• Total revenues increased by 12.1% year over year to RMB794.2 million (US$109.5 million)[1].
  • Income from operations was RMB150.9 million (US$20.8 million)[1], compared to RMB-474.3 million for the first half of 2022.
  • Net income was RMB177.3 million (US$24.5 million)[1], compared to RMB-384.5 million for the first half of 2022.
  • Adjusted EBITDA (non-GAAP)[2] increased by 137.8% year over year to RMB226.9 million (US$31.3 million)[1].
  • Core net income (non-GAAP)[3] increased by 65.2% year over year to RMB136.1 million (US$18.8 million)[1].

GreenTree Hospitality Group Ltd. (NYSE: GHG), a leading hospitality and restaurant management group in China, today announced its unaudited financial results for the first half of 2023. As Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China, were all under the control of our founder, Alex S. Xu, until their acquisition by the Company, the Company accounted for the common-control acquisitions by using the pooling of interest method. The consolidated balance sheets and consolidated statements of comprehensive income/(loss) include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under common control. In this report, the comparative financial data have been restated to reflect the business combinations under common control.

First Half 2023 Operational Highlights

Hotels 

  • A total of 4,108 hotels with 303,387 hotel rooms were in operation as of June 30, 2023.
  • The Company opened 183 hotels during the six months ended June 30, 2023, and had a pipeline of 969 hotels contracted for or under development as of June 30, 2023.
  • The average daily room rate was RMB167 in the first quarter of 2023, an increase of 9.1% from RMB153 in the first quarter of 2022, and RMB181 in the second quarter of 2023, a 23.1% year-over-year increase.
  • The occupancy rate was 71.7% in the first quarter of 2023, up from 60.0% in the first quarter of 2022, and 77.8% in the second quarter of 2023, compared to 62.2% in the second quarter of 2022.
  • Revenue per available room, or RevPAR, was RMB120 in the first quarter of 2023, a 30.4% year-over-year increase, and RMB141 in the second quarter of 2023, a 54.0% year-over-year increase. 

Restaurants

  • A total of 218 restaurants were in operation as of June 30, 2023.
  • The AC (average check) was RMB55 in the first quarter of 2023, a 19.2% year-over-year increase, and RMB53 in the second quarter of 2023, a 2.2% year-over-year increase.
  • The ADT (average daily tickets) was 110 in the first quarter of 2023, down from 130 in the first quarter of 2022, and 120 in the second quarter of 2023, compared to 78 in the second quarter of 2022.
  • The ADS (average daily sales per store) was RMB 6,080 in the first quarter of 2023, an increase of 0.9% from RMB 6,027 in the first quarter of 2022, and RMB 6,371 in the second quarter of 2023, a 57.3% year-over-year increase.

"For our hotel business, the first quarter of 2023 marked a new beginning thanks to the recovery in the hospitality industry and the entire economy in China. RevPAR recovered to 94.3% of its first quarter of 2019 level. RevPAR during the national Labor Day holiday in early May reached more than 120% of its level in the same period in 2019, capitalizing on the popularity of travel during the national holiday period. And due to an increase in the number of people traveling during the summer vacation, RevPAR in July and August was nearly stable at 110% of its level in the same period in 2019.

As previously disclosed, the Company completed the acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China from our controlling shareholder. Our strategy and execution in our restaurant business focus on further expansion in the proportion of franchised-and-managed restaurants and greater penetration to street stores. To ensure the profitability of our restaurant business, we closed unprofitable stores. In the first half of 2023, the ADS of restaurant business recovered to 122.9% of its first half of 2022 level.

"We are grateful for the hard work of our team, franchisees, and partners, and the support of our customers that made it possible to recover quickly starting from the first quarter of 2023 as China began returning to normal life," said Mr. Alex S. Xu, Chairman and Chief Executive Officer of GreenTree.

First Half 2023 Financial Results

Six months Ended

 June 30,

2022

 June 30,

2022

 June 30,

2022

 June 30,

2022

RMB

RMB

RMB

RMB

Hotel

Restaurant

Elimination

Total

Revenues

Leased-and-operated revenues

171,272,365

171,008,920

(229,756)

342,051,529

Franchised-and-managed revenues

275,539,547

18,229,310

293,768,857

Wholesales and others

10,564,787

62,284,229

72,849,016

Total revenues

457,376,699

251,522,459

(229,756)

708,669,402

Six months Ended

 June 30,

2023

 June 30,

2023

 June 30,

2023

 June 30,

2023

 June 30,

2023

RMB

RMB

RMB

RMB

US$

Hotel

Restaurant

Elimination

Total

Total

Revenues

Leased-and-operated

revenues

213,563,927

168,340,074

(1,125,179)

380,778,822

52,511,801

Franchised-and-managed

revenues

347,417,000

17,355,892

364,772,892

50,304,482

Wholesales and others

2,225,580

46,432,697

48,658,277

6,710,283

Total revenues

563,206,507

232,128,663

(1,125,179)

794,209,991

109,526,566

Total revenues for the first half of 2023 were RMB794.2 million (US$109.5 million)[1], a 12.1% year-over-year increase.

