Decent results drive GreenTree Hospitality Group Ltd – ADR (NYSE: GHG) stock

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GreenTree Hospitality Group Ltd – ADR (NYSE: GHG) stock rose 5.28% on April 14th, 2020 (Source: Google finance) and continued its momentum on April 15th, 2020 (as of 1:53 pm GMT-4; Source: Google finance) rising over 1.9%. The company in the fourth quarter of FY 19 has reported 48.9% increase in the net income to RMB74.5 million ( US$10.7 million ). By the end of December 2019, the company had grown the geographic coverage to 339 cities across China with 3,957 hotels in operation, which reflects an increase of 43.5% over the prior year.

For the fourth quarter of 2018, the company has reported 20.4% rise in total revenues to RMB289.4 million and non-GAAP EBITDA increased 11.4% to RMB162.3 million driven by four factors, that includes the opening of 190 F&M hotels, improved RevPAR, growth in the loyalty membership program, and the consolidation of Urban and Argyle into the financial statements. Total revenues from leased-and-operated hotels for the fourth quarter of 2019 rose 20.9% to RMB68.6 million (US$9.8 million). Total revenues from franchised-and-managed hotels for the fourth quarter of 2019 rose 20.3% to RMB220.9 million (US$31.7 million).

At the end of December, 2019 , the company had a pipeline with an aggrgate of 949 hotels contracted for or under development, among which 54 hotels were in the luxury hotel segment, 181 in the mid-to-up-scale segment, 364 in the mid-scale segment, and 350 in the economy segment. During this quarter, the company had closed 41 hotels, 9 due to brand upgrade, and 20 on the back of their non-compliance with the company’s brand and operating standards. The remaining 12 were closed for property related issues. The company had added a net opening of 149 hotels to its portfolio.

The company’s blended ADR grew 3.6% year-over-year to RMB170, while the occupancy rate declined by 2.2% to 78.2%, mainly due to the consolidation of the Urban Hotels and RevPAR increased 0.9% to RMB133. The revenue per available room, or RevPAR, increased 0.9% to RMB133 in the fourth quarter of 2019.

In the fourth quarter of 2019, the company had opened 190 hotels and the company ended the year with 949 hotels in the pipeline, which is up 121% year-over-year. The company has also completed the consolidation of Argyle Hotel Management Group in Q2 and Urban Hotel Group in December 2019, both chains are highly complementary to GreenTree’s hotel portfolio and geographic coverage. GHG continued to rollout the F&B concept by branding F&B services into the hotels to turn them into profit centers and attract additional guests for the- hotels.

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