GreenTree Hospitality Group Ltd. Reports Fourth Quarter and Fiscal Year 2019 Financial Results

A total of 3,957 hotels with 290,026 hotel rooms were in operation as of December 31,2019,compared to 3,102 hotels and 245,705 hotel rooms as of September 30,and compared to 2,757 hotels and 221,529 hotel rooms as of December 31,2018.

Total revenues increased 20.4% to RMB289.4 million (US$41.6 million)[1] for the fourth quarter of 2019. Total revenues increased 20.6% to RMB1,091.8 million (US$156.8 million)[2]for the full year 2019.

Adjusted EBITDA (non-GAAP) increased 11.4% to RMB162.3million (US$23.3 million) [1] for the fourth quarter of 2019. Adjusted EBITDA (non-GAAP) increased 12.1% to RMB594.1 million (US$85.3 million)[1] for the full year 2019.

Net income increased 48.9% to RMB74.5 million (US$10.7 million)[1] for the fourth quarter of 2019. Net income increased 17.9% to RMB437.8 million (US$62.9 million)[1] for the full year 2019.

Core net income (non-GAAP) increased 15.8% to RMB129.9 million (US$18.7 million)[1] for the fourth quarter of 2019. Core net income (non-GAAP) increased 16.7% to RMB482.7 million (US$69.3 million)[1] for the full year 2019.

Net income per ADS (basic and diluted) totaled RMB0.75 (US$0.11)[1] for the fourth quarter of 2019. Net income per ADS (basic and diluted) totaled RMB4.34 (US$0.62)[1] for the full year 2019.

Core net income per ADS (basic and diluted) (non-GAAP) of the Company totaled RMB1.27 (US$0.18)[1] for the fourth quarter of 2019. Core net income per ADS (basic and diluted) (non-GAAP) totaled RMB4.73 (US$0.68)[1] for the full year 2019.

The Company expects total revenue for the full year 2020 to decline 10%-15% from 2019,with consideration of COVID-19.

SHANGHAI,April 14,2020 -- GreenTree Hospitality Group Ltd. (NYSE: GHG) ("GreenTree",the "Company","we","us" and "our"),a leading hospitality management groupin China,today announced its unaudited financial results for the fourth quarter and fiscal year of 2019.

FourthQuarter of 2019Operational Highlights

As of December 31,the Company had 34 leased-and-operated ("L&O") hotels and 3,923 franchised-and-managed ("F&M") hotels in operation in 339 cities across China,compared to 29 L&O hotels and 2,728 F&M hotels in operation in 290 cities as of December 31,2018. The geographic coverage increased by 16.9% year over year.

During the fourth quarter of 2019,the Company opened 190 hotels,a decrease of 34 comparing to 224 hotels in the fourth quarter of 2018. Among the hotels opened,29 were in the mid-to-up-scale segment,81 in the mid-scale segment,and 80 in the economy segment. Geographically speaking,14 hotels were in Tier 1 cities[2],37 were in Tier 2 cities and the remaining 139 were in Tier 3 and other cities in China. During this quarter,the Company closed 41 hotels,9 due to brand upgrade,and 20 due to their non-compliance with the Company's brand and operating standards. The remaining 12 were closed for property related issues. The Company added a net opening of 149 hotels toits portfolio.

As of December 31,the Company had a pipeline with a total 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.

The average daily room rate,or ADR,for all hotels in operation,was RMB170 in the fourth quarter of 2019,an increase of 3.6% year-over-year.

The occupancy rate,or OCC for all hotels in operation was 78.2% in the fourth quarter of 2019,compared with 80.4% in the fourth quarter of 2018.

The revenue per available room,or RevPAR,which is calculated by multiplying our hotels' ADR by its occupancy rate,was RMB133 in the fourth quarter of 2019,representing a 0.9% year-over-year increase.

As of December 31,the Company's loyalty program had more than 44 million individual members and over 1,510,000 corporate members,compared to approximately 39 million and over 1,450,000 corporate members as of September 30,2019. The Company had approximately 93.0% of room nights sold directly.

