GreenTree Hospitality Group Ltd. Reports Fourth Quarter and Fiscal Year 2018 Financial Results

A total of 2,757hotels with 221,529 hotel rooms were in operation as of December 31,2018,compared to 2,558 hotels and 209,463 hotel rooms as of September 30,and compared to 2,289 hotels and 190,807 hotel rooms as of December 31,2017.

Total revenues increased 20.8% from the fourth quarter of 2017 to RMB249.9 million (US$36.3 million)[1] for the fourth quarter of 2018. Total revenues increased 21.4% year-over-year to RMB945.0 million (US$137.4 million)[1] for the full year 2018.

Adjusted EBITDA (non-GAAP) increased 35.2% from the fourth quarter of 2017 to RMB160.1 million (US$23.3 million)[1] for the fourth quarter of 2018. Adjusted EBITDA (non-GAAP) increased 30.5% year-over-year to RMB609.7 million (US$88.7 million)[1] for the full year 2018.

Net income was RMB53.8 million (US$7.8 million)[1] for the fourth quarter of 2018. Net income increased 38.1% from the same quarter of 2017 to RMB393.6 million (US$57.2 million)[1] for the full year 2018.

Core net income (non-GAAP) increased 33.4% from the fourth quarter of 2017 to RMB115.9 million (US$16.9 million)[1] for the fourth quarter of 2018. Core net income (non-GAAP) increased 31.8% year-over-year to RMB445.3 million (US$64.8 million) [1] for the full year 2018.

Basic and diluted net income per ADS were RMB0.53 (US$0.08)[1] for the fourth quarter of 2018. Basic and diluted net income per ADS were RMB3.97 (US$0.58)[1] for the full year 2018.

Basic and diluted core net income per ADS (non-GAAP) were RMB1.14 (US$0.17)[1]for the fourth quarter of 2018. Basic and diluted core net income per ADS (non-GAAP) were RMB4.49 (US$0.65)[1] for the full year 2018.

As of December 31,the Company had a strong pipeline with a total of 430 hotels contracted for or under development. For the fourth quarter of 2018,the Company opened 224 hotels of which all are F&M hotels,compared to 171 hotels of which all are F&M hotels for the fourth quarter of 2017. For the full year 2018,the Company opened 554 hotels,compared to 425 hotels for the full year 2017.

As of December 31,the Company had approximately 29 million individual loyal members (of which approximately 21 million are paid members) and over 1,270,000 corporate members,compared to approximately 26 million individual loyal members (of which approximately 20 million are paid members) and over 1,020,000 corporate members respectively,as of September 30,2018.

For the fourth quarter of 2018,the Company sold approximately 94.5% of its room nights through its direct sales channels,including its individual loyal members and corporate members,while all other third parties reservation channels,contributed approximately 5.5%. For the full year 2018,the Company sold approximately 95.0% of its room nights through its direct sales channels.

The Company provided guidance for growth in total revenue of 20%-25% from 2018.

SHANGHAI,March14,2019 -- GreenTree Hospitality Group Ltd. (NYSE: GHG) ("GreenTree",the "Company","we","us" and "our"),a leading franchised hotel operator in China,today announced its unaudited financial results for the fourth quarter and fiscal year of 2018.

FourthQuarter of 2018 Operational Highlights

As of December31,GreenTree had 29 leased-and-operated ("L&O") hotels and 2,728 franchised-and-managed ("F&M") hotels in operation in 290cities across China,compared to 30 L&O hotels and 2,528 F&M hotels in operation in 278 cities as of September30,compared to 26 L&O hotels and 2,263 F&M hotels in operation in 263 cities as of December 31,2017. The geographical coverage of cities grew by 27,with a year-over-year increase of 10.3%.

The Company opened 224 hotels of which all are F&M hotels,28in the mid-to-up-scale segment,86in the mid-scale segment and 110in the economy segment. Of the hotels opened,20 hotels were in Tier 1 cities[2],49 in Tier 2 cities[3] and the remaining 155 hotels in other cities in China,while the Company closed a total of 25 hotels in the quarter.

As of December31,the Company had a strong pipeline with a total of 430 hotels contracted for or under development.

The average daily room rate,or ADR,for all hotels in operation,was RMB164in the fourth quarter of 2018,an increase of 3.8% from the same quarter of 2017.

The occupancy rate for all hotels in operation was 80.4% in the fourth quarter of 2018,a decrease of 1.0% from the same quarter of 2017.

The revenue per available room,or RevPAR,which is calculated by multiplying our hotels' ADR by its occupancy rate,was RMB132in the fourthquarter of 2018,representing a 2.3% increase from the same quarter of 2017.

Operational Highlights for the Full Year 2018

For the full year 2018,of which 553 are F&M hotels and one L&O hotels,60in the mid-to-up-scale segment,271in the mid-scale segment and 223in the economy segment. Of the hotels opened,47hotels were in Tier 1 cities[4],121 in Tier 2 cities[5] and the remaining 386 hotels in other cities in China,while the Company closed a total of 86F&M hotels and one L&O hotel in this year.

The average daily room rate,was RMB164for the full year2018,an increase of 4.5% year over year.

The occupancy rate for all hotels in operation was 82.1% for the full year2018,a decrease of 0.5% year over year.

The revenue per available room,was RMB135for the full year 2018,representing a 3.8% year-over-year increase.

The Company sold approximately 95.0% of its room nights through its direct sales channels,while online travel agencies,or OTAs,only contributed approximately 5.0%.

The Company added one more brand called Wumian in the mid-scale segment during the third quarter. Wumian aims to provide comfortable,intimate,simple and stylish space to business travelers for "a deep sleep" experience.

