Financial Data and Key Metrics Changes - The company's net revenues for 2025 grew by 37.4% year over year and 29.5% quarter over quarter to RMB 2,469 million [25] - Adjusted net income for 2025 increased by 30.2% year over year, with an adjusted net profit margin of 17.3%, a decrease of 0.9 percentage points year over year due to a rise in the overall effective tax rate [31][54] - Gross margin for hotel businesses improved to 38.3% in 2025 from 35.7% in 2024, while retail gross margin expanded to 53.3% from 50.6% during the same period [28][29] Business Line Data and Key Metrics Changes - RevPAR for managed hotels was RMB 340 for 2025, compared to RMB 302 for the previous quarter, while revenues from monetized hotels increased by 26.5% year over year [26] - Retail business GMV rose by 84.6% year over year to RMB 1,144 million, driven by strong sales and promotional campaigns [17] - The number of hotels in operation increased to 1,824, representing a 29.2% year over year increase, with 118 hotels opened in the second quarter [9] Market Data and Key Metrics Changes - The retail business achieved a new sales record during the June 18 shopping festival, reaching RMB 578 million, up more than 86% from the same period last year [18] - The number of registered individual members surpassed 102 million by the end of the second quarter, representing a 34.7% year over year increase [21] Company Strategy and Development Direction - The company aims to maintain a long-term growth principle with a focus on hotel quality, ensuring each new hotel aligns with brand standards [8] - The strategic priority for the retail business includes enhancing R&D capabilities and optimizing supply chain management to drive high-quality growth [20] - The company plans to achieve a target of 2,000 premier hotels by the end of the year, with a focus on quality over quantity in hotel openings [40][43] Management's Comments on Operating Environment and Future Outlook - Management noted that while overall demand has not fully recovered, summer leisure travel showed resilience, and they expect RevPAR pressure in Q3 to ease compared to Q2 [35] - The company anticipates challenges due to increasing market supply but believes leveraging differentiated experiential advantages will help navigate market cycles [36] - The adjusted comprehensive tax rate is expected to rise to 30% this year, which will affect the full-year net profit margin [54] Other Important Information - The company has launched new products in the retail segment, including the Deep Sleep Memory Foam Pillow Pro 3.0, which received positive market feedback [48] - The flagship Sahe Hotel in Shenzhen achieved a RevPAR exceeding RMB 800 in its first full month of operation, indicating strong market reception [59] Q&A Session Summary Question: RevPAR trend performance in Q3 and full-year outlook - Management indicated that overall demand has not yet recovered to last year's levels, but summer leisure travel shows resilience, expecting RevPAR pressure in Q3 to ease [35][36] Question: Changes to hotel openings and franchise signings - The company opened 239 new hotels in the first half and expects to achieve its full-year guidance of 500 new hotel openings [40][43] Question: Full-year revenue guidance for the retail business - The retail business has raised its full-year growth guidance to 60% year over year, driven by new product launches and strong market performance [48] Question: Stability of adjusted net income margin - The company anticipates a year-on-year decline in full-year net profit margin due to structural changes in revenue and increased effective tax rates [54] Question: Strategic focus on new hotel brands - The Sahe Hotel brand will focus on quality first, with several high-quality projects in key cities planned for opening [59][62]