2019 Full Year Operational Highlights

For the full year 2019,the Company opened 607 hotels,an increase of 9.6% comparing to 554 newly opened hotels in the full year 2018. Among the hotels opened,4 were in the luxury hotel segment,84 in the mid-to-up-scale segment,287 in the mid-scale segment,and 232 in the economy segment. Geographically speaking,43 hotels were in Tier 1 cities,129 were in Tier 2 cities and the remaining 435 werein Tier 3 and other cities in China. During this year,the Company closed 140 hotels,34 due to brand upgrade,and 75 due to their non-compliance with the Company's brand and operating standards. The remaining 31 were closed for property related issues. The Company added a net opening of 467 hotels toits portfolio.

The average daily room rate,was RMB170 in the full year 2019,or OCC for all hotels in operation was 80.9% in the full year 2019,compared with 82.1% in the full year 2018.

The revenue per available room,was RMB137 in the full year 2019,representing a 2.0% year-over-year increase.

The Company had approximately 93.5% of room nights sold directly in the full year 2019

The Company has completed the consolidation of Argyle Hotel Management Group (Australia) Pty Ltd ("Argyle") in the second quarter of 2019 and of Urban Hotel Group ("Urban") in the fourth quarter of 2019.

With the introduction of branded restaurant to hotels,the Company's Food and Beverage services can bring additional revenue and attract more guests to hotels.

The Company have been working with several major banks in joint marketingactivities to cross promote each other's membership programs.

"Last year we completed a number of strategic investments which resulted in a number of joint venture investments for our Company," said Mr. Alex Xu,Chairman and Chief Executive Officer of GreenTree. "In Q4,we completed the merger of Urban Hotels in December,and restructured our development team. By year end,our pipeline growth had increased by 120% over 2018. During the first quarter of 2020,we have taken further initiatives to improve our technology for our users,to improve the health and safety of our hotels for our guests and employees,to refine our sales and marketing focus,and to provide flexible franchise terms and support. With these combined efforts,our hotels should be able to continue to outperform in 2020.

"No words can express our gratitude and appreciation for the sacrifices and hard work made by our employees and our franchisees during the COVID-19 crisis. We owe our deepest thanks to our employees,guests,medical professionals,police,firefighters,and community leaders for their heroic support during the crisis.Thanks to all of them,our operations are recovering rapidly.

"Our mission has always been to support our franchisees and employees,and to create value for our shareholders.With almost 4,000 hotels in operation and almost 1,000 under construction,our foundation is stronger,our pipeline is bigger,our teams are more focused,and we are better positioned to grow,in spite of the current crisis. We are confident that we will deliver another year of outstanding services to our guests and strong performance to our franchisees and shareholders."

Fourth Quarter of 2019 Financial Results

December 31,2018

December 31,2019

December 31,2019

RMB

RMB

US$

Revenues

Leased-and-operated hotels

56,721,973

68,553,356

9,847,074

Franchised-and-managed hotels

183,656,189

220,879,070

31,727,293

Total revenues

240,378,162

289,432,426

41,574,367

Year Ended

December 31,2019

RMB

RMB

US$

Revenues

Leased-and-operated hotels

212,671,930

253,420,676

36,401,602

Franchised-and-managed hotels

692,942,739

838,372,459

120,424,669

Total revenues

905,614,669

1,091,793,135

156,826,271

Total revenues for the fourth quarter of 2019 were RMB289.4 million (US$41.6 million)[1],representing a 20.4% year-over-year increase. The increase was primarily due to four factors: the opening of 190 F&M hotels,improved RevPAR,growth in our loyalty membership program,and the consolidation of Urban and Argyle into our financial statements. Growth was partially offset by the renovation of 6 L&O hotels. Total revenues for the full year 2019 were RMB1,091.8 million (US$156.8 million)[1],representing a 20.6% increase.

Total revenues from leased-and-operated hotels for the fourth quarter of 2019 were RMB68.6 million (US$9.8 million)[1],representing a 20.9% year-over-year increase. The increase was primarily attributable tothe 5 L&O hotels net addition to our network from consolidation of Urban,moderate,sublease,revenue growth,and was partially offset by the renovation of 6 L&O hotels during the quarter. Total revenues from L&O hotels for the full year 2019 were RMB253.4 million (US$36.4 million)[1],representing a 19.2% % increase.