Hotel revenues were RMB563.2 million (US$77.7 million), a 23.1% year-over-year increase. The increase was mainly attributable to the recovery in RevPAR and the increase in the number of hotels.

Restaurant revenues were RMB232.1 million (US$32.0 million), a 7.7% year-over-year decrease. The decrease was mainly due to the closure of 64 stores, and partially offset by an increase in ADS.

Total revenues from leased-and-operated, or L&O, hotels and restaurants were RMB380.8 million (US$52.5 million)[1], a 11.3% year-over-year increase.

Total revenues from L&O hotels for the first half of 2023 were RMB213.6 million (US$29.5 million)[1], a 24.7% year-over-year increase. The increase was primarily attributable to a 47.8% year-over-year increase in L&O hotels' first half RevPAR and more newly opened L&O hotels in the first half of 2023 as compared to the first half of 2022.

Total revenues from L&O restaurants for the first half of 2023 were RMB168.3 million (US$23.2 million)[1], a 1.6% year-over-year decrease. The decrease was mainly due to the closure of 47 L&O stores, and partially offset by an increase in ADS.

Total revenues from franchised-and-managed, or F&M, hotels and restaurants were RMB364.8 million (US$ 50.3 million)[1], a 24.2% year-over-year increase.

Total revenues from F&M hotels were RMB347.4 million (US$47.9 million)[1], a 26.1% year-over-year increase. Initial franchise fees increased 9.3% year over year, mainly because of the increase in the gross opening number of F&M hotels. Recurring franchisee management fees and others increased by 27.8% year over year, primarily due to a 46.4% increase in F&M hotels' RevPAR and the increase of 167 F&M hotels.

Total revenues from F&M restaurants were RMB17.4 million (US$2.4 million)[1], a 4.8% year-over-year decrease. The decrease was mainly due to a decrease of 17 F&M stores numbers,and partially offset by a 22.9% increase in F&M stores' average daily sales.

Total revenues from wholesale and others were RMB48.7 million (US$ 6.7 million)[1], a 33.2% year-over-year decrease, mainly because of reduced business from supermarkets, partially offset by increased business through distributors.  

Total operating costs and expenses

Six Months Ended

 June 30,

2022

 June 30,

2022

 June 30,

2022

 June 30,

2022

RMB

RMB

RMB

RMB

Hotel

Restaurant

Elimination

Total

Operating costs and expenses

Operating costs

307,750,028

234,911,742

289,605

542,951,375

Selling and marketing expenses

18,852,606

9,717,435

28,570,041

General and administrative expenses

99,724,402

21,847,196

121,571,598

Other operating expenses

2,048,734

2,240,920

4,289,654

Other general expenses

490,619,710

490,619,710

Total operating costs and

expenses

918,995,480

268,717,293

289,605

1,188,002,378

Six Months Ended

 June 30,

2023

 June 30,

2023

 June 30,

2023

 June 30,

2023

 June 30,

2023

RMB

RMB

RMB

RMB

US$

Hotel

Restaurant

Elimination

Total

Total

Operating costs and

expenses

Operating costs

284,364,378

204,308,159

(610,088)

488,062,449

67,306,890

Selling and marketing

expenses

24,838,605

9,385,645

34,224,250

4,719,740

General and

administrative expenses

90,535,547

21,338,810

111,874,357

15,428,179

Other operating

expenses

843,564

6,990,654

7,834,218

1,080,388

Other general expenses

15,973,584

15,973,584

2,202,858

Total operating costs

and expenses

416,555,678

242,023,268

(610,088)

657,968,858

90,738,055

Operating costs were RMB488.1 million (US$67.3 million)[1], a 10.1% year-over-year decrease. 

Operating costs of the hotel business were RMB284.4 million (US$39.2 million)[1], a 7.6% year-over-year decrease. The decrease was mainly due to the deconsolidation of Argyle Hotel Management Group (Australia) Pty Ltd., or Argyle, and the disposal of our interest in Urban Hotel Group, or Urban, and was partially offset by higher consumables and higher utility costs as business rebounded, as well as higher rents with lower exemption compared to last year.

Operating costs of the restaurant business were RMB204.3 million (US$28.2 million)[1], a 13.0% year-over-year decrease. The decrease was due to the closure of 64 stores.

Selling and marketing expenses were RMB34.2 million (US$4.7 million)[1], a 19.8% year-over-year increase.

Selling and marketing expenses of the hotel business were RMB24.8 million (US$3.4 million)[1], a 31.8% year-over-year increase. The increase was mainly attributable to higher sales-channel commissions, higher sales staff salaries, and higher travel expenses.

Selling and marketing expenses of the restaurant business were RMB9.4 million (US$1.3 million)[1], a 3.4% year-over-year decrease. The decrease was mainly attributable to lower advertising expenses and lower sales-channel commissions.

General and administrative, or G&A expenses were RMB111.9 million (US$15.4 million)[1], an 8.0% year-over-year decrease.

