- Total revenues decreased by 22.5% year over year to RMB357.0 million (US$50.9 million)[1].
- Income from operations was RMB106.4 million (US$15.2 million)[1] compared to RMB137.8 million for the third quarter of 2023.
- Net income was RMB65.2 million (US$9.3 million)[1] compared to RMB117.4 million for the third quarter of 2023.
- Adjusted EBITDA (non-GAAP)[2] decreased 32.1% year over year to RMB122.5million (US$17.5 million)[1].
- Core net income (non-GAAP)[3] decreased 26.6% year over year to RMB93.5million (US$13.3 million)[1].
| [1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB 7.0176 on September 30, 2024 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20220103/. |
| [2] Adjusted EBITDA (non-GAAP) is calculated as net income plus other operating expenses, income tax expense, share of loss in equity investees, net of tax, interest expense, depreciation and amortization, losses from investment in equity securities and other general expenses, but excludes other operating income, interest income and other, net, gains from investment in equity securities, share of gains in equity investees (net of tax), and other income, net. The calculation of Adjusted EBITDA (non-GAAP) included in this report has been aligned according to the above mentioned definition. |
| [3] Core net income is calculated as net income plus share-based compensation, losses from investments in equity securities (net of 25% tax), other expense(net of 25% tax), one-time fees and expense, and other general expenses but excludes government subsidies (net of 25% tax), gains from investment in equity securities (net of 25% tax), and other income (net of 25% tax). |
Hotels
- A total of 4,336 hotels with 316,461 hotel rooms were in operation as of September 30, 2024.
- The Company opened 109 hotels and had a pipeline of 1,085 hotels contracted for or under development as of September 30, 2024.
- The average daily room rate was RMB181, a decrease of 6.0% from RMB192 in the third quarter of 2023.
- The occupancy rate was 74.6%, decreased from 81.2% in the third quarter of 2023.
- Revenue per available room, or RevPAR, was RMB135, a 13.6% year-over-year decrease.
- A total of 182 restaurants were in operation as of September 30, 2024
- The AC (average check) was RMB46, a 15.9% year-over-year decrease.
- The ADT (average daily tickets) was 106, decreased from 120 in the third quarter of 2023.
- The ADS (average daily sales per store) was RMB4,891, a decrease of 25.6% from RMB6,570 in the third quarter of 2023.
Our restaurant business' net income remained positive for a second consecutive quarter as we continued to grow the number of franchised street stores and stores with stable consumer traffic. Such stores now account for 55.5% of our store count compared to 44.6% a year ago. Following the closing of unprofitable stores over the past year, the number restaurants in operation had stabilized at 182 at the end of quarter and we are now focused on growing that number," said Mr. Alex S. Xu, Chairman and Chief Executive Office of GreenTree.
| Quarter Ended | ||||
| September 30, 2023 | September
30, 2023 | September 30, 2023 | September
30, 2023 | |
| RMB | RMB | RMB | RMB | |
| Hotel | Restaurant | Elimination | Total | |
| Revenues | ||||
| Leased-and-operated revenues | 151,839,044 | 80,358,490 | 49,624 | 232,247,158 |
| Franchised-and-managed revenues | 186,043,016 | 4,070,541 | - | 190,113,557 |
| Wholesales and others | 1,168,017 | 37,355,462 | - | 38,523,479 |
| Total revenues | 339,050,077 | 121,784,493 | 49,624 | 460,884,194 |
| Quarter Ended | |||||
| September 30, 2024 | September 30, 2024 | September 30, 2024 | September 30, 2024 | September 30, 2024 | |
| RMB | RMB | RMB | RMB | US$ | |
| Hotel | Restaurant | Elimination | Total | Total | |
| Revenues | |||||
| Leased-and-operated revenues | 118,159,125 | 41,117,277 | - | 159,276,402 | 22,696,706 |
| Franchised-and-managed revenues | 167,928,127 | 1,757,933 | - | 169,686,060 | 24,180,070 |
| Wholesales and others | 796,488 | 27,766,790 | (544,290) | 28,018,988 | 3,992,674 |
| Total revenues | 286,883,740 | 70,642,000 | (544,290) | 356,981,450 | 50,869,450 |
| Nine Month Ended | ||||
| September 30, 2023 | September 30, 2023 | September 30, 2023 | September 30, 2023 | |
| RMB | RMB | RMB | RMB | |
| Hotel | Restaurant | Elimination | Total | |
| Revenues | ||||
| Leased-and-operated revenues | 365,402,970 | 248,698,564 | (1,075,555) | 613,025,979 |
| Franchised-and-managed revenues | 533,460,017 | 7,235,800 | - | 540,695,817 |
| Wholesales and others | 3,393,596 | 97,978,792 | - | 101,372,388 |
| Total revenues | 902,256,583 | 353,913,156 | (1,075,555) | 1,255,094,184 |
| Nine Month Ended | |||||
| September 30, 2024 | September 30, 2024 | September 30, 2024 | September 30, 2024 | September 30, 2024 | |
| RMB | RMB | RMB | RMB | US$ | |
| Hotel | Restaurant | Elimination | Total | Total | |
| Revenues | |||||
| Leased-and-operated revenues | 346,552,738 | 130,792,112 | - | 477,344,850 | 68,021,097 |
| Franchised-and-managed revenues | 476,898,409 | 5,527,686 | - | 482,426,095 | 68,745,169 |
| Wholesales and others | 2,881,694 | 77,272,388 | (1,004,493) | 79,149,589 | 11,278,726 |
| Total revenues | 826,332,841 | 213,592,186 | (1,004,493) | 1,038,920,534 | 148,044,992 |
Hotel revenues were RMB286.9 million (US$40.9 million), a 15.4% year-over-year decrease due to a 13.6% year-over-year decrease in Revpar and the closure of 6 L&O hotels in the third quarter due to lease expiration and strategic reviews. The decrease was partially offset by revenues from new openings.