The Company started its apartment business during the second half of the year,and opened one hotel in 2018.

The Company's App was ranked 2ndin terms of user activity on the "Intelligent Mobile Observatory"in hotel sector,a famous mobile big data query platform launched by TalkingData,as of December 31,2018.

"We remain committed to a steady and stable growth strategy as we explore the growing consumption trends in the second and third tier cities and expand our geographical coverage across China,covering 290 cities at the end of December 2018," commented Mr. Alex Xu,Chairman and Chief Executive Officer of GreenTree. "We are investing in select companies to develop strong partnerships that will enhance each other resources,particularly technology and talents,in order to create more value for our customers and franchisees. We will continue to explore similar investment opportunities and we remain interested in exploring appropriate value-enhancing acquisitions to help strengthen our hotel platform and increase long-term shareholder value."

Fourth Quarter of 2018 Financial Results

Quarter Ended

December 31,2017

December 31,2018

December 31,2018

RMB

RMB

USD

Revenues

Leased-and-operated hotels

53,589,572

56,834,473

8,266,231

Franchised-and-managed hotels

153,207,697

193,048,471

28,077,736

Total revenues

206,797,269

249,882,944

36,343,967

Full year 2018 Financial Results

Year Ended

December 31,2018

RMB

RMB

USD

Revenues

Leased-and-operated hotels

193,542,455

213,172,025

31,004,585

Franchised-and-managed hotels

584,358

731,833,909

106,440,828

Total revenues

778,131,813

945,005,934

137,445,413

Total revenuesfor the fourth quarter of 2018 were RMB249.9 million (US$36.3 million)[1],representing a 20.8% increase over the fourth quarter 2017. The increase in the fourth quarter of 2018 was primarily attributable to the 199 F&M hotels net addition to our network during this quarter,the addition of a new L&O hotel and the conversion of three F&M to L&O hotels during last quarter,improved RevPAR for both F&M and L&O hotels as well as membership growth; and was partially offset by the renovation of six L&O hotels since last quarter and the conversion of one L&O to an F&M hotel during this quarter.

Total revenues for the full year 2018 were RMB945.0 million (US$137.4 million)[1],representing a 21.4% increase over full year 2017. The year-over-year increase was primarily attributable to RevPAR growth of 3.8%,and the 468 hotels net addition,compared to 325 last year,as well as membership growth. Membership fee were divided into L&O and F&M revenues.

Total revenues from leased-and-operated hotelsfor the fourth quarter of 2018 were RMB56.8 million (US$8.3 million)[1],representing a 6.1% increase from the same quarter of 2017.

Total revenues from leased-and-operated hotels for the full year 2018 were RMB213.2 million (US$31.0 million)[1],representing a 10.1% year-over-year increase.

Total revenues from franchised-and-managed hotelsfor the fourth quarter of 2018 were RMB193.0 million (US$28.1 million)[1],representing a 26.0% increase from the same quarter of 2017. Initial franchise fees increased 2.0% in the fourth quarter of 2018 from the same quarter of 2017,primarily due to the gross opening of 224 hotels in the fourth quarter of 2018 as compared to 171 hotels opened in the fourth quarter of 2017,as well as a temporary waiver of initial franchisee fees for Shell hotels,which opened since the third quarter of 2018. The 29.3% increase from the fourth quarter of 2017 in recurring franchisee management fees and others was primarily due to RevPAR growth of 2.3% as well as growth in membership fees,and central reservation system ("CRS") usage fees,annual IT,marketing fees,hotel manager fees,which in turn resulted from the increased number of hotels and hotel rooms in operation.

Total revenues from franchised-and-managed hotels for the full year 2018 were RMB731.8 million (US$106.4 million)[1],representing a 25.2% year-over-year increase. Initial franchise fees increased 18.2% year over year forthe full year2018,primarily due to the gross opening of 553 hotels for the full year 2018 as compared to 425 hotels opened for the full year 2017. The 25.9% year-over-year increase in recurring franchisee management fees and others in full year 2018 was primarily due to RevPAR growth of 3.9% as well as growth in membership fees,which in turn resulted from the increased number of hotels and hotel rooms in operation.

Quarter Ended

December 31,

2017

December 31,

2018

December 31,

2018

RMB

RMB

USD

Initial franchise fee

18,735,211

19,117,629

2,780,544

Recurring franchise management fee and

others

134,472,486

173,930,842

25,297,192

Revenues from franchised-and-

managed hotels

153,697

193,471

28,736

Year Ended

December 31,

2018

RMB

RMB

USD

Initial franchise fee

56,176,467

66,407,440

9,658,562

Recurring franchise management fee and

others

528,412,891

665,426,469

96,782,266

Revenues from franchised-and-

managed hotels

584,358

731,909

106,828

Total operating costs and expenses

Quarter Ended

December 31,

2018

RMB

RMB

USD

Operating costs and expenses

Hotel operating costs

59,046,036

74,110,158

10,778,875

Selling and marketing expenses

15,695,841

16,169,263

2,351,722

General and administrative expenses

63,739,147

34,751,049

5,054,330

Other operating expenses

4,340,835

5,667,699

824,333

Total operating costs and expenses

142,821,859

130,698,169

19,009,260

Year Ended

December 31,

2018

RMB

RMB

USD

Operating costs and expenses

Hotel operating costs

233,646,052

280,954,345

40,863,115

Selling and marketing expenses

45,032,441

50,393,151

7,329,380

General and administrative

expenses

121,657,492

95,261,152

13,855,159

Other operating expenses

5,629,448

5,946,226

864,843

Total operating costs and

expenses

405,965,433

432,554,874

62,912,497

Hotel operating costsfor the fourth quarter of 2018 were RMB74.1 million (US$10.8 million)[1],representing a 25.5% increase from the same quarter of 2017. The increase in the fourth quarter of 2018 was mainly attributable to the increased number and the increased salary of general managers in our hotel network and other costs associated with the expansion of our F&M hotels,and higher rental costs,utility costs,consumables and personnel costs associated with the four new L&O hotels added to our portfolio since the third quarter of 2018; and was partially offset by reduced utility costs due to the renovation of six L&O hotels since the third quarter,and also offset by reduced depreciation and amortization and operating costs related to the conversion of one L&O hotel.