G&A expenses of the hotel business were RMB90.5 million (US$12.5 million)[1], a 9.2% year-over-year decrease. The decrease was mainly due to the deconsolidation of Argyle and the disposal of our interest in Urban,and partially offset by higher consulting fees and higher staff related expenses.

G&A expenses of the restaurant business were RMB21.3 million (US$2.9 million)[1], a 2.3 % year-over-year decrease. The decrease was mainly due to lower staff related expenses and lower rents due to the closure of 64 stores.

Other general expenses of the hotel business were RMB16.0 million (US$2.2 million)[1], a 96.7% year-over-year decrease.These expenses include the provisions for loan receivables related to franchisee loans, and impairments caused by the disposal of 4 unprofitable hotels.

Gross profit was RMB306.1 million (US$42.2 million)[1], a year-over-year increase of 84.7%. Gross margin was 38.5%, compared to 23.4% a year ago. The gross profit of the hotel business was RMB278.8 million (US$38.5 million)[1], an 86.4% year-over-year increase. The gross profit of the restaurant business was RMB27.8 million (US$3.8 million)[1], a 67.5% year-over-year increase.

Income from operations was RMB150.9 million (US$20.8 million)[1] , compared to a loss from operations of RMB474.3 million in the first half of 2022, with a margin of 19.0%.

Income from operations of the hotel business was RMB160.4 million (US$22.1 million)[1], compared to a loss from operations of RMB457.7 million in the first half of 2022, with a margin of 28.5%. 

Loss from operations of the restaurant business was RMB9.0 million (US$1.2 million)[1], compared to a loss from operations of RMB16.1 million in the first half of 2022, with a margin of -3.9%.

Net income was RMB177.3 million (US$24.5 million)[1], compared to a net loss of RMB384.5 million in the first half of 2022, and net margin was 22.3%.

Net income of the hotel business was RMB191.8 million (US$26.5 million)[1], compared to a net loss of RMB360.9 million in the first half of 2022, and net margin was 34.1%.

Net loss of the restaurant business was RMB14.1 million (US$1.9 million)[1], compared to a net loss of RMB23.2 million in the first half of 2022, and net margin was -6.1%.

Adjusted EBITDA (non-GAAP)[2] was RMB226.9 million (US$31.3 million)[1], a year-over-year increase of 137.8%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, was 28.6%, compared to 13.5% a year ago.

Core net income (non-GAAP) was RMB136.1 million (US$18.8 million)[1], a year-over-year increase of 65.2%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, for the first half of 2023 was 17.1%, compared to 11.6% one year ago.

Earnings per American Depositary Share, or ADS, (basic and diluted) were RMB1.79 (US$0.25)[1], up from RMB-3.38 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) for the first half of 2023 was RMB1.33 (US$0.18)[1], up from RMB0.80 a year ago.   

Cash flow Operating cash inflow was RMB313.1 million (US$43.2 million)[1] as a result of income from operations. Investing cash inflow for the first half of 2023 was RMB128.2 million (US$17.7 million)[1], which was primarily attributable to proceeds from short-term investments and repayment from franchisees. The investing cash inflow was partially offset by purchases of property and equipment and short-term investments. Financing cash outflow was RMB37.4 million (US$5.2 million)[1], mainly attributable to the repayment of bank loans by the end of the June 30, 2023.

Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposits. As of June 30, 2023, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,440.1 million (US$198.6 million)[1], compared to RMB1,119.4 million as of December 31, 2022. The increase was primarily due to cash from operating activities and repayment from franchisees, proceeds from disposal of subsidiaries, partially offset by repayment of bank loans and investment of property.

Guidance

Taking into account the recovery in long-term trends and short-term industry fluctuations, we expect total revenues of organic hotels for the full year of 2023 to grow 30%-35% of the 2022 levels. Total revenues for our restaurant business and our organic hotel business, for the full year of 2023 are expected to grow 15%-20% over the 2022 levels.

The guidance set forth above reflects the Company's current and preliminary views based on its recovery and may not be indicative of the final financial results for any future periods or the full year.

About GreenTree Hospitality Group Ltd.

GreenTree Hospitality Group Ltd. (NYSE: GHG) is a leading hospitality and restaurant management group in China. As of June 30, 2023, GreenTree had a total number of 4,108 hotels and 218 restaurants. In 2023, HOTELS magazine ranked GreenTree 12th among the 225 largest global hotel groups in terms of number of hotels in its annual HOTELS' 225. GreenTree was the fourth largest hospitality company in China in 2022 according to the China Hospitality Association. In 2023, GreenTree completed its acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China.

GreenTree has a broad portfolio of diverse brands spanning from the economy to mid-scale, up-scale and luxury segments of the hospitality industry mainly in China. Through its strong membership base, expansive booking network, superior system management with moderate charges, and fully supported by its operating departments including Decoration, Engineering, Purchasing, Operation, IT and Finance, GreenTree aims to keep closer relationships with all of its clients and partners by providing a diverse brand portfolio that features comfort, style and value.

