SINGAPORE and SHANGHAI, China, May 06, 2024 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World”, “we” or “our”) a key player in the global hotel industry, today announced that it will schedule to release its unaudited financial results for the first quarter of 2024 on Friday, May 17, 2024 (Hong Kong time), after the trading hours of The Stock Exchange of Hong Kong Limited and before the opening of the U.S. market. H World’s management will host a conference call at 9 p.m. (U.S ...

SHANGHAI, China, April 30, 2024 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ:HTHT, the "Company" or "H World"))), a key player in the global hotel industry, today announced that it has completed its previously announced put right offer relating to its 3.00% Convertible Senior Notes due 2026 (CUSIP No. 44332NAB2) (the "Notes"). The put right offer expired at 5:00 p.m., New York City time, on Monday, April 29, 2024. Based on information from Wilmington Trust, National Association as the paying agent for ...

Financial Regulations and Compliance - As of December 31, 2023, a total of RMB1,029 million (US$145 million) was not distributable in the form of dividends due to PRC regulations[193] - The share capital of PRC subsidiaries amounted to RMB2,809 million (US$396 million) as of December 31, 2023, which is considered restricted[193] - Current PRC laws permit subsidiaries to pay dividends only out of accumulated profits, which are determined according to PRC accounting standards[193] - PRC regulations may limit the ability to inject capital into PRC subsidiaries and restrict profit distribution[189] - The company is subject to PRC withholding tax on dividends if treated as a PRC resident enterprise, which could be 10% for non-PRC resident enterprises[202] - If classified as a PRC resident enterprise, the company may be subject to a 25% PRC income tax on worldwide income[205] - The company must comply with foreign exchange regulations for any offshore funds used to finance PRC entities[197] - The ability to make loans or additional capital contributions to PRC subsidiaries is subject to PRC regulatory requirements, which may delay or prevent such actions[196] Audit and Regulatory Risks - The SEC identified the company as a "Commission-Identified Issuer" on May 26, 2022, which may lead to trading prohibitions if audit reports are not compliant for two consecutive years[208] - The PCAOB announced on December 15, 2022, that it can inspect and investigate audit firms in mainland China and Hong Kong, which affects the company's status under the HFCA Act for fiscal years 2022 and 2023[209] - The PCAOB's ability to inspect audit firms is contingent on the cooperation of PRC authorities, and any obstruction could lead to new determinations affecting the company's trading status[209] Operational Structure and Control - The company operates primarily through subsidiaries in China and Europe, and its financial results are consolidated under U.S. GAAP despite not holding direct equity interests in its operating entities[221] - The contractual arrangements with the Consolidated Affiliated Entities may not provide as effective control as direct ownership, potentially impacting operational control[218] - The company relies on nominee shareholders for the Consolidated Affiliated Entities, which may lead to conflicts of interest that could adversely affect business operations and financial condition[225] - The company may face substantial costs and limitations if it exercises the option to acquire equity ownership of the Consolidated Affiliated Entities, including potential tax liabilities[223] - The current industry entry clearance requirements for foreign investment in the PRC include a Negative List where foreign stakes in certain sectors are restricted, impacting the company's operations[213] - The company’s ability to enforce contractual arrangements in China may be limited due to uncertainties in the legal framework, which could affect control over the Consolidated Affiliated Entities[222] Market and Trading Dynamics - The company’s listing in Hong Kong may not provide sufficient liquidity, and trading prohibitions could impair the ability to sell or purchase ADSs[208] - The market price for the company's ADSs has been volatile, ranging from a low of US$33.03 to a high of US$52.49 on the NASDAQ in 2023[233] - The ordinary shares on the Hong Kong Stock Exchange experienced a high of HK$41.45 and a low of HK$25.9 in 2023[233] - The trading market for the company's ordinary shares on the Hong Kong Stock Exchange may not be sustained, affecting liquidity and market price[237] Financial Performance and Projections - In 2023, the company recorded operating income of RMB4,714 million and net income attributable to H World Group Limited of RMB4,085 million (US$575 million) after experiencing significant operating losses in 2021 (RMB465 million) and 2022 (RMB1,821 million) due to COVID-19[245] - The company anticipates that its current cash and cash equivalents, along with expected cash flow from operations, will be sufficient to meet working capital needs for at least the next 12 months[243] - The company may require additional cash resources for strategic acquisitions or expansions, which could lead to the sale of additional equity or debt securities[243] - The volatility in market prices may be influenced by factors such as quarterly operating results, changes in financial estimates, and conditions in the travel and lodging industries[234] Shareholder and Corporate Governance - The founder and co-founders collectively owned approximately 31.3% of the outstanding ordinary shares as of March 31, 2024, which may lead to conflicts of interest and influence over significant corporate actions[250] - The company's articles of association contain anti-takeover provisions that could limit opportunities for shareholders to sell their shares at a premium[268] - The board of directors has the authority to issue preferred shares, which could adversely affect the rights of ordinary shareholders and the market price of ADSs[269] Business Expansion and Development - The hotel network expanded from 7,830 hotels as of December 31, 2021, to 9,394 hotels as of December 31, 2023, representing a CAGR of 9.5%[293] - As of December 31, 2023, the company had 912,444 hotel rooms across its 9,394 hotels, with an additional 3,098 hotels under development[293] - The company completed the acquisition of CitiGO in May 2021, expanding its hotel brand portfolio[291] - The company operates a multi-brand strategy with over 20 distinct hotel brands targeting various market segments[294] - The company has a pipeline of 3,098 hotels under development, which includes leased, owned, manachised, and franchised hotels[328] Technology and Innovation - The proprietary technology infrastructure supports operational efficiency and enhances customer experience, contributing to the company's growth[296] - The company has developed the first in-house large-scale fully automated revenue management system in China's hotel industry, which adjusts room rates based on real-time demand forecasts[363] - The centralized procurement system has enabled the company to efficiently manage operating costs and facilitate bulk purchases across its hotel network[364] - The company has implemented a cloud-based property management system that optimizes hotel occupancy rates and revenues generated per available room[365] - The company has deployed smart robots across its hotels to enhance operational efficiency and guest experience[368] Sustainability and Compliance - The company promotes sustainability through modular construction, reducing construction waste and improving quality control[385] - By the end of 2023, over 30% of the company's leased and owned hotel properties were equipped with air source heat pumps, and nearly 10% had adopted solar water heating systems[385] Legal and Administrative Matters - As of December 31, 2023, the company had several pending legal and administrative proceedings, including lease contract disputes and labor disputes, with no accrued contingencies remaining[383] - There are significant legal obstacles in China that may hinder the pursuit of shareholder claims or regulatory investigations common in the U.S.[278] - The time required for the exchange between ordinary shares and ADSs may be longer than expected, affecting investors' ability to settle or effect sales[282] Customer Engagement and Loyalty - The H Rewards loyalty program surpassed 228 million members as of December 31, 2023, with approximately 73% of room nights sold to H Rewards members in 2023[295] - In 2023, approximately 78% of room nights were sold through the company's own sales channels, while 22% were sold through intermediaries[375] Insurance and Risk Management - The company has adequate property and liability insurance policies, but cannot guarantee franchisee compliance, which may expose it to significant financial risks[382]