Hotel operating costs for the full year 2018 were RMB281.0 million (US$40.9 million)[1],representing an 20.2% year-over-year increase. The year-over-year increase for the full year 2018 was mainly attributable to the increased number of general managers in our hotel network and other costs associated with the expansion of our F&M hotels,utilities,consumables and personnel costs associated with the GreenTree Eastern L&O hotels and the four new L&O hotels added to our portfolio since the third quarter of 2018.

Quarter Ended

December 31,

2018

RMB

RMB

USD

Rental

14,438,379

20,804,644

3,025,910

Utilities

3,455,216

3,672,738

534,178

Personnel cost

7,195,580

8,323,820

1,210,649

Depreciation and amortization

5,558,781

7,697

1,021,845

Consumable,food and beverage

4,045,329

5,196,402

755,785

Costs of general managers of franchised-and-

operated hotels

13,111

20,682

2,913,633

Other costs of franchised-and-operated hotels

5,771

7,685

1,022,862

Others

4,763,869

2,490

294,013

Hotel Operating Costs

59,036

74,158

10,875

Year Ended

December 31,

2018

RMB

RMB

USD

Rental

60,252,952

76,055,484

11,061,811

Utilities

16,692,172

19,264,487

2,801,903

Personnel cost

27,546,240

33,715,007

4,903,644

Depreciation and amortization

22,978,585

21,313,405

3,099,906

Consumable,food and beverage

13,470,072

19,275,688

2,803,533

Costs of general managers of

franchised-and-operated hotels

54,291,625

70,480,306

10,250,935

Other costs of franchised-and-

operated hotels

23,497,850

28,888,506

4,201,659

Others

14,916,556

11,961,462

1,724

Hotel Operating Costs

233,052

280,345

40,115

Selling and marketing expensesfor the fourth quarter of 2018 were RMB16.2 million (US$2.4 million)[1],compared to RMB15.7 million in the fourth quarter of 2017. The increase of 3.0% from the fourth quarter of 2017 was mainly attributable to model room construction,increased personnel,compensation and other costs (i.e. travel expenses) of business development personnel,as a result of the increased opening of hotels.

Selling and marketing expenses for the full year 2018 were RMB50.4 million (US$7.3 million)[1],compared to RMB45.0 million for the full year 2017. The year-over-year increase of 11.9% for the full year 2018 was mainly attribute to model room construction,exhibition and other advertising and promotion expenses related to our three new mid-to-upscale brands,compensation and other costs (i.e. travel travelling) of business development personnel,as a result of the increased hotel openings and wider geographic coverage.

General and administrative expensesfor the fourth quarter of 2018 were RMB34.8 million (US$5.1 million)[1]. Excluding the one-time grant of GTI's shares to certain of our directors in the fourth quarter of 2017,G&A in the quarter increased by 35.3%,compared to the same quarter of 2017. The increase was primarily attributable to the increased salary and share-based compensation.

General and administrative expenses for the full year 2018 were RMB95.3 million (US$13.9 million)[1].Excluding the one-time grant of GTI's shares to certain of our directors in the fourth quarter of 2017,G&A for the full year 2018 increased by 13.9% year over year,

Gross profitfor the fourth quarter of 2018 was RMB175.8 million (US$25.6 million)[1],representing an increase of 19.0% from the same quarter of 2017. Gross margin in the fourth quarter was 70.3%,compared to 71.4% a year ago.Gross profit for the full year 2018 was RMB664.1 million (US$96.6 million)[1],representing a year-over-year increase of 22.0%.

Income from operationsfor the fourth quarter of 2018 was RMB123.1 million (US$17.9 million)[1],representing an increase of 89.0% from the same quarter of 2017. Operating margin in the fourth quarter increased to 49.3%,compared to 31.5% a year ago.Income from operations for the full year 2018 was RMB535.0 million (US$77.8 million)[1] representing a year-over-year increase of 38.1%.

Adjusted EBITDA (non-GAAP) for the fourth quarter of 2018 was RMB160.1 million (US$23.3 million)[1],an increase of 35.2% from the same quarter of 2017. The adjusted EBITDA margin,defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues,was 64.1% in the fourth quarter of 2018,compared to 57.3% in the fourth quarter of 2017. Adjusted EBITDA (non-GAAP)for the full year 2018 was RMB609.7 million (US$88.7 million)[1],a year-over-year increase of 30.5%.

Net income for the fourth quarter of 2018 was RMB53.8 million (US$7.8 million)[1].Excluding the one-time grant of GTI's shares to certain of our directors in the fourth quarter of 2017,net income in the quarter increased by 91.4%,compared to the same quarter of 2017; net margin in the quarter was 21.5%,compared to 13.6% a year ago. Net income for the full year 2018 was RMB393.6 million (US$57.2 million)[1]. Excluding the one-time grant of GTI's shares to certain of our directors in the fourth quarter of 2017,net income for the full year increased by 21.8% year over year.