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Balance Sheets

December 31,

June 30,

June 30,

2022

2023

2023

RMB

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

701,332,213

1,115,384,452

153,818,550

Restricted cash

7,937,397

-

-

Short-term investments

186,031,572

235,416,298

32,465,392

Investments in equity securities

41,361,346

27,460,488

3,786,974

Accounts receivable, net of allowance

140,429,505

126,306,120

17,418,410

Amounts due from related parties

451,786,275

44,473,106

6,133,122

Prepaid rent

-

-

-

Inventories

30,503,712

23,052,986

3,179,152

Other current assets

142,169,713

147,472,648

20,337,408

Loans receivable, net

181,667,170

152,938,524

21,091,187

Total current assets

1,883,218,903

1,872,504,622

258,230,195

Non-current assets:

Amounts due from a related party

112,360,000

112,360,000

15,495,153

Restricted cash

25,359,592

23,544,862

3,246,985

Long-term time deposits

130,000,000

-

-

Loans receivable, net

177,172,509

98,598,159

13,597,308

Property and equipment, net

899,985,340

883,944,435

121,901,512

Intangible assets, net

174,748,932

171,687,271

23,676,757

Goodwill

128,752,950

128,752,950

17,755,844

Long-term investments

176,854,460

186,909,291

25,775,970

Operating lease right-of-use assets

1,676,544,520

1,633,368,783

225,251,856

Other assets

120,620,533

114,673,765

15,814,236

Deferred tax assets

242,186,616

260,348,940

35,903,761

 TOTAL ASSETS

5,747,804,355

5,486,693,078

756,649,577

LIABILITIES AND EQUITY

Current liabilities:

Short-term bank loans

298,100,000

270,700,000

37,331,237

Long-term bank loans, current portion

-

-

-

Accounts payable

123,522,029

113,604,869

15,666,828

Advance from customers

26,480,779

22,822,957

3,147,430

Amounts due to related parties

24,810,304

23,130,913

3,189,899

Salary and welfare payable

89,343,058

95,815,922

13,213,620

Deferred rent

-

-

-

Deferred revenue

199,656,130

201,488,954

27,786,597

Accrued expenses and other current liabilities

455,519,530

505,932,951

69,771,345

Income tax payable

74,672,133

116,954,407

16,128,750

Dividends payable

-

-

-

Operating lease liabilities, current

271,518,556

280,717,711

38,712,743

Deferred tax liabilities

34,473,265

34,344,492

4,736,322

Total current liabilities

1,598,095,784

1,665,513,176

229,684,771

Long-term bank loans

160,000,000

150,000,000

20,685,946

Deferred rent

-

-

-

Deferred revenue

232,857,456

225,165,519

31,051,745

Other long-term liabilities

128,196,031

112,114,674

15,461,320

Operating lease liabilities, non-current

1,521,589,481

1,473,955,554

203,267,766

Deferred tax liabilities

63,815,023

50,773,630

7,002,004

Unrecognized tax benefits

350,002,241

381,962,640

52,675,057

 TOTAL LIABILITIES

4,054,556,016

4,059,485,193

559,828,609

Shareholders' equity:

Class A ordinary shares

222,587,070

222,587,070

30,696,161

Class B ordinary shares

115,534,210

115,534,210

15,932,896

Paid-in capital

94,000,801

94,000,801

12,963,303

Treasury Stock

(16,971,057)

(16,971,057)

(2,340,416)

Additional paid-in capital

1,911,328,052

1,491,556,644

205,695,068

Retained earnings (Accumulated losses)

(698,677,163)

(540,865,018)

(74,588,697)

Accumulated other comprehensive income

27,732,104

28,728,211

3,961,801

Total GreenTree Hospitality Group Ltd. shareholders'

equity

1,655,534,017

1,394,570,861

192,320,116

Non-controlling interests

37,714,322

32,637,024

4,500,852

Total shareholders' equity

1,693,248,339

1,427,207,885

196,820,968

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

5,747,804,355

5,486,693,078

756,649,577

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income

Six Months 

Ended

Three Months Ended

Six Months Ended

 June 30, 2022

March 31,

2023

June 30,

2023

June 30, 2023

June 30,

2023

RMB

RMB

RMB

RMB

US$

Revenues

Leased-and-operated revenues

342,051,529

170,890,916

209,887,906

380,778,822

52,511,801

Franchised-and-managed revenues

293,768,857

178,526,853

186,246,039

364,772,892

50,304,482

Wholesales and others

72,849,016

29,802,650

18,855,627

48,658,277

6,710,283

Total revenues

708,669,402

379,220,419

414,989,572

794,209,991

109,526,566

Operating costs and

expenses

Operating costs

(542,951,375)

(243,155,310)

(244,907,139)

(488,062,449)

(67,306,890)

Selling and marketing

expenses

(28,570,041)

(16,015,579)

(18,208,671)

(34,224,250)

(4,719,740)

General and

administrative expenses

(121,571,598)

(57,755,145)

(54,119,212)

(111,874,357)

(15,428,179)

Other operating expenses

(4,289,654)

(1,492,483)

(6,341,735)

(7,834,218)

(1,080,388)

Other general expenses

(490,619,710)

(11,664,345)

(4,309,239)

(15,973,584)

(2,202,858)

Total operating costs

and expenses

(1,188,002,378)

