GreenTree Hospitality Group Ltd. · NYSE:GHG

GreenTree Hospitality — Q3 2018 Earnings Presentation

24 slides from GreenTree Hospitality's earnings presentation, Nov 19, 2018

  1. Slide 1: GreenTree Hospitality Group 2018 Q3 Results Presentation

    Comfort Quality Value Comfort Convenience Quality Value Convenience GreenTree Hospitality Group Ltd. 2018 Q3 Results Presentation | November 19, 2018

  2. Slide 2: Disclaimer

    Disclaimer This presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities. Neither this presentation nor any part of it shall form the basis of or be relied upon in connection with any cont

  3. Slide 3: Agenda

    Agenda 1 Business and Strategy Review 4 2 Operational and Financial Highlights 12 3 Appendix: Hotel Performance 21 3

  4. Slide 4: 1. Business and Strategy Review

    1. Business and Strategy Review 4

  5. Slide 5: Q3 2018 Performance Overview

    Q3 2018 Performance Overview As of September 30, 2018 98.8% F&M Hotels (1) 2,558 Hotels 70.0% Revenue Contribution from F&M Hotels 209,463 Rooms ADR: +4.4% YoY to RMB167 Occupancy: -0.2% YoY to 87.2% 504 Hotels Contracted for or under Development RevPAR: +4.3% YoY to RMB146 Revenue +21.6% YoY to RMB

  6. Slide 6: Continued Strategic Focus on the F&M Model

    Continued Strategic Focus on the F&M Model 98.8% of Our Hotel Portfolio are F&M Hotels F&M Hotels Contribute ~70% of Our Revenue % of F&M hotels Revenue, % 100 100 5 7 7 8 8 8 98.9 98.9 98.9 98.8 21 80 24 22 22 99 32 28 98.4 98 60 97.6 97 40 69 70 71 70 63 65 96 20 95 0 2015 2016 2017 18Q1 18Q2 18Q3

  7. Slide 7: Fast-Growing Loyal Membership Base

    Fast-Growing Loyal Membership Base 94.9% of rooms nights sold through direct sales Robust Membership Growth Increase in Corporate Members MM ‘000 30 1,250 26 1,020 25 1,000 820 21 20 750 15 500 Dec 31, 2017 Sep 30, 2018 Dec 31, 2017 Sep 30, 2018 7

  8. Slide 8: Consistently Healthy RevPAR Growth

    Consistently Healthy RevPAR Growth Quarterly RevPAR RMB 152 145 150 142 131 131 135 124 123 124 145 115 119 139 135 117 129 111 108 100 129 117 100 92 50 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 F&M L&O RevPAR YoY Growth for L&O Hotels RevPAR YoY Growth for F&M Hotels RMB RMB 200 200 1

  9. Slide 9: Continue to Build up Hotel Pipeline to Fuel Accelerated Growth

    Continue to Build up Hotel Pipeline to Fuel Accelerated Growth Business to Mid-to-up-scale and Economy Segments Strengthening Hotel Pipeline Fuel Stronger Growth and a More Diversified Portfolio Number of hotels contracted for or under development GreenTree Eastern, Gme, Gya Vatica and Shell & VX 40

  10. Slide 10: Further Development of Business to Mid-to-up-scale Brands

    Further Development of Business to Mid-to-up-scale Brands ● Mid-to-up-scale business hotels designed to ● Mid-to-up-scale smart, fashionable and ● Mid-to-up-scale leisure hotels that combine be a calm and unique haven for business trendy hotels highlighting individuality youthful trends with artisti

  11. Slide 11: Four newly added L&O hotels

    Four newly added L&O hotels Number of Brands Name Location Rooms Yancheng, Jiangsu GreenTree Eastern Yancheng Administration Center Hotel Province 88 Foshan, GreenTree Eastern FoShan ShunDe District Huicong Electronics Store Hotel Guangdong Province 193 GreenTree Inn Xuzhou High Speed Railway Zhanqi

  12. Slide 12: 2. Operational and Financial Highlights

    2. Operational and Financial Highlights 12

  13. Slide 13: Rapid Growth with Low Hotel Closure Rate

    Rapid Growth with Low Hotel Closure Rate Increasing Number of Hotels in Operation Hotel Openings / Closures Number of hotels 2,558 30 500 2,500 2,289 400 26 300 2,119 302 316 27 200 1,964 2,000 100 Opened in 32 99 Opened in 109 104 146 Q3 2016 Q3 2017 80 0 (88) (100) (15) (24) (22) (100) 2016 2017 1