Restaurant revenues were RMB70.6 million (US$10.1 million), a 42.0% year-over-year decrease, mainly due to lower ADS and the decrease in the number of L&O stores. By the end of the third quarter, we had completed the strategic transformation of our business model.
Total revenues for the first nine months of 2024 were RMB1,038.9 million (US$148.0 million)[1], a 17.2% year-over-year decrease.
Total revenues from leased-and-operated, or L&O, hotels and restaurants were RMB159.3 million (US$22.7 million)[1], a 31.4% year-over-year decrease.
Total revenues from L&O hotels were RMB118.2 million (US$16.8 million)[1], a 22.2% year-over-year decrease. The decrease was primarily attributable to an 7.5% year-over-year decrease in the third quarter RevPAR of L&O hotels, the closing of 6 L&O hotels, and a reduction in sublease revenues mainly due to the disposal of a property.
Total revenues from L&O restaurants were RMB41.1 million (US$5.9 million)[1], a 48.8% year-over-year decrease, mainly due to the closure of 29 L&O restaurants since the third quarter of 2023 and the year-over-year decrease in ADS.
Total revenues from L&O hotels and restaurants for the first nine months of 2024 were RMB477.3 million (US$68.0 million)[1], a 22.1% year-over-year decrease.
Total revenues from franchised-and-managed, or F&M, hotels and restaurants were RMB169.7 million (US$24.2 million), a 10.7% year-over-year decrease.
Total revenues from F&M hotels were RMB167.9 million (US$23.9 million), a 9.7% year-over-year decrease, primary due to a 13.8% decrease in F&M hotels' Revpar and partially offset by new openings.
Total revenues from F&M restaurants were RMB1.8 million (US$0.3 million), a 56.8% year-over-year decrease, mainly due to the year-over-year decrease in ADS.
Total revenues from F&M hotels and restaurants for the first nine months of 2024 were RMB482.4 million (US$68.7 million)[1], a 10.8% year-over-year decrease.
Total revenues from wholesale and others were RMB28.0M (US$4.0 million), a 27.3% year-over-year decrease, mainly due to the decline in the wholesale segment of the restaurant business.
Total revenues from wholesale and others for the first nine months of 2024 were RMB79.1 million (US$11.3 million), a 21.9% year-over-year decrease.
Total operating costs and expenses
| Quarter Ended | ||||
| September 30, 2023 | September 30, 2023 | September 30, 2023 | September 30, 2023 | |
| RMB | RMB | RMB | RMB | |
| Hotel | Restaurant | Elimination | Total | |
| Operating costs and expenses | ||||
| Operating costs | 159,920,582 | 87,814,484 | 49,623 | 247,784,689 |
| Selling and marketing expenses | 14,277,225 | 12,026,085 | - | 26,303,310 |
| General and administrative expenses | 26,655,780 | 11,858,500 | - | 38,514,280 |
| Other operating expenses | 180,515 | 120,654 | - | 301,169 |
| Other general expenses | 11,322,509 | - | - | 11,322,509 |
| Total operating costs and expenses | 212,356,611 | 111,819,723 | 49,623 | 324,225,957 |
| Quarter Ended | |||||
| September 30, 2024 | September 30, 2024 | September 30, 2024 | September 30, 2024 | September 30, 2024 | |
| RMB | RMB | RMB | RMB | US$ | |
| Hotel | Restaurant | Elimination | Total | Total | |
| Operating costs and expenses | |||||
| Operating costs | 152,278,796 | 53,365,650 | (475,648) | 205,168,798 | 29,236,320 |
| Selling and marketing expenses | 12,899,411 | 2,881,942 | (68,642) | 15,712,711 | 2,239,043 |
| General and administrative expenses | 35,309,079 | 7,023,449 | - | 42,332,528 | 6,032,337 |
| Other operating expenses | 1,363,201 | 654,777 | - | 2,017,978 | 287,560 |
| Other general expenses | - | - | - | - | - |
| Total operating costs and expenses | 201,850,487 | 63,925,818 | (544,290) | 265,232,015 | 37,795,260 |
| Nine Month Ended | ||||
| September 30, 2023 | September 30, 2023 | September 30, 2023 | September 30, 2023 | |
| RMB | RMB | RMB | RMB | |
| Hotel | Restaurant | Elimination | Total | |
| Operating costs and expenses | ||||
| Operating costs | 444,284,960 | 292,122,643 | (560,465) | 735,847,138 |
| Selling and marketing expenses | 39,115,830 | 21,411,730 | - | 60,527,560 |
| General and administrative expenses | 117,191,327 | 33,197,310 | - | 150,388,637 |
| Other operating expenses | 1,024,079 | 7,111,308 | - | 8,135,387 |
| Other general expenses | 27,296,093 | - | - | 27,296,093 |
| Total operating costs and expenses | 628,912,289 | 353,842,991 | (560,465) | 982,194,815 |