(330,082,862)

(327,885,996)

(657,968,858)

(90,738,055)

Other operating income

5,043,707

3,159,519

11,511,398

14,670,917

2,023,212

Income from operations

(474,289,269)

52,297,076

98,614,974

150,912,050

20,811,723

Interest income and other,

net

24,042,558

7,629,014

9,750,337

17,379,351

2,396,722

Interest expense

(17,441,575)

(5,528,061)

(3,868,469)

(9,396,530)

(1,295,841)

Gains (losses) from

investment in equity

securities

21,687,584

(4,536,562)

(263,836)

(4,800,398)

(662,005)

Other income, net

14,751,769

(2,149,582)

77,119,089

74,969,507

10,338,768

Income before income

taxes

(431,248,933)

47,711,885

181,352,095

229,063,980

31,589,367

Income tax expense

46,658,590

7,022,835

(57,972,918)

(50,950,083)

(7,026,338)

Income (loss) before

share of gains in equity

investees

(384,590,343)

54,734,720

123,379,177

178,113,897

24,563,029

Share of loss/(income) in

equity investees, net of

tax

75,125

(445,618)

(341,265)

(786,883)

(108,516)

Net income(loss)

(384,515,218)

54,289,102

123,037,912

177,327,014

24,454,513

Net loss/(income)

attributable to non-

controlling interests

35,800,468

3,768,594

1,308,704

5,077,298

700,192

Net income attributable

to ordinary shareholders

(348,714,750)

58,057,696

124,346,616

182,404,312

25,154,705

Net earnings per share

Class A ordinary share-

basic and diluted

(3.38)

0.57

1.22

1.79

0.25

Class B ordinary share-

basic and diluted

(3.38)

0.57

1.22

1.79

0.25

Net earnings per ADS

Class A ordinary share-

basic and diluted

(3.38)

0.57

1.22

1.79

0.25

Class B ordinary share-

basic and diluted

(3.38)

0.57

1.22

1.79

0.25

Weighted average

shares outstanding

Class A ordinary share-

basic and diluted

68,286,954

67,416,046

67,416,046

67,416,046

67,416,046

Class B ordinary share-

basic and diluted

34,762,909

34,762,909

34,762,909

34,762,909

34,762,909

Other comprehensive

income, net of tax

Foreign currency

translation adjustments

(9,730,001)

810,574

185,533

996,107

137,370

Comprehensive income,

net of tax

(394,245,219)

55,099,676

123,223,445

178,323,121

24,591,883

Comprehensive

loss/(income) attributable

to non-controlling interests

35,800,468

3,768,594

(4,843,631)

(1,075,037)

(148,254)

Comprehensive income

(loss) attributable to

ordinary shareholders

(358,444,751)

58,868,270

118,379,814

177,248,084

24,443,629

GreenTree Hospitality Group Ltd.

Unaudited Hotel Business Results

Six Months

 Ended

Three Months Ended

Six Months Ended

 June 30, 2022

March 31,

2023

June 30,

2023

June 30, 2023

June 30,

2023

RMB

RMB

RMB

RMB

US$

Revenues

Leased-and-operated revenues

171,272,365

82,073,240

131,490,687

213,563,927

29,451,812

Franchised-and-managed revenues

275,539,547

169,480,457

177,936,543

347,417,000

47,910,995

Others

10,564,787

1,036,848

1,188,732

2,225,580

306,921

Total revenues

457,376,699

252,590,545

310,615,962

563,206,507

77,669,728

Operating costs and

expenses

Hotel operating costs

(307,750,028)

(134,236,998)

(150,127,380)

(284,364,378)

(39,215,641)

Selling and marketing

expenses

(18,852,606)

(11,075,999)

(13,762,606)

(24,838,605)

(3,425,400)

General and

administrative expenses

(99,724,402)

(46,092,069)

(44,443,478)

(90,535,547)

(12,485,423)

Other operating expenses

(2,048,734)

(151,220)

(692,344)

(843,564)

(116,333)

Other general expenses

(490,619,710)

(11,664,345)

(4,309,239)

(15,973,584)

(2,202,858)

Total operating costs

and expenses

(918,995,480)

(203,220,631)

(213,335,047)

(416,555,678)

(57,445,655)

Other operating income

3,917,398

2,608,096

11,183,689

13,791,785

1,901,974

Income from operations

(457,701,383)

51,978,010

108,464,604

160,442,614

22,126,047

Interest income and other,

net

23,730,138

7,475,298

9,597,042

17,072,340

2,354,383

Interest expense

(15,178,612)

(4,724,690)

(3,167,262)

(7,891,952)

(1,088,350)

Gains (losses) from

investment in equity

securities

21,687,584

(4,536,562)

(263,836)

(4,800,398)

(662,005)

Other income, net

14,664,617

(2,426,540)

76,946,162

74,519,622

10,276,727

Income before income

taxes

(412,797,656)

47,765,516

191,576,710

239,342,226

33,006,802

Income tax expense 

51,800,695

9,365,855

(56,097,180)

(46,731,325)

(6,444,544)

Income (loss) before

share of gains in equity

investees

(360,996,961)

57,131,371

135,479,530

192,610,901

26,562,258

Share of loss/(income) in

equity investees, net of

tax

75,125

(445,618)

(341,265)

(786,883)

(108,516)

Net income(loss)

(360,921,836)

56,685,753

135,138,265

191,824,018

26,453,742

GreenTree Hospitality Group Ltd.

