GreenTree Hospitality Group (GHG) Q4 2024 earnings summary

Executive summary

• Q4 2024 total revenues declined 18.2% year-over-year to RMB 304.8 million, with hotel revenues down 17.1% and restaurant revenues down 16.8%.

• Net loss for Q4 was RMB 72.8 million, mainly due to impairments in the restaurant business, but adjusted net income rose 26.8% to RMB 77.3 million with a 25.4% margin.

• Adjusted EBITDA for Q4 was RMB 71.5 million, down 38.3% year-over-year, with a margin of 23.5%.

• Cash from operations improved to RMB 74.2 million from negative RMB 13.5 million a year ago.

• Restaurant business transformation advanced, with 90% of stores now franchised/managed and 50% street stores, up from 78% and 40% respectively a year ago.

Financial highlights

• Full-year 2024 revenues were RMB 1,343.4 million, down 17.4% year-over-year; Q4 gross profit was RMB 105.5 million, down 34.3%.

• Hotel RevPAR in Q4 was RMB 116, down 9.6% year-over-year; restaurant average daily sales per store were RMB 4,234, down 16.8%.

• Adjusted EBITDA for Q4 was RMB 71.5 million, margin 23.5%; core net income for Q4 was RMB 57.8 million, down 22.3%.

• Cash and equivalents at year-end were RMB 1,839.1 million.

• Hotel business net income per ADS for Q4 was RMB 0.29; group net income per ADS was negative RMB 0.17.

Outlook and guidance

• 2025 organic hotel business total revenues are expected to be flat compared to 2024.

• Plan to open approximately 480 hotels and close about 200, for a net addition of 280 hotels in 2025.

• RevPAR for 2025 expected to be flat, with a 5% decline in Q1 and gradual recovery in Q2 and Q3.

• Restaurant business aims for 60 new openings in 2025, focusing on franchised and street stores.