 2024[77] - No interim dividend was recommended for the period ended June 30, 2024[78]