Unaudited Restaurant Business Results

Six Months 

Ended

Three Months Ended

Six Months Ended

 June 30, 2022

March 31,

2023

June 30,

2023

June 30, 2023

June 30,

2023

RMB

RMB

RMB

RMB

US$

Revenues

Leased-and-operated revenues

171,008,920

89,376,893

78,963,181

168,340,074

23,215,158

Franchised-and-managed revenues

18,229,310

9,046,396

8,309,496

17,355,892

2,393,487

Wholesale and others

62,284,229

28,765,802

17,666,895

46,432,697

6,403,362

Total revenues

251,522,459

127,189,091

104,939,572

232,128,663

32,012,007

Operating costs and

expenses

Restaurant operating

costs

(234,911,742)

(109,219,983)

(95,088,176)

(204,308,159)

(28,175,384)

Selling and marketing

expenses

(9,717,435)

(4,939,580)

(4,446,065)

(9,385,645)

(1,294,340)

General and

administrative expenses

(21,847,196)

(11,663,076)

(9,675,734)

(21,338,810)

(2,942,756)

Other operating expenses

(2,240,920)

(1,341,263)

(5,649,391)

(6,990,654)

(964,055)

Other general expenses

-

-

-

-

-

Total operating costs

and expenses

(268,717,293)

(127,163,902)

(114,859,366)

(242,023,268)

(33,376,535)

Other operating income

1,126,309

551,423

327,709

879,132

121,238

Income from operations

(16,068,525)

576,612

(9,592,085)

(9,015,473)

(1,243,290)

Interest income and other,

net

312,420

153,716

153,295

307,011

42,339

Interest expense

(2,262,963)

(803,371)

(701,207)

(1,504,578)

(207,491)

Gains (losses) from

investment in equity

securities

-

-

-

-

-

Other income, net

87,152

276,958

172,926

449,884

62,041

Income before income

taxes

(17,931,916)

203,915

(9,967,071)

(9,763,156)

(1,346,401)

Income tax expense

(5,271,945)

(2,407,407)

(1,940,124)

(4,347,531)

(599,552)

Income (loss) before

share of gains in equity

investees

(23,203,862)

(2,203,492)

(11,907,194)

(14,110,686)

(1,945,953)

Share of loss/(income) in

equity investees, net of

tax

-

-

-

-

-

Net income(loss)

(23,203,862)

(2,203,492)

(11,907,194)

(14,110,686)

(1,945,953)

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements

Six Months

Ended

Six Months

Ended

Six Months

Ended

Six Months

Ended

 June 30, 2022

 June 30, 2022

 June 30,

2022

 June 30, 2022

Hotel

Restaurant

Elimination

Total

RMB

RMB

RMB

RMB

Revenues

Leased-and-operated hotels

171,272,365

171,008,920

(229,756)

342,051,529

Franchised-and-managed

hotels

275,539,547

18,229,310

293,768,857

Wholesale and Others

10,564,787

62,284,229

72,849,016

Total revenues

457,376,699

251,522,459

(229,756)

708,669,402

Operating costs and

expenses

Operating costs

(307,750,028)

(234,911,742)

(289,605)

(542,951,375)

Selling and marketing

expenses

(18,852,606)

(9,717,435)

(28,570,041)

General and administrative

expenses

(99,724,402)

(21,847,196)

(121,571,598)

Other operating expenses

(2,048,734)

(2,240,920)

(4,289,654)

Other general expenses

(490,619,710)

(490,619,710)

Total operating costs and

expenses

(918,995,480)

(268,717,293)

(289,605)

(1,188,002,378)

Other operating income

3,917,398

1,126,309

5,043,707

Income from operations

(457,701,383)

(16,068,525)

(519,361)

(474,289,269)

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements

Six Months

Ended

Six Months

Ended

Six Months

Ended

Six Months

Ended

 June 30, 2023

 June 30, 2023

 June 30, 2023

 June 30, 2023

Hotel

Restaurant

Elimination

Total

RMB

RMB

RMB

RMB

Revenues

Leased-and-operated hotels

213,563,927

168,340,074

(1,125,179)

380,778,822

Franchised-and-managed

hotels

347,417,000

17,355,892

364,772,892

Wholesales and others

2,225,579

46,432,698

48,658,277

Total revenues

563,206,506

232,128,664

(1,125,179)

794,209,991

Operating costs and

expenses

Operating costs

(284,364,378)

(204,308,159)

610,088

(488,062,449)

Selling and marketing expenses

(24,838,605)

(9,385,645)

(34,224,250)

General and administrative

expenses

(90,535,547)

(21,338,810)

(111,874,357)

Other operating expenses

(843,564)

(6,990,654)

(7,834,218)

Other general expenses

(15,973,584)