| Nine Month Ended | |||||
| September 30, 2024 | September 30, 2024 | September 30, 2024 | September 30, 2024 | September 30, 2024 | |
| RMB | RMB | RMB | RMB | US$ | |
| Hotel | Restaurant | Elimination | Total | Total | |
| Operating costs and expenses | |||||
| Operating costs | 441,888,078 | 170,642,273 | (916,517) | 611,613,834 | 87,154,274 |
| Selling and marketing expenses | 41,576,925 | 8,473,078 | (87,975) | 49,962,028 | 7,119,532 |
| General and administrative expenses | 128,706,277 | 22,802,128 | - | 151,508,405 | 21,589,775 |
| Other operating expenses | 2,301,445 | 2,136,726 | - | 4,438,171 | 632,434 |
| Other general expenses | 11,756,531 | - | - | 11,756,531 | 1,675,292 |
| Total operating costs and expenses | 626,229,256 | 204,054,205 | (1,004,492) | 829,278,969 | 118,171,308 |
Operating costs of the hotel business were RMB152.3 million (US$21.7million)[1], a 4.8% year-over-year decrease. The decrease was mainly attributable to lower staff related costs due to the disposal of L&O hotels.
Operating costs of the restaurant business in the third quarter of 2024 were RMB53.4 million (US$ 7.6 million)[1], a 39.2% year-over-year decrease, due to the closure of L&O stores.
For the first nine months of 2024, operating costs were RMB611.6 million (US$87.2 million)[1], a 16.9% decrease.
Selling and marketing expenses were RMB15.7 million (US$2.2 million)[1], a 40.3% year-over-year decrease.
Selling and marketing expenses of the hotel business were RMB12.9 million (US$1.8 million)[1], a 9.7% year-over-year decrease. The decrease was mainly due to lower advertising expenses.
Selling and marketing expenses of the restaurant business were RMB2.9 million (US$0.4 million)[1], a 76.0% year-over-year decrease, mainly attributable to lower sales staff related expenses and lower sales-channel commissions.
For the first nine months of 2024, selling and marketing expenses were RMB50.0 million (US$7.1 million)[1], a 17.5% decrease.
General and administrative, or G&A expenses were RMB42.3 million (US$6.0 million)[1], a 9.9% year-over-year increase.
G&A expenses of the hotel business were RMB35.3 million (US$5.0 million)[1], a 32.5% year-over-year increase. The increase was mainly due to an increase of approximately RMB11 million in bad debt provisions for long-aged account receivables.
G&A expenses of the restaurant business were RMB7.0 million (US$1.0 million)[1], a 40.8% year-over-year decrease, mainly due to lower staff related expenses.
General and administrative expenses for the first nine months of 2024 were RMB151.5 million (US$21.6 million)[1], a 0.7% year-over-year increase.
Other general expenses were nil for this quarter, and for the first nine months of 2024 were RMB11.8 million (US$1.7 million) [1], a 56.9% year-over-year decrease.
Gross profit was RMB151.8 million (US$21.6 million)[1], a year-over-year decrease of 28.8%. Gross margin was 42.5%, compared to 46.2% a year ago. The gross profit of the hotel business was RMB134.6 million (US$19.2 million)[1], an 24.9% year-over-year decrease. The gross profit of the restaurant business was RMB17.3 million (US$2.5 million)[1], a 49.1% year-over-year decrease.
Income from operations in the third quarter of 2024 was RMB106.4 million (US$15.2 million)[1] , compared to income from operations of RMB137.8 million in the third quarter of 2023, with a margin of 29.8%. The lower profitability was due to the decline in revenue, despite lower operating costs and expenses.
Income from operations of the hotel business was RMB99.5 million (US$14.2 million)[1], compared to an income from operations of RMB127.5 million in the third quarter of 2023, with a margin of 34.7%.
Income from operations of the restaurant business in the third quarter of 2024 was RMB6.9 million (US$1.0 million)[1], compared to income from operations of RMB10.3 million in the third quarter of 2023, with a margin of 9.7%.
Income from operations for the first nine months of 2024 was RMB263.1 million (US$37.5 million)[1] compared to income from operations of RMB288.7 million in 2023, with a margin of 25.3%.
Net income in the third quarter of 2024 was RMB65.2 million (US$9.3 million)[1], compared to a net income of RMB117.4 million in the third quarter of 2023, and net margin was 18.3%. Net income was partially negatively impacted by a foreign exchange loss of approximately RMB33 million.
Net income of the hotel business was