GreenTree(US:GHG)2024-08-16 20:08Financial Performance - Total revenues decreased by 20.5% year over year to RMB 329.7 million (US$45.4 million) in Q2 2024[7] - Net income was RMB 62.3 million (US$8.6 million), down from RMB 101.9 million in Q2 2023[7] - Adjusted EBITDA (non-GAAP) decreased 34.5% year over year to RMB 83.1 million (US$11.4 million)[7] - Gross profit for the second quarter of 2024 was RMB 131.4 million (US$18.1 million), reflecting a 22.8% year-over-year decrease, with a gross margin of 39.8%[31] - Net income for the second quarter of 2024 was RMB 62.3 million (US$8.6 million), down from RMB 101.9 million in the same quarter of 2023, resulting in a net margin of 18.9%[34] - Adjusted EBITDA for the second quarter of 2024 was RMB 83.1 million (US$11.4 million), a year-over-year decrease of 34.5%[37] - Core net income for the second quarter of 2024 was RMB 70.2 million (US$9.7 million), a year-over-year increase of 2.4%[38] - Net income attributable to ordinary shareholders for the quarter was RMB 61,690,274, down 40.2% from RMB 103,255,064 in the same quarter last year[64] - The company reported a net earnings per share of RMB 0.61 for the quarter, compared to RMB 1.01 in the same quarter of 2023, reflecting a decline of 39.6%[64] - Comprehensive income attributable to ordinary shareholders for the quarter was RMB 61,202,418, down from RMB 97,288,262 in the same quarter of 2023, a decline of 37.1%[64] Revenue Breakdown - Restaurant revenues were RMB 65.3 million (US$9.0 million), a 37.8% year-over-year decrease[17] - Total revenues from leased-and-operated hotels and restaurants were RMB 149.2 million (US$20.5 million), a 28.9% year-over-year decrease[18] - Total revenues from franchised-and-managed hotels and restaurants were RMB 160.0 million (US$22.0 million), an 11.2% year-over-year decrease[21] - Total revenues for the quarter ended June 30, 2024, were RMB 329,711,656, a decrease of 20.5% compared to RMB 414,989,569 for the same quarter in 2023[63] - Total revenues for the quarter ended June 30, 2024, were RMB 264,603,069, a decrease of 14.8% compared to RMB 310,615,960 in the same quarter of 2023[66] - Leased-and-operated revenues for the six months ended June 30, 2024, increased to RMB 228,393,613, up 6.0% from RMB 213,563,927 in the same period of 2023[66] - Total revenues for the restaurant business for the quarter ended June 30, 2024, were RMB 65,293,568, a decrease of 37.9% compared to RMB 104,939,572 in the same quarter of 2023[68] Operational Metrics - The occupancy rate was 72.5%, down from 77.8% in Q2 2023[8] - Revenue per available room (RevPAR) was RMB 125, a 10.8% year-over-year decrease[8] - The average daily room rate was RMB 173, a decrease of 4.3% from RMB 181 in Q2 2023[8] - The company opened 44 hotels and had a pipeline of 1,022 hotels contracted for or under development as of June 30, 2024[8] - Total hotels in operation increased to 4,272 as of June 30, 2024, up from 4,108 in the same period last year, representing a growth of 4%[77] - The occupancy rate for leased-and-owned hotels dropped to 70.7% in Q2 2024 from 74.6% in Q2 2023[77] - Average daily rate for franchised hotels decreased to RMB 171 in Q2 2024, down from RMB 179 in Q2 2023[77] - Total hotel rooms in operation rose to 312,734 as of June 30, 2024, compared to 303,387 a year earlier, marking a 3.5% increase[77] - The number of franchised hotels grew to 4,210 in Q2 2024, up from 4,043 in Q2 2023, indicating a growth of 4.1%[77] Cost Management - Operating costs for the second quarter of 2024 were RMB 198.3 million (US$27.3 million), a 19.0% year-over-year decrease[25] - Hotel operating costs decreased by 4.5% year-over-year to RMB 143.4 million (US$19.7 million) due to lower personnel costs and material consumption[25] - Restaurant operating costs saw a significant decrease of 42.0% year-over-year to RMB 55.1 million (US$7.6 million) primarily due to the closure of L&O stores[26] - General and administrative expenses increased by 13.7% year-over-year to RMB 61.5 million (US$8.5 million), with hotel G&A expenses rising by 23.6%[28] - Operating costs and expenses for the quarter were RMB 281,842,514, a decrease of 14.0% from RMB 327,885,996 in the same quarter of 2023[63] - Operating costs and expenses for the quarter ended June 30, 2024, were RMB 217,716,997, an increase of 2.0% from RMB 213,335,047 in the same quarter of 2023[66] Asset and Equity Management - Total current assets increased from RMB 1,626,759,605 on December 31, 2023, to RMB 1,768,547,807 on June 30, 2024, reflecting a growth of approximately 8.7%[60] - Total liabilities decreased from RMB 3,586,765,383 on December 31, 2023, to RMB 3,533,705,343 on June 30, 2024, indicating a reduction of about 1.5%[61] - Shareholders' equity rose from RMB 1,480,033,495 on December 31, 2023, to RMB 1,589,680,395 on June 30, 2024, representing an increase of approximately 7.4%[61] - Cash and cash equivalents increased significantly from RMB 765,547,547 to RMB 1,374,876,965, a growth of about 80%[60] - GreenTree's total assets increased from RMB 5,066,798,878 on December 31, 2023, to RMB 5,123,385,738 on June 30, 2024, reflecting a growth of approximately 1.1%[60] Strategic Initiatives - The company revised its revenue guidance for the hotel business in 2024 to remain flat compared to 2023 due to strategic decisions and lease expirations[44] - A cash dividend of US$0.10 per ordinary share has been approved for distribution to shareholders[45] - The company emphasizes its commitment to future growth strategies and market expansion in the hospitality industry[57] - The company plans to focus on market expansion and new product development to drive future growth[67] - The company is exploring potential mergers and acquisitions to strengthen its market position[78] - Strategic initiatives are being implemented to optimize supply chain management and reduce operational costs[78] - Future guidance indicates a positive outlook for revenue growth driven by increased restaurant openings and enhanced service offerings[78] Challenges and Adjustments - The company experienced a foreign currency translation adjustment loss of RMB 487,856 for the quarter, compared to a gain of RMB 185,533 in the same quarter of 2023[64] - The net loss attributable to non-controlling interests for the quarter was RMB 571,587, compared to a net income of RMB 1,308,704 in the same quarter of 2023[64] - Net cash provided by operating activities for the quarter was RMB 69,165,002, down 53% from RMB 147,574,909 in the same quarter last year[72] - Net loss for the quarter ended June 30, 2024, was RMB 62,261,861, a decrease of 39% compared to RMB 101,946,360 for the same quarter in 2023[71] - Bad debt expenses increased significantly to RMB 16,294,501 for the quarter, compared to RMB 6,320,196 in the same quarter of 2023, marking a 158% rise[71]