  14. Slide 14: Improving ADR and Stable Occupancy Lead to Sustained RevPAR Growth

    Improving ADR and Stable Occupancy Lead to Sustained RevPAR Growth The Company has achieved a steady 4.3% RevPAR YoY growth. ADR Occupancy RevPAR RMB % RMB 250 100 152 150 145 145 88 88 139 210 85 131 200 189 80 77 73 120 117 70 166 166 159 155 150 60 90 100 40 60 50 20 30 0 0 0 16Q3 17Q3 18Q3 16Q3

  15. Slide 15: Robust Revenue Growth

    Robust Revenue Growth Total Revenue Revenue from F&M Hotels RMB MM RMB MM 800 600 489 695 396 400 180 600 571 200 149 0 2017Q3 2018Q3 First nine First nine months of months of 2017 2018 Revenue from L&O Hotels 400 RMB MM 200 257 151 137 211 200 100 57 48 0 0 2017Q3 2018Q3 First nine First nine 2017Q

  16. Slide 16: Effective Cost Structure

    Effective Cost Structure Total Operating Costs and Expenses(1) Hotel Operating Costs RMB MM % of Revenue RMB MM 30.6% % of Revenue 400 29.8% 30% 500 50% 29.6% 28.3% 46.1% 207 44.8% 200 175 60 76 43.4% 43.5% 400 40% 0 0% First nine First nine 2017Q3 2018Q3 months of 2017 months of 2018 Selling and Ma

  17. Slide 17: Strong and Improving Profitability - 18Q3 vs. 17Q3

    Strong and Improving Profitability - 18Q3 vs. 17Q3 Gross Profit and Margin Adjusted EBITDA and Margin(1) Core Net Income/Net Income and Margin(2) RMB MM % RMB MM % RMB MM % 250 80% 250 70% 59.3% 240 60% 71.7% 70.4% 60.9% 59.6% 52.9% 48.8% 200 50% 181 45.5% 156 160 152 40% 151 126 125 125 40% 125 35%

  18. Slide 18: Strong and Improving Profitability - First 9 months of 2018 vs. 2017

    Strong and Improving Profitability – First 9 months of 2018 vs. First 9 months of 2017 Gross Profit and Margin Adjusted EBITDA and Margin(1) Core Net Income/Net Income and Margin(2) RMB MM % RMB MM % RMB MM % 750 80% 750 70% 600 60% 69.4% 70.2% 58.9% 51.6% 57.5% 48.9% 46.1% 488 43.9% 500 500 400 40%

  19. Slide 19: Abundant Cash Balances to Support Capital Investments and Acquisitions

    Abundant Cash Balances to Support Capital Investments and Acquisitions Strong Earnings and the IPO Proceeds Provide Resources for Future Business Expansion RMB MM Total cash and cash equivalents, restricted cash, short-term investments and securities of RMB1,996MM as of Sep 30, 2018 2,500 (23) 52 2,

  20. Slide 20: Guidance; Thank you! Q&A

    Guidance • Expect total revenue for the full year of 2018 to grow 20-25% from 2017 Thank you! Q&A 20

  21. Slide 21: Appendix: Hotel Performance

    Appendix: Hotel Performance 21

  22. Slide 22: Our Diverse Hotel Brands

    Our Diverse Hotel Brands We have established a full product suite to capture a wide spectrum of market opportunities Year Hotels Hotel Rooms Our Brands Price (RMB) Founded in Operation in Operation Business to Mid-to-up- Business to scale: Mid-to-up-scale 300–600 2012 74 8,270 (1) 280–350 2017 7 599

  23. Slide 23: Hotel Breakdown by Segment

    Hotel Breakdown by Segment Number of Hotels in Operation Number of Hotel Rooms in Operation 2017Q3 2018Q3 2017Q3 2018Q3 Economy hotels 201 358 11,307 19,160 Vatica 92 117 6,822 8,698 Shell 109 241 4,485 10,462 Mid-scale 1,878 2,119 162,490 181,434 GreenTree Inn 1,655 1,824 144,639 158,174 GT Allianc

  24. Slide 24: Hotel Operational Data

    Hotel Operational Data 2017Q3 2018Q3 2017Q3 2018Q3 Occupancy rate (as a percentage) Total hotels in operation 2,119 2,558 Leased-and-owned hotels 76.9% 72.6% Leased and owned hotels 27 30 Franchised hotels 87.7% 87.5% Blended 87.4% 87.2% Franchised hotels 2,092 2,528 Average daily rate (in RMB) Leas

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