(15,973,584)

Total operating costs and

expenses

(416,555,678)

(242,023,268)

610,088

(657,968,858)

Other operating income

13,791,785

879,132

14,670,917

Income from operations

160,442,613

(9,015,472)

(515,091)

150,912,050

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

Six Months

Ended

Three Months Ended

Six Months Ended

 June 30,

2022

 March 31,

2023

 June 30,

2023

 June 30,

2023

 June 30,

2023

RMB

RMB

RMB

RMB

US$

Operating

activities:

Net (loss) income

-384,515,218

54,289,102

123,037,911

177,327,013

24,454,513

Depreciation and

amortization

79,849,031

31,080,092

35,745,507

66,825,599

9,215,672

Impairment of long

lived assets

56,212,849

2,900,000

2,900,000

399,928

Impairment of

goodwill

91,236,480

Share of (gains)

losses in equity

method investments

-75,125

445,618

341,265

786,883

108,516

Non-cash lease

expense

41,659,260

64,053,832

70,769,259

134,823,091

18,592,954

Loss from disposal

of a subsidiary

13,944,925

1,223,952

1,223,952

168,791

Interest income

-262,334

-390,378

-1,267,532

-1,657,910

-228,636

Bad debt expense

340,846,428

12,359,278

6,320,196

18,679,474

2,576,017

Losses and

impairment (Gains)

on equity securities

held

-21,687,584

4,536,562

263,836

4,800,398

662,005

(Gains) losses on

disposal of property

and equipment

3,050,035

-113,587

341,428

227,841

31,421

Foreign exchange

(gains) losses

-12,024,153

987,543

-2,075,742

-1,088,199

-150,070

Share-based

compensation

271,139

-11,636

40,228

28,592

3,943

Common control

acquisition

519,360

257,546

257,546

515,092

71,034

Changes in

operating assets and

liabilities

-65,089,156

-6,084,179

-86,198,991

-92,283,170

-12,726,431

Net cash provided

by operating

activities

143,935,937

165,533,745

147,574,911

313,108,656

43,179,657

Investing

activities:

Purchases of

property and

equipment

-30,771,557

-34,116,117

-37,617,117

-71,733,234

-9,892,465

Purchases of

intangible assets

-60,215

-42,454

-309,827

-352,281

-48,582

Proceeds from

disposal of property

and equipment

2,288,823

6,973,574

7,723,107

14,696,681

2,026,765

Purchases of

investments

-48,860,000

-51,370,000

-51,370,000

-7,084,247

Proceeds from

investments

506,295,349

110,300,378

61,142,806

171,443,184

23,643,096

Loan advances

94,927,368

27,302,903

48,235,746

75,538,649

10,417,256

Loan collections

-200,868,160

-8,029,596

-1,945,000

-9,974,596

-1,375,560

Net cash (used in)

provided by

investing activities

322,951,608

102,388,688

25,859,715

128,248,403

17,686,263

Financing

activities:

Distribution to the

shareholders

-40,999,458

Loan from non-

controlling interest

300,000

Repayment of

short-term

borrowings

-169,100,000

-136,600,000

-17,800,000

-154,400,000

-21,292,734

Proceeds from bank

borrowings

25,300,000

117,000,000

117,000,000

16,135,038

Capital contribution 

from non-controlling

interest holders

-1,600,000

Net cash provided

by (used in)

financing

activities

-186,099,458

-19,600,000

-17,800,000

-37,400,000

-5,157,696

Effect of exchange

rate changes on

cash and cash

equivalents

649,388

-40,524

383,575

343,051

47,309

Net (decrease)

increase in cash

and cash equivalents

281,437,475

248,281,909

156,018,201

404,300,110

55,755,533

Cash and cash

equivalents at the

beginning of the

period

385,452,920

734,629,202

734,629,202

101,310,000

Cash and cash

equivalents at the

end of the period

666,890,395

982,911,111

156,018,201

1,138,929,312

157,065,533

GreenTree Hospitality Group Ltd.

Unaudited Reconciliation of GAAP and Non-GAAP Results

Six Months Ended

 June 30, 2022

 June 30, 2023

June 30, 2023

RMB

RMB

US$

Net income

(384,515,218)

177,327,013

24,454,513

Deduct:

Other operating income

5,043,707

14,670,917

2,023,212

Interest income and other, net

24,042,558

17,379,351

2,396,722

Gains from investment in equity

securities

21,687,584

-

-

Share of gain in equity investees, net

of tax

75,125

-

-

Other income, net

14,751,769

74,969,507

10,338,768

Add:

Other operating expenses

4,289,654

7,834,218

1,080,388

Other general expenses

490,619,710

15,973,584

2,202,858

Income tax expenses (benefits)  

(46,658,590)

50,950,083

7,026,338

Share of loss in equity investees, net

of tax

-

786,883

108,516

Interest expenses

17,441,575

9,396,530

1,295,841

Depreciation and amortization

79,849,031

66,825,599

9,215,672

Losses from investment in equity

securities

-

4,800,398

662,005

Adjusted EBITDA (Non-GAAP)