Investment Rating - The report maintains a "Buy" rating for the company [1][10]. Core Insights - The company reported Q4 2023 earnings with revenue of 5.59 billion CNY, a year-on-year increase of 50.7%, and an adjusted net profit of 660 million CNY, marking a turnaround from losses [1]. - The revenue growth in Q4 exceeded expectations, driven by a strong recovery in domestic RevPAR, with LH revenue at 4.38 billion CNY (+59.0%) and DH revenue at 1.20 billion CNY (+26.6%) [1]. - The company anticipates a revenue growth of 12% to 16% in Q1 2024 and a full-year growth guidance of 8% to 12% [1]. - The company plans to open 1,800 new hotels in 2024, with a net opening target of 1,150 hotels, reflecting a 35% increase from the previous year [1]. Summary by Sections Financial Performance - Q4 2023 adjusted EBITDA reached 1.27 billion CNY, a significant increase of 219% year-on-year, with an adjusted EBITDA margin of 22.7% [1]. - The company expects adjusted net profits of 4.56 billion CNY, 5.48 billion CNY, and 6.17 billion CNY for 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 20.5, 17.0, and 15.1 [4][7]. Revenue Growth - The company achieved a revenue of 21.88 billion CNY in 2022, with a growth rate of 57.9%, and forecasts revenue of 24.47 billion CNY in 2024, representing an 11.8% growth [4][7]. - The RevPAR recovery for LH and DH reached 120% and 111% of 2019 levels respectively, indicating strong demand recovery [1]. Expansion Strategy - The company has a robust pipeline with 3,098 hotels planned for opening, indicating a strong growth trajectory [1]. - The focus on enhancing service quality and customer experience aligns with current consumer trends towards experiential services [1].