Core net income (non-GAAP) for the fourth quarter of 2018 was RMB115.9 million (US$16.9 million)[1]representing a 33.4% increase from the same quarter of 2017.The core net margin,defined as core net income (non-GAAP) as a percentage of total revenues,was 46.4% in the fourth quarter of 2018,compared to 42.0% in the fourth quarter of 2017. Core net income (non-GAAP) for the full year 2018 was RMB445.3 million (US$64.8 million)[1],representing a 31.8% year-over-year increase.

Basic and diluted earnings per ADS for the fourth quarter of 2018 was RMB0.53 (US$0.08)[1],representing an RMB0.64 increase than one year ago. Basic and diluted earnings per ADS was RMB3.97 (US$0.58)[1] for the full year 2018,representing a 27.2% year-over-year increase. Basic and diluted core net income per ADS (non-GAAP)was RMB1.14 (US$0.17)[1] for the fourth quarter of 2018,representing a 20.0% increase from the same quarter of 2017. Basic and diluted core net income per ADS (non-GAAP) were RMB4.49 (US$0.65)[1] for the full year 2018,representing a 21.4% year-over-year increase.

Cash flow. Operating cash inflow for the fourth quarter of 2018 was RMB152.6 million (US$22.2 million)[1],due primarily to improved operating performance across our hotel portfolio. Operating cash inflow for the full year 2018 was RMB554.9 million (US$80.7 million)[1]. Investing cash inflow for the fourth quarter of 2018 was RMB153.5 million (US$22.3 million)[1],which was attributable primarily to changes in short-term investments,repayment of loan from third parties,and partially offset by purchase of property and equipment and other investments,mainly including short-term investments,long-term deposits,and loan to franchisees. Investing cash outflow for the full year 2018 was RMB181.8 million (US$26.4 million)[1]. Financing cash inflow for the fourth quarter of 2018 was RMB58.3 million (US$8.5 million)[1],which was attributable primarily to RMB60.0 million of proceeds from short-term borrowings.Net financing cash inflow for the full year 2018 was RMB662.8 million (US$96.4 million)[1],which was attributable primarily to proceeds from initial public offering and was partially offset by distribution to the shareholders and payment for initial public offering costs.

Cash and cash equivalents,restricted cash,Short-term investments and securities.As of December 31,the Company had a total balance of cash and cash equivalents,short term investments and investments in equity securities of RMB2,260.5 million (US$328.8 million)[1],as compared to RMB1,996.3 million as of September 30,primarily due to net operating cash inflow,offset by investing cash flow for property and equipment and other investments.

Guidance

For the full year 2019,the Company expects growth in total revenues of 20-25% from 2018.

The guidance set forth above reflects the Company's current and preliminary view based on our estimates,may not be indicative of our financial results for the full year ended December 31,2019 and is subject to change.

Recent Developments

On January 18,2019,the Company invested in China Gingko Education Group Company Limited,a public company listed on the Hong Kong Stock Exchange ("HKSE"). In the 2017/2018 school year,approximately 10,000 students are enrolled in the college. Gingko is currently ranked as China's number one hospitality university by the "Gaosan Web Association",a website with introductions to and rankings of universities in China. The two companies will work together to cultivate professional talent for us and the hospitality industry in China.

On January 28,the Company announced it would become a major shareholder of Argyle Hotel Management Group (Australia) Pty Ltd. The Argyle hotel network consists of eight mid-scale and upscale brands,with footprints mainly in South West China,South East China,and some hotels in Southeast Asia. Argyle's highly distinguished brand portfolio and geographic coverage are highly complementary to GreenTree's business.

On March 11th,the Company acquired 4.95% in Zhejiang New Century Hotel Management Co.,Ltd,which was listed on HKSE on March 11,2019. New Century operates and manages 150 hotels,ranging from mid-scale to upscale brands,with over 34,000 hotel rooms in 22 provinces. The two companies will explore opportunities for future strategic cooperation.

Dividend Policy

On January 22,the Company announced the payment of a cash dividend of US$0.30 per ordinary share,or US$0.30 per American Depositary Share ("ADS"). In addition,the company plans to pay a cash dividend of US$0.20 per share per year in the near future,if there is no immediate cash need for the Company's growth or M&A opportunities,to create long-term value and benefits for our shareholders.

Conference Call

GreenTree's management will hold an earnings conference call at 8:00 AM U.S. Eastern Time on March 14,2019 (8:00 PM Beijing/Hong Kong Time on March 14,2019).

Dial-in numbers for the live conference call are as follows:

International

1-412-902-4272

China

4001-201203

US

1-888-346-8982

Hong Kong

800-905945 or 852-3018-4992

Participants should ask to join the GreenTree call,please dial in approximately 10 minutes before the scheduled time of the call.

A telephone replay of the call will be available after the conclusion of the conference call until March 21,2019.

Dial-in numbers for the replay are as follows:

International Dial-in

1-412-317-0088

U.S. Toll Free

1-877-344-7529

Canada Toll Free

855-669-9658

Passcode:

10129197

Additionally,a live and archived webcast of this conference call will be available at http://ir.998.com.

Use of Non-GAAP Financial Measures

We believe that Adjusted EBITDA and core net income,as we present it,is a useful financial metric to assess our operating and financial performance before the impact of investing and financing transactions,income taxes and certain non-core and non-recurring items in our financial statements.

The presentation of Adjusted EBITDA and core net income should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.