95,425,419

226,874,533

31,287,429

Six Months Ended

 June 30, 2022

 June 30, 2023

June 30, 2023

RMB

RMB

US$

Net income

(384,515,218)

177,327,013

24,454,513

Deduct:

Government subsidies (net of 25%

tax)

1,251,065

6,671,305

920,015

Gains from investment in equity

securities (net of 25% tax)

16,265,688

-

-

Other income (net of 25% tax)

11,063,827

56,227,130

7,754,076

Add:

Share-based compensation

271,139

28,592

3,943

Losses from investments in equity

securities (net of 25% tax)

-

3,600,299

496,504

One-time fees and expenses

4,588,086

2,055,989

283,534

Other general expenses

490,619,710

15,973,584

2,202,858

Impairment charges and provisions

for other assets

-

-

-

Core net income (Non-GAAP)

82,383,137

136,087,042

18,767,261

Core net income per ADS (Non-

GAAP)

Class A ordinary share-basic and

diluted

0.80

1.33

0.18

Class B ordinary share-basic and

diluted

0.80

1.33

0.18

Hotel Operational Data  

June 30, 2022 

June 30, 2023

Total hotels in operation:

4,669

4,108

    Leased and owned hotels

67

65

    Franchised hotels

4,602

4,043

Total hotel rooms in operation

332,073

303,387

    Leased and owned hotels

6,986

7,137

    Franchised hotels

325,087

296,250

Number of cities

367

357

Quarter Ended

2022 Q1

2023Q1

 Occupancy rate (as a percentage)

 Leased-and-owned hotels

52.6 %

62.9 %

 Franchised hotels

60.2 %

71.9 %

 Blended

60.0 %

71.7 %

 Average daily rate (in RMB)

 Leased-and-owned hotels

 

199

 

229

 Franchised hotels

 

152

 

166

 Blended

 

153

 

167

RevPAR (in RMB)

 Leased-and-owned hotels

 

105

 

144

 Franchised hotels

 

91

 

119

 Blended

 

92

 

120

Quarter Ended

2022 Q2

2023Q2

 Occupancy rate (as a percentage)

 Leased-and-owned hotels

57.1 %

74.6 %

 Franchised hotels

62.3 %

77.9 %

 Blended

62.2 %

77.8 %

 Average daily rate (in RMB)

 Leased-and-owned hotels

 

217

 

255

 Franchised hotels

 

145

 

179

 Blended

147

181

RevPAR (in RMB)

 Leased-and-owned hotels

 

124

 

190

 Franchised hotels

 

90

 

139

 Blended

 

91

 

141

Number of Hotels in Operation

Number of Hotel Rooms in

Operation

June 30,

2022

June 30,

2023

June 30,

2022

June 30,

2023

 Mid-to-up-scale

528

438

47,347

42,338

 GreenTree Eastern

201

217

22,402

23,205

 Deepsleep Hotel

7

7

467

534

 Gem

52

54

4,728

4,873

 Gya

66

70

5,639

5,904

 Vx

81

90

7,069

7,822

Urban Garden and others

121

-

7,042

-

 Mid-scale

2,999

2,933

233,950

229,270

 GreenTree Inn

2,183

2259

180,255

181,015

 GT Alliance

521

545

37,545

39,091

 GreenTree Apartment

19

21

1,260

1,351

Vatica                                

110

108

7,969

7,813

City 118 Selected and others

166

-

6,921

-

 Economy hotels

1,142

737

50,776

31,779

Shell

648

737

28,030

31,779

City 118 and others

494

-

22,746

-

Total

4,669

4,108

332,073

303,387

Restaurant Operational Data

June 30, 2022 

June 30, 2023

Total restaurants in operation:

280

218

    Leased and owned restaurants

146

104

    Franchised restaurants

134

114

Number of cities

81

66

Da Niang Dumplings

245

182

Bellagio

35

36

Total restaurants in operation:

280

218

Quarter Ended

2022 Q1

2023Q1

ADT

Leased-and-owned restaurants

170

143

Franchised restaurants

95

81

Blended

130

110

AC (in RMB)

Leased-and-owned restaurants

51

61

Franchised restaurants

39

46

Blended

46

55

ADS (in RMB)

Leased-and-owned restaurants

8,640

8,716

Franchised restaurants

3,712

3,745

Blended

6,027

6,080

Quarter Ended

2022 Q2

2023Q2

ADT

Leased-and-owned restaurants

92

142

Franchised restaurants

56

86

Blended

78

120

AC (in RMB)

Leased-and-owned restaurants

60

61

Franchised restaurants

45

46

Blended

52

53

ADS (in RMB)

Leased-and-owned restaurants

5,505

8,657

Franchised restaurants

2,503

3,936

Blended

4,051

6,371

[1]  The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB 7.2513 on June 30, 2023 as set forth in H.10 statistical release of the U.S. Federal Reserve Board.

[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 the provision for bad debts, 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 abovementioned definition.

[3]  Core net income is calculated as net income plus share-based compensation, losses from investments in equity securities (net of 25% tax), one-time fees and expense and asset impairment/accrued bad debts 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).