H World Group Limited (NASDAQ:HTHT) Q4 2023 Results Conference Call March 20, 2024 9:00 PM ET Company Participants Jason Chen - Investor Relations Director Ji Qi - Chairman Hui Jin - Chief Executive Officer Jun Zou - Executive VP & CFO Conference Call Participants Dan Xu - Morgan Stanley Simon Cheung - Goldman Sachs Ronald Leung - Bank of America Sijie Lin - CICC Lydia Ling - Citi Operator Good day, and thank you for standing by. Welcome to H World Fourth Quarter and Full Year 2023 Earnings Conference Call. ...

Full Year RevPAR in China Recovered to 122% of the 2019 LevelSINGAPORE and SHANGHAI, March 20, 2024 /PRNewswire/ -- H World Group Limited ("H World" or "the Group", NASDAQ: HTHT and HKEX: 1179) announced its unaudited financial results for the fourth quarter ("Q4 2023") and full year ended December 31, 2023.Strong Recovery Momentum in Legacy-Huazhu: RevPAR of 2023 Recovers to 122% of 2019 Levels The Interior of the Newly Launched Ji Hotel 5.0 Supported by the sustained recovery in both leisure and busi ...

H World Group (HTHT) came out with quarterly earnings of $0.33 per share, beating the Zacks Consensus Estimate of $0.31 per share. This compares to loss of $0.06 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 6.45%. A quarter ago, it was expected that this hotel operator would post earnings of $0.49 per share when it actually produced earnings of $0.56, delivering a surprise of 14.29%.Over the last four quarters, the company ...

Hotel Operations - As of December 31, 2023, H World Group operated a total of 9,394 hotels and 912,444 hotel rooms[1] - The company operates 11% of its hotel rooms under the lease and ownership model, while 89% are under the manachise and franchise model[53] - As of December 31, 2023, the total number of operational hotels reached 9,263, with an additional 3,061 hotels in the pipeline[72] - The company temporarily closed 18 hotels in Q4 2023 for brand upgrades and business model changes[71] - The company added 2 hotels in Q4 2023, bringing the total number of hotels to 131 as of December 31, 2023[85] - The total number of rooms as of December 31, 2023, was 26,814, with 37 unopened hotels in the pipeline[85] - The company has 21 unopened hotels in the pipeline for leased hotels as of December 31, 2023[85] Financial Performance - Revenue for Q4 2023 was RMB5.6 billion (US$786 million), a 50.7% year-over-year increase, surpassing the guidance of 41%-45%[2] - For the full year 2023, revenue reached RMB21.9 billion (US$3.1 billion), a 57.9% increase from 2022[18] - Net income attributable to H World in Q4 2023 was RMB743 million (US$105 million), compared to a net loss of RMB124 million in Q4 2022[3] - For the full year 2023, net income attributable to H World Group Limited was RMB4.1 billion, a recovery from a net loss of RMB1.8 billion in 2022[37] - Operating cash inflow for the full year 2023 was RMB7.7 billion, significantly higher than RMB1.6 billion in 2022, demonstrating improved cash generation capabilities[41] - Net income attributable to H World Group Limited increased significantly from a loss of RMB 124 million in 2022 to a profit of RMB 1,337 million in 2023[67] - Adjusted EBITDA rose dramatically from RMB 398 million in 2022 to RMB 2,186 million in 2023, reflecting a substantial growth of 449%[67] Revenue and Growth Expectations - H World expects revenue growth of 12%-16% for Q1 2024 and 8%-12% for the full year 2024[6] - The company plans to open approximately 1,800 hotels and close around 650 hotels in 2024[6] - The company plans to continue expanding its hotel portfolio and enhancing operational efficiency to drive future growth[60] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[64] Operating Costs and Expenses - Hotel operating costs in Q4 2023 were RMB4.0 billion, an increase from RMB3.4 billion in Q4 2022 and RMB3.6 billion in Q3 2023, with a year-over-year increase of 17.6% attributed to business recovery and less rental reduction[25] - For the full year 2023, hotel operating costs totaled RMB14.3 billion, up from RMB12.3 billion in 2022, with costs from the Legacy-Huazhu segment representing 60.4% of revenue compared to 86.1% in 2022[26] - Selling and marketing expenses in Q4 2023 were RMB326 million, compared to RMB169 million in Q4 2022, reflecting a year-over-year increase of 92.3% due to higher commissions and promotional expenses[26] - General and administrative expenses in Q4 2023 were RMB644 million, up from RMB440 million in Q4 2022, with the increase mainly due to higher personnel costs[27] Key Performance Indicators - Legacy-Huazhu's RevPAR recovered to 122% of the 2019 level in 2023, driven by strong leisure and business travel demand[15] - Legacy-DH achieved a 14.5% year-over-year RevPAR increase in 2023, with a focus on transforming to a more asset-light model[15] - Average daily room rate for leased and owned hotels improved by 36.9% year-over-year, rising from RMB 272 to RMB 372[77] - The occupancy rate for leased and owned hotels increased by 18.9 percentage points, from 63.9% in 2022 to 82.8% in 2023[77] - RevPAR for leased and owned hotels surged by 77.4%, increasing from RMB 174 in 2022 to RMB 308 in 2023[77] - Same-hotel RevPAR for the quarter ended December 31, 2023, increased by 40.8% year-over-year to $230[82] - Same-hotel occupancy rate for the quarter ended December 31, 2023, improved to 81.2%, a year-over-year increase of 13.9 percentage points[82] - Same-hotel ADR for the quarter ended December 31, 2023, was $248, reflecting a year-over-year increase of 24.1%[82] - The company reported a same-hotel occupancy rate of 84.3% for the year ended December 31, 2023, up 15.2 percentage points year-over-year[84] - The RevPAR for leased hotels increased by 20.9% year-over-year to €74 for the full year ended December 31, 2023[88] Assets and Liabilities - Total current assets increased from RMB 9,178 million in 2022 to RMB 12,056 million in 2023, representing a growth of 31%[57] - Total assets rose from RMB 61,507 million in 2022 to RMB 63,532 million in 2023, an increase of 3%[57] - Total liabilities decreased from RMB 52,704 million in 2022 to RMB 51,283 million in 2023, a reduction of 3%[57] - H World reported cash and cash equivalents of RMB 6,946 million as of December 31, 2023, up from RMB 3,583 million in 2022, a growth of 94%[57] Non-GAAP Measures - Adjusted EBITDA (non-GAAP) for Q4 2023 was RMB1.3 billion (US$178 million), up from RMB398 million in Q4 2022[5] - Adjusted EBITDA is used to assess the operating results of hotels, excluding share-based compensation expenses and gains or losses from fair value changes of equity securities[48] - H World believes that adjusted EBITDA provides a clearer picture of financial performance, as it excludes significant volatility from fair value changes of equity securities[48] - H World emphasizes the importance of non-GAAP financial measures for internal comparisons and investor transparency[50]