The use of Adjusted EBITDA and core net income has certain limitations because it does not reflect all items of income and expenses that affect our operations. Items excluded from Adjusted EBITDA and core net income are significant components in understanding and assessing our operating and financial performance. Depreciation and amortization expense for various long-term assets,income tax and share-based compensation have been and will be incurred and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally,Adjusted EBITDA and core net income does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization,interest expense/income,gains/losses from trading securities,income tax expenses,share-based compensation,share of loss in equity investees,government subsidies and other relevant items both in our reconciliations to the corresponding U.S. GAAP financial measures and in our consolidated financial statements,all of which should be considered when evaluating our performance.

The term Adjusted EBITDA and core net income is not defined under U.S. GAAP,and Adjusted EBITDA and core net income is not a measure of net income,operating income,operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance,you should not consider this data in isolation or as a substitute for our net income,operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition,our Adjusted EBITDA and core net income may not be comparable to Adjusted EBITDA and core net income or similarly titled measures utilized by other companies since such other companies may not calculate Adjusted EBITDA and core net income in the same manner as we do.

Reconciliations of the Company's non-GAAP financial measures,including Adjusted EBITDA and core net income,to the consolidated statement of operations information are included at the end of this press release.

About GreenTree Hospitality Group Ltd.

GreenTree Hospitality Group Ltd. ("GreenTree" or the "Company") (NYSE: GHG) is a leading franchised hotel operator in China. As of December 31,GreenTree had 2,757 hotels,among which 2,728 are franchised and managed hotels. The Company had the highest proportion of franchised-and-managed hotels among the top four economy to mid-scale hotel networks in China. In 2017,GreenTree was the fourth largest economy to mid-scale hotel group in China in terms of number of hotels according to China Hospitality Association. The Company has built a strong suite of brands including its flagship "GreenTree Inns" brand as a result of its long-standing dedication to the hospitality industry in China and consistent quality of its services,signature hotel designs,broad geographic coverage and convenient locations. GreenTree has positioned its brands to appeal to value-and-quality-conscious business travelers and leisure travelers.

For more information on GreenTree,please visit http://ir.998.com

Safe Harbor Statements

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934,as amended,and the U.S. Private Securities Litigation Reform Act of 1995. In some cases,these forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," "confident," "future," or other similar expressions. GreenTree may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission,in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Any statements that are not historical facts,including statements about or based on GreenTree's current beliefs,expectations,assumptions,estimates and projections about us and our industry,are forward-looking statements that involve known and unknown factors,risks and uncertainties that may cause our actual results,performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such factors and risks include,but not limited to the following: GreenTree's goals and growth strategies; its future business development,financial condition and results of operations; trends in the hospitality industry in China and globally; competition in our industry; fluctuations in general economic and business conditions in China and other regions where we operate; the regulatory environment in which we and our franchisees operate; and assumptions underlying or related to any of the foregoing. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks,uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided,including the forward-looking statements made,in this press release are current as of the date of the press release. Except as required by law,GreenTree undertakes no obligation to update any such information or forward-looking statements to reflect events or circumstances after the date on which the information is provided or statements are made,or to reflect the occurrence of unanticipated events.

[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.8755 on December 31,2018 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20181231/

[2] "Tier 1 cities" refers to the term used by the National Bureau of Statistics of China and refer to Beijing,Shanghai,Shenzhen and Guangzhou.

[3] "Tier 2 cities" refers to the 32 major cities,other than Tier 1 cities,as categorized by the National Bureau of Statistics of China,including provincial capitals,administrative capitals of autonomous regions,direct-controlled municipalities and other major cities designated as "municipalities with independent planning" by the State Council.

[4] "Tier 1 cities" refers to the term used by the National Bureau of Statistics of China and refer to Beijing,Shenzhen and Guangzhou.

[5] "Tier 2 cities" refers to the 32 major cities,direct-controlled municipalities and other major cities designated as "municipalities with independent planning" by the State Council.

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Balance Sheets

December 31,2018

RMB

RMB

USD

ASSETS

Current assets:

Cash and cash equivalents

161,963,665

1,785

183,844,925

Short-term investment

781,850,000

685,512,063

99,703,594

Investments in equity securities

307,754,960

307,693,782

44,752,204

Accounts receivable,net of allowance for doubtful

accounts

53,894

64,864,184

9,434,104

Amounts due from related parties

3,248,692

228,600

33,248

Prepaid rent

4,292,472

4,478,413

651,358

Inventories

2,355,154

2,547,729

370,552

Other current assets

127,269,801

53,969,039

7,849,474

Loans receivable,net

6,600,000

67,568

9,773,335

Deferred tax assets

36,884

-

-

Total current assets

1,485,425,522

2,450,516,163

356,794

Non-current assets:

Amounts due from a related party

2,000

-

-

Restricted cash

3,000,000

3,300,000

479,965

Loan receivable,net

-

39,352,863

5,723,637

Property and equipment,net

96,669,251

222,389,573

32,345,222

Intangible assets,net

3,727,383

27,213,391

3,958,024

Goodwill

2,959,183

5,787,068

841,694

Long-term investments

122,508,832

112,219,460

16,321,644

Other assets

5,741,301

85,701,523

12,464,768

Deferred tax assets

33,457

67,909,969

9,877,095

TOTAL ASSETS

1,755,982,929

3,014,390,010

438,424,843

LIABILITIES AND EQUITY

Current liabilities:

Short-term bank loans

-

60,000

8,726,638

Accounts payable

7,293,341

9,182,058

1,335,475

Advance from customers

33,662,363

36,370,325

5,289,844

Amounts due to related parties

473,018

285,578

41,536

Salary and welfare payable

44,577,683

42,767,219

6,220,234

Deferred rent

2,205

4,421,427

643,070

Deferred revenue

109,101,986

153,895

22,309,635

Accrued expenses and other current liabilities

293,951

264,058,985

38,405,786

Income tax payable

103,830,578

104,988,638

15,964

Dividends payable

39,691,103

-

-

Deferred tax liabilities

27,745,951

-

-

Total current liabilities

663,034,179

675,125

98,242,182

Deferred rent

23,050,635

20,519,984,464

Deferred revenue

144,258,584

145,545,929

21,168,777

Other long-term liabilities

73,937,277

96,573,810

14,079

Deferred tax liabilities

5,260

43,538,624

6,332,430

Unrecognized tax benefits

113,299,633

169,619,409

24,670,120

Total liabilities

1,023,377,568

1,151,579

167,444,052

Shareholders' equity:

Class A ordinary shares

160,189,926

217,867

31,622,699

Class B ordinary shares

140,696,841

115,534,210

16,754

Additional paid-in capital

212,734

1,003,026,803

145,884,198

Retained earnings

223,134,889

456,398,812

66,380,454

Accumulated other comprehensive (loss) income

(4,086,149)

62,367,692

9,071,005

Total GreenTree Hospitality Group Ltd. shareholders'

equity

732,245,241

1,854,749,384

269,762,110

Non-controlling interests

360,120

8,379,047

1,218,681

Total shareholders' equity

732,605,361

1,128,431

270,980,791

TOTAL LIABILITIES AND SHAREHOLDERS'

EQUITY

1,843

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income

Quarter Ended

Year Ended

December 31,2018

December 31,2018

RMB

RMB

USD

RMB

RMB

USD

Revenues

Leased-and-operated hotels

53,231

193,585

Franchised-and-managed hotels

153,736

584,828

Total revenues

206,967

778,413

Operating costs and expenses

Hotel operating costs

(59,036)

(74,158)

(10,875)

(233,052)

(280,345)

(40,115)

Selling and marketing expenses

(15,841)

(16,263)

(2,722)

(45,441)

(50,151)

(7,380)

General and administrative expenses

(63,147)

(34,049)

(5,330)

(121,492)

(95,152)

(13,159)

Other operating expenses

(4,835)

(5,699)

(824,333)

(5,448)

(5,226)

(864,843)

Total operating costs and expenses

(142,859)

(130,169)

(19,260)

(405,433)

(432,874)

(62,497)

Other operating income

1,145,905

3,177

568,566

15,283,828

22,570,806

3,282,787

Income from operations

65,121,315

123,093,952

17,273

387,208

535,866

77,815,703

Interest income and other,015,508

18,544,966

2,697,253

26,238,440

49,659,928

7,222,737

Interest expense

(514,750)

(541,876)

(78,813)

(1,442,709)

(541,813)

Gains (losses) on investments in equity securities

10,653

(29,829,668)

(4,338,545)

59,165,221

(57,774,952)

(8,403,018)

Other income (expenses),net

1,637,252

(987,674)

(143,651)

1,191,211

35,374

5,197,495

Income before income taxes

82,448,978

110,279,700

16,039,517

472,602,371

562,100,340

81,104

Income tax expense

(92,624,726)

(49,068)

(7,141,309)

(186,651,155)

(160,185,845)

(23,298,065)

(Loss) income before share of loss in equity

investees

(10,175,748)

61,179,632

8,898,208

285,951,216

401,914,495

58,456,039

Share of losses (gains) in equity investees,net

of tax

251,103

(7,226)

(1,069,336)

(899,584)

(8,584)

(1,270)

Net (loss) income

(9,924,645)

53,827,406

7,828,872

285,051,632

393,613,911

57,769

Net loss attributable to non-controlling interests

300,646

106,099

15,431

348,550

490,930

71,403

Net (loss) income attributable to ordinary

shareholders

(9,623,999)

53,933,505

7,303

285,400,182

394,104,841

57,320,172

Net earnings per share

Class A ordinary share-basic and diluted

(0.11)

0.53

0.08

3.12

3.97

0.58

Class B ordinary share-basic and diluted

(0.11)

0.53

0.08

3.12

3.97

0.58

Net earnings per ADS

Class A ordinary share-basic and diluted

(0.11)

0.53

0.08

3.12

3.97

0.58

Class B ordinary share-basic and diluted

(0.11)

0.53

0.08

3.12

3.97

0.58

Weighted average shares outstanding

Class A ordinary share-basic and diluted

48,635,252

66,789,300

66,300

48,252

62,860,578

62,578

Class B ordinary share-basic and diluted

42,716,957

34,909

34,909

42,957

36,288,343

36,343

Other comprehensive income,net of tax

-Foreign currency translation adjustments

3,809,703

68,095,749

9,904,116

1,317,020

66,453,841

9,665,310

Comprehensive income,net of tax

(6,114,942)

121,923,155

17,732,988

286,368,652

460,067,752

66,079

Comprehensive loss attributable to non-

controlling interests

300,403

Comprehensive income attributable to

ordinary shareholders

(5,814,296)

122,029,254

17,748,419

286,717,202

460,682

66,985,482

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

Quarter Ended

Year Ended

December 31,2017

December 31,2018

December 31,2018

December 31,2018

RMB

RMB

USD

RMB

RMB

USD

Operation activities:

Net (loss) income

(9,645)

53,406

7,872

285,632

393,911

57,769

Adjustments to reconcile net income

to net cash provided by operating

activities:

Depreciation and amortization

6,016,340

8,144,953

1,184,634

24,956,433

25,549,965

3,088

Share of (gain) loss in equity method

investments

(251,103)

7,226

1,337

899,584

8,584

1,270

Gains from disposal of a long-term

investments

(1,649,041)

