Huazhu Group Ltd (NASDAQ: HTHT) stock fell 1.7% in the pre market session on May 22^nd, 2019 (Source: Google finance) after the company missed the earnings estimate for the first quarter of FY 19. HTHT in the first quarter of FY 19 has reported the adjusted earnings per share of 11 cents, missing the analysts’ estimates for the adjusted earnings per share of 15 cents.  The company has reported the 14.2% increase in the net revenues for the first quarter of 2019 to RMB2.4 billion (US$356 million), primarily due to the hotel network expansion and RevPAR growth. HTHT has reported the adjusted net income attributable to Huazhu Group Limited (non-GAAP) for the first quarter of 2019 was RMB222 million (US$33 million), compared to RMB282 million in the first quarter of 2018. HTHT posted the adjusted EBITDA (non-GAAP) for the first quarter of 2019 was RMB528 million (US$79 million, 22.1% on net revenue), compared with RMB559 million (26.7% on net revenue) for the first quarter of 2018. Operating cash inflow for the first quarter of 2019 was RMB147 million (US$22 million). Investing cash outflow for the first quarter was RMB378 million (US$56 million). Financing cash outflow for the first quarter was RMB194 million (US$29 million). As of March 31, 2019, the Company had a total balance of cash, cash equivalents and restricted cash of RMB4.5 billion (US$664 million). As of March 31, 2019, the Company had a total loan balance of RMB10.0 billion (US$1.5 billion) and the unutilized credit facility available to the Company was RMB1.9 billion.

Net revenues from leased and owned hotels for the first quarter of 2019 rose 8.2% to RMB1.7 billion (US$254 million). Net revenues from manachised and franchised hotels for the first quarter of 2019 grew 30.3% to RMB663 million (US$99 million). This segment accounted for 27.8% of the company’s net revenues in the first quarter of 2019, up from 24.3% a year ago.

Moreover, Hotel operating costs for the first quarter of 2019 grew 15.2% to RMB1.7 billion (US$257 million), compared to RMB1.5 billion in the first quarter of 2018. During the first quarter of 2019, HTHT opened 226 hotels, including 11 leased hotels and 215 manachised hotels and franchised hotels. The company had closed a total of 60 hotels, including 12 leased hotels and 48 manachised and franchised hotels, during the first quarter of 2019.

In the second quarter of 2019, the Company expects net revenues to grow 13% to 15% year-over-year. The company has revised the gross opening target of 800-900 hotels to 1,100-1,200 hotels, and hotel closure to 200-250 in 2019.