Core Viewpoint - H World Group Limited reported significant financial growth for the fourth quarter and full year of 2023, with substantial increases in hotel turnover, revenue, and net income, indicating a strong recovery in the hotel industry post-pandemic [1][24]. Financial Performance - Hotel turnover increased by 55.0% year-over-year to RMB20.4 billion in Q4 2023, and by 65.9% for the full year [1]. - Revenue for Q4 2023 was RMB5.6 billion (US$786 million), a 50.7% year-over-year increase, surpassing previous guidance [1][9]. - Full year revenue reached RMB21.9 billion (US$3.1 billion), representing a 57.9% increase compared to 2022 [1][9]. - Net income attributable to H World was RMB743 million (US$105 million) in Q4 2023, compared to a net loss of RMB124 million in Q4 2022 [23]. - For the full year, net income was RMB4.1 billion (US$575 million), recovering from a net loss of RMB1.8 billion in 2022 [24]. Operational Highlights - As of December 31, 2023, H World operated 9,394 hotels with 912,444 rooms, including 131 hotels from Legacy-DH [2][35]. - The Legacy-Huazhu segment opened 460 hotels in Q4 2023 and had 3,061 hotels in the pipeline [2][3]. - The average daily room rate (ADR) for Legacy-Huazhu was RMB284 in Q4 2023, up from RMB240 in Q4 2022 [4]. - The occupancy rate for Legacy-Huazhu hotels was 80.5% in Q4 2023, compared to 66.2% in Q4 2022 [4]. Segment Performance - Revenue from the Legacy-Huazhu segment in Q4 2023 was RMB4.4 billion, a 59.0% year-over-year increase [1][9]. - Legacy-DH segment revenue for Q4 2023 was RMB1.2 billion, a 26.6% year-over-year increase [1][9]. - Adjusted EBITDA for the full year 2023 was RMB6.9 billion (US$966 million), compared to RMB610 million in 2022 [26]. Future Guidance - For Q1 2024, H World expects revenue growth of 12%-16% compared to Q1 2023 [28]. - For the full year 2024, revenue growth is anticipated in the range of 8%-12% [28]. - The company plans to open around 1,800 hotels and close approximately 650 hotels in 2024 [28].

H World Group Limited (HTHT) is scheduled to report fourth-quarter 2023 results on Mar 20. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 14.3%.Q4 EstimatesThe Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at 31 cents, up 616.7% year over year. In the past 30 days, estimate revisions have been unchanged. In the last reported quarter, HTHT registered a loss of 6 cents. The consensus mark for revenues is pegged at $760 million, suggesting a 41.5 ...