-

-

(1,041)

(36,048)

(5,341,146)

Interest income

(5,548,429)

(518,655)

(75,435)

(14,429)

(20,447,590)

(2,973,979)

Interest expenses

514,750

-

-

1,709

-

-

Bad debt expense

(1,561)

656,201

95,440

483,610

1,374

287,743

(Gains) losses on investments in equity

securities

(10,653)

29,668

4,545

(59,221)

57,952

8,018

(Gains) losses on disposal of property

and equipment

3,825

(267,849)

(38,957)

3,899,331

(267,957)

Foreign exchange loss (gain)

3,123

4,147

669,791

2,784,857

(913,782)

(132,904)

Share-based compensation

38,540,392

1,148

38,000

16,108,950

2,342,949

Income tax expenses related to dividend

distribution outside PRC

67,675,809

23,894

3,395,519

67,519

Impairment of long-lived assets

-

5,008,677

728,482

-

5,483

Changes in operating assets and

liabilities:

Restricted cash

-

-

-

7,200,000

-

-

Accounts receivable

1,722,327

61,532

8,949

(17,931,396)

(12,310)

(1,798,896)

Prepaid rent

(1,167,090)

(336,797)

(48,985)

8,750

(185,941)

(27,044)

Inventories

(408,760)

(605,810)

(88,111)

(510,999)

621,293

90,363

Amounts due from related parties

6,457,182

23,399

3,403

13,816,640

1,694,216

246,413

Other current assets

(2,105,589)

13,126,250

1,135

(5,892,325)

(13,400)

(2,528)

Other assets

-

(1,964,823)

(285,772)

1,728,263

(1,772)

Accounts payable

(3,636,650)

913,846

132,913

(407,953)

1,183,032

172,065

Amounts due to related parties

(2,506,684)

(816,797)

(118,798)

290,093

(187,440)

(27,262)

Salary and welfare payable

5,277,943

2,062

411,179

7,507,074

(2,203,639)

(320,506)

Deferred revenue

14,205,528

(7,186,485)

(1,231)

52,162

45,575,254

6,628,646

Advance from customers

(22,166,166)

67,464

9,812

(2,116,543)

2,707,962

393,857

Accrued expenses and other current

liabilities

13,237,799

(1,712,846)

(249,123)

44,287,986

(4,468,873)

(649,971)

Income tax payable

22,572,754

9,223,838

1,552

20,753,618

4,328,055

629,489

Unrecognized tax benefits

7,808,244

11,905,554

1,731,591

9,610,768

56,319,776

8,372

Deferred rent

3,564

(5,659)

(852,397)

(15,846,523)

(1,731)

(149,186)

Other long-term liabilities

7,409,727

4,777,553

694,866

10,479

22,533

3,347

Deferred taxes

(11,369,114)

(12,322,771)

(1,792,273)

(6,448)

(17,107,359)

(2,488,162)

Net cash provided by operating

activities

129,290,430

152,643,570

22,086

476,920

554,949,643

80,714,078

Investing activities:

Purchases of property and equipment

(3,564,666)

(23,915,352)

(3,346)

(16,552,148)

(138,471,216)

(20,139,803)

Purchases of intangible assets

-

(246,468)

(35,847)

(15,386)

(3,491,958)

(507,884)

Proceeds from disposal of property and

equipment

778,696

126,301

18,370

2,678,370

Acquisitions,net of cash received

-

-

-

-

(13,302,894)

(1,934,826)

Proceeds from disposal of a long-term

investments

-

-

-

-

89,803

12,971,101

Advances for acquisitions of equity

investees

-

(12,700)

(1,028)

-

(18,700)

(2,692)

Purchases of short-term investments

(781,000)

(25,964)

(3,650,784)

(781,000)

(772,145)

(112,361,304)

Proceeds from short-term investments

-

241,939

35,091,403

-

889,325,672

129,347,054

Increase in long-term investments

-

-

-

(100,474)

-

-

Purchases of investments in equity

securities

-

(83,433)

(12,133,144)

(39,972,398)

(88,150)

(12,836,616)

Proceeds from disposal of investments

in equity securities

26,122,308

5,656,574

822,715

64,874,851

30,376

4,495

Increase of long-term time deposits

-

(60,000)

(8,638)

-

(60,638)

Repayment from a related party

8,671,250

-

-

8,250

-

-

Loan to related parties

(2,500,000)

-

-

(3,000)

(4,000)

(625,409)

Repayment of loan from a related party

128,474

-

-

128,474

-

-

Loan to third parties

-

-

-

-

(166,819,164)

(24,262,841)

Repayment of loan from third parties

-

118,000

17,217,657

-

118,657

Loan to franchisees

-

(8,000)

(1,178,096)

(6,000)

(54,060,267)

(7,862,740)

Repayment from a franchisee

-

930,000

135,263

-

10,000

1,461,712

Net cash (used in) provided by

investing activities

(624,231,938)

153,897

22,525

(744,856,135)

(181,756,342)

(26,435,364)

Financing activities:

Distribution to the shareholders

(569,391,541)

-

-

(579,042,699)

(200,532,021)

(29,173)

Income tax paid related to the above

distribution

(64,809)

-

-

(64,809)

(3,000)

(436,332)

Proceeds from short-term borrowings

-

60,638

60,000

60,638

Repayment of short-term borrowings

(61,709)

-

-

(61,709)

-

-

Changes in restricted cash

1,001,000

(300,000)

(43,633)

180,633)

Proceeds from initial public offering

-

-

-

-

837,505,007

121,810,051

Payment for initial public offering costs

-

(1,437,170)

(209,028)

-

(30,578)

(4,483,685)

Net cash provided by (used in)

financing activities

306,339,941

58,830

8,473,977

(465,161,217)

662,845,408

96,406,866

Effect of exchange rate changes on cash

and cash equivalents

142,577

60,504,482

8,800,013

(1,467,838)

66,411

9,707

Net (decrease) increase in cash and

cash equivalents

(188,458,990)

424,868,779

61,794,601

(734,270)

1,102,062,120

160,287

Cash and cash equivalents at the

beginning of the period

350,422,655

839,157,006

122,324

896,935

161,665

23,556,638

Cash and cash equivalents at the end

of the period

161,665

1,785

183,925

161,925

GreenTree Hospitality Group Ltd.

