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| The first one, as for the seasonality reason and as the recovery of the industry, the performance of the restaurants was better than before |
| We will continue to implement our long-term strategic development plan, focused on helping franchisees to maintain high-quality service and operation and expand our hotel network and the sales channel, provide stable operating profitability and maintain long-term stable growth |
| So -- actually, we have observed very strong leisure term demand in the summer travel season and also the national day, The Golden Week |
| On Slide 14, during the third quarter of 2023, we closed 10 restaurants in areas of decreasing economic activities, helping improving the profitability |
| The first one is about the hotel -- the restaurant margin, why is better? Why was better than before? Because in this quarter, the restaurant -- the net income of the restaurant was nearly RMB 10 million, that’s much better than before, I think for several reasons |
| Net income of hotels trend positive year-over-year at RMB 108.5 million |
| And so we have also demonstrated that we’re able to make most of our units performing even under some of the challenging conditions |
| And the CapEx at the very beginning the investment and profitability from the -- it was much better than before |
| We had a good third quarter with a strong recovery in our hotel business year-over-year as tourism and business travel continued to rebound |
| On Slide 7, operating performance was great |
| So secondly, that will continue to improve our core efficiencies and to improve the system-wide standard of our hotels and the restaurant in terms of basically the products and service consistent quality improvement |
| RevPAR increased 30.5% year-over-year, reaching as high as 110% of its third quarter of 2019 levels in July and August, with a surge in the number of tourists during the summer vacation |
| We have implemented -- the Board of Directors implemented share purchase -- repurchase program because we think the share price is undervalued and -- due to various factors |
| Second reason for [Da Niang], we closed 85 unprofitable hotel stores over the past 12 months, and the profitability of the remaining hotels was much better than before |
| And with consistent growth and consistent profitability, we believe the performance and also our -- basically the company’s liquidity will demonstrate the value of our companies |
| We’re pretty confident in the next 3 years or so with many, many of our new standardized branded hotels in strategic located areas and in a fast-growing the second and third tier cities, was -- unleash the new potentials of the company |
| So as we have shared with you the strengths and also the key value system of the GreenTree is to help our franchisees to achieve their profitabilities |
| So we can expect the profitability of Da Niang brands in the fourth quarter as well, although the sales -- I mean the revenues decreased much year-over-year speaking, okay? Alex Xu The future margin, Simon, that we projected, that will slightly -- will continue to improve the margin, and we hope that the previous margin we generated will achieve that -- in that level with the increase of our brand quality overall in terms of products and services, we’ll continue to do, I think, a better drop in that area |
| And corporate membership grew to 2.02 million, up from 1.92 million a year ago |
| Slide 8 shows the operating performance of restaurants with ADS continuing an upward trend and reaching the highest level in a long time |
| Unidentified Analyst Firstly, congratulations on the excellent performance in the third quarter |
| And for the total -- I mean, including the hotel and restaurant, the total margin -- EBITDA margin has increased more than 13%, has reached to 37.6% |
| That means if our lease operating hotels continues to recovery -- tend to positive, our blended EBITDA margin we are likely to increase the other 6.5%, okay? So that’s what we observed for the third quarter’s performance |
| Individual memberships grew to 88 million, up from 77 million a year ago |
| In the restaurant business, the number of individual members grew to 2.67 million, up 1.6% year-over-year |
| And core net income increased from RMB 5.4 million to RMB 118.1 million year-over-year |
| And that’s as far as this transaction, the Board believes, the private investors that the block sales would benefit the entire shareholders |
| So when we compare the third day -- the third date of the holiday period end, we find our RevPAR increased by 20% over the year of 2019 |
| But we think that with the repositioning of the restaurant locations, increase the food quality and both of our brands, we will continue to achieve the profitability |
| So overall, our Board of Directors have discussed many ways in the next few years to increase the profitability of the company and increase the share -- that liquidity, and we hope that the share price eventually will reflect the true value of the company |
| Statement |
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| And most of this -- our lease-operated hotels turned negative to positive profitability since this quarter |
| Also, there is a negative impact from the -- from the negative profitability of our lease operating hotels because you know we have opened more than 20 hotels during the COVID-19 |
| And the traffic to those supermarket malls are down significantly |
| And for restaurant business, the total revenues decreased by 13% year-over-year, that’s because the closure of 84 -- 85 lease-operated stores over the past 12 years |
| Due to the negative impact of the lease operating hotels to our EBITDA margin, that -- the impact was about 6.5% to our EBITDA margin |
| But on the November we do see a slightly downward trend on the RevPAR |
| Can you share a little bit more of the details or rationale on this transaction in October? We know that our trading volume, daily trading volume and liquidity has been relatively lower compared to our peers |
| So -- but some investors worry that it’s maybe a one-off pent-up demand after the China’s reopening |
| And with the sign-up initial application fees, I think that in the market overall, there is a downward trend in that area |
| So the RevPAR for the October compared with ‘19, that is a 5% decrease compared with the 2019 |
| So with regard to the RevPAR projection, as we discussed earlier, the remaining of the fourth quarter of 2023, we believe the pressure is there |
| And due to the various factors, especially during the pandemic, some of the business are not performing -- were not performing up to the standard |
| The pace of recovery of RevPAR slowed slightly in September but remained stable |
| So with regarding to the 2024, we believe the economic recovery will continue, but maybe I’m a little bit uncertain, we do not know |
| And secondly, due to the market competition, we also lowered some of our fees to our franchisees, such as reservation fees, such as the supporting fees in other areas |
| General and administrative expenses were RMB 26.7 million, down 50.9% compared with same quarter of last year |
| But at this moment, our November trend, we do see a slightly below the 2019 level |
| So we have observed, we still need -- I think considering the uncertainty and we have to work really hard to achieve that |
| From Slide 7, I observed that since the beginning of -- since mid-autumn festival, there was a very linear decline in terms of the RevPAR as a percentage to 2019 |
| On Slide 22, total hotel operating costs and expenses decreased 14.7% year-over-year to RMB 212.4 million and total hotel operating costs and expenses decreased 0.5% compared to the second quarter |
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