Unaudited Reconciliation of GAAP and Non-GAAP Results

Quarter Ended

Year Ended

December 31,2018

RMB

RMB

USD

RMB

RMB

USD

Net (loss) income

(9,769

Deduct:

Other operating income

1,787

Gains on investments in equity

securities

10,653

-

-

59,221

-

-

Share of gain in equity

investees,net of tax

251,103

-

-

-

-

-

Other income,252

-

-

1,495

Add:

Other operating expenses

4,333

5,843

Income tax expense

92,726

49,068

7,309

186,155

160,845

23,065

Share of loss in equity

investees,net of tax

-

7,336

899,270

Interest expense

514,750

541,876

78,813

1,709

541,813

Share-based compensation

38,949

Depreciation and amortization

6,088

Losses on investments in equity

securities

-

29,545

-

57,018

Other expense,net

-

987,674

143,651

-

-

-

Adjusted EBITDA (Non-GAAP)

118,396,093

160,082,785

23,075

467,038,701

609,129

88,679,533

Quarter Ended

Year Ended

December 31,2018

RMB

RMB

USD

RMB

RMB

USD

Net (loss) income

(9,769

Deduct:

Government subsidies (net of 25% tax)

-

-

-

7,746

11,362,580

1,652,619

Gains on investments in equity

securities (net of 25% tax)

7,642,240

-

-

44,373,916

-

-

Other income (net of 25% tax)

1,227,939

-

-

893,408

26,531

3,121

Add:

Share-based compensation

38,949

Losses on investments in equity

securities(net of 25% tax)

-

22,372,251

3,253,909

-

43,331,214

6,264

Other expense (net of 25% tax)

-

740,756

107,738

-

-

-

Income tax expenses related to dividend

distribution outside PRC

67,519

Losses from joint venture closure

-

7,098,197

1,391

-

7,391

Core net income (Non-GAAP)

86,928,985

115,896

16,577

337,842,371

445,334,055

64,771,152

Core net income per ADS (Non-GAAP)

Class A ordinary share-basic and diluted

0.95

1.14

0.17

3.70

4.49

0.65

Class B ordinary share-basic and diluted

0.95

1.14

0.17

3.70

4.49

0.65

Operational Data

As of December 31,2017

As of December 31,2018

Total hotels in operation:

2,289

2,757

Leased and owned hotels

26

29

Franchised hotels

2,728

Total hotel rooms in operation

190,807

221,529

Leased and owned hotels

3,302

3,734

Franchised hotels

187,505

217,795

Number of cities

263

290

Quarter Ended

As of December 31,2018

Occupancy rate (as a percentage)

Leased-and-owned hotels

70.2%

64.5%

Franchised hotels

81.6%

80.7%

Blended

81.4%

80.4%

Average daily rate (in RMB)

Leased-and-owned hotels

193

212

Franchised hotels

158

163

Blended

158

164

RevPAR (in RMB)

Leased-and-owned hotels

135

137

Franchised hotels

129

132

Blended

129

132

Year Ended

As of December 31,2018

Occupancy rate (as a percentage)

Leased-and-owned hotels

70.3%

68.0%

Franchised hotels

82.9%

82.3%

Blended

82.6%

82.1%

Average daily rate (in RMB)

Leased-and-owned hotels

186

205

Franchised hotels

156

163

Blended

157

164

RevPAR (in RMB)

Leased-and-owned hotels

131

139

Franchised hotels

129

134

Blended

130

135

Number of Hotels in Operation

Number of Hotel Rooms in Operation

As of December 31,2018

As of December 31,2018

Economy hotels

257

465

14,060

23,656

Vatica

104

117

7,704

8,674

Shell

153

348

6,356

14,982

Mid-scale

1,982

2,184

171,041

186,513

GreenTree Inn

1,733

1,881

151,154

162,844

GT Alliance

249

302

19,887

23,607

Wumian Hotel

-

1

-

62

Business to Mid-to-up-scale

50

108

5,706

11,360

GreenTree Eastern

50

87

5,706

9,487

GMe

-

9

-

841

Geya

-

1

-

63

VX

-

11

-

969

Total

2,757

190,529

For more information,please contact:

GreenTree

Ms. Selina Yang

Phone: +86-21-3617-4886 ext. 7999

E-mail: ir@998.com

Mr. Nicky Zheng

Phone: +86-21-3617-4886 ext. 6708

E-mail:ir@998.com

Christensen

In Shanghai

Ms. Constance Zhang

Phone: +86-138-1645-1798

E-mail:czhang@christensenIR.com

InHong Kong

Ms.Karen Hui

Phone: +852-9266-4140

E-mail:khui@christensenIR.com

In US

Ms.Linda Bergkamp

Phone: +1-480-614-3004

Email:lbergkamp@ChristensenIR.com

View original content:/news-releases/greentree-hospitality-group-ltd-reports-fourth-quarter-and-fiscal-year-2018-financial-results-300812371.html