Total revenues from franchised-and-managed hotels for the fourth quarter of 2019 were RMB220.9 million (US$31.7 million)[1],representing a 20.3% year-over-year increase. Initial franchise fees increased by 2.9% year-over-year in the fourth quarter of 2019. The 21.6% increase from the fourth quarter of 2018 in recurring franchisee management fees and others was primarily due to the new openings,RevPAR growth of 0.9% as well as growth in central reservation system ("CRS") usage fees,annual IT and hotel manager fees,which in turn resulted from the increased number of hotels and hotel rooms in operation. Total revenues from F&M hotels for the full year 2019 were RMB838.4 million (US$120.4 million)[1],representing a 21.0% increase.

Quarter Ended

December 31,2019

RMB

RMB

US$

Initial franchise fee

13,276,035

13,655,873

1,961,543

Recurring franchise

management fee and others

170,380,154

207,223,197

29,765,750

Revenues from franchised-

and-managed hotels

183,189

220,070

31,293

Year Ended

December 31,2019

RMB

RMB

US$

Initial franchise fee

42,806,330

54,930,266

7,890,239

Recurring franchise

management fee and others

650,136,409

783,442,193

112,534,430

Revenues from franchised-

and-managed hotels

692,739

838,459

120,669

Total operating costs and expenses

Quarter Ended

December 31,2019

RMB

RMB

US$

Operating costs and expenses

Hotel operating costs

71,959,069

92,609,618

13,302,539

Selling and marketing expenses

13,873,291

23,155,218

3,326,039

General and administrative expenses

25,479,401

79,597,392

11,433,450

Other operating expenses

5,667,699

3,124,942

448,870

Total operating costs and expenses

116,979,460

198,487,170

28,898

Year Ended

December 31,2019

RMB

RMB

US$

Operating costs and expenses

Hotel operating costs

274,419,263

338,479

48,669,378

Selling and marketing expenses

47,397,767

84,970,401

12,205,234

General and administrative expenses

95,261,152

184,989,324

26,572,054

Other operating expenses

5,946,226

3,286,652

472,098

Total operating costs and expenses

423,024,408

612,072,856

87,918,764

Hotel operating costsfor the fourth quarter of 2019 were RMB92.6 million (US$13.3 million)[1],representing a 28.7% increase from the fourth quarter of 2018. The increase was mainly attributable to the increased number and increased salary of general managers,other staff costs associated with the expansion of our net work,higher depreciation and amortization,one-time renovation costs related to the renovation of 6 L&O,as well as the operation costs of Argyle and Urban. Excluding the impact from newly consolidated entities,hotel operating costs of this quarter,increased 13.2%. For the full year 2019,hotel operating costs were RMB338.8 million (US$48.7 million)[1],representing a 23.5% increase.

Quarter Ended

December 31,

December 31,

2018

2019

2019

RMB

RMB

US$

Rental

20,804,644

22,270,198,917

Utilities

3,672,738

3,842,009

551,870

Personnel cost

8,323,820

10,069,427

1,446,383

Depreciation and amortization

7,025,697

15,030

2,212,220

Consumable,food and beverage

5,196,402

6,477

881,450

Costs of general managers of

franchised-and-operated hotels

20,032,682

23,458,837

3,369,651

Other costs of franchised-and-

operated hotels

6,532,685

7,799,192

1,120,284

Others

370,401

3,632,428

521,763.64

Hotel Operating Costs

71,069

92,618

13,539

Year Ended

December 31,

2018

2019

2019

RMB

RMB

US$

Rental

76,055,484

79,408

11,452

Utilities

19,264,487

19,119,300

2,746,316

Personnel cost

33,715,007

38,277,298

5,498,190

Depreciation and amortization

21,313,405

34,153

4,988,243

Consumable,food and beverage

19,275,688

27,666,436

3,974,035

Costs of general managers of

franchised-and-operated hotels

70,480,306

96,565,044

13,870,701

Other costs of franchised-and-

operated hotels

24,004,513

29,192,923

4,193,301

Others

10,310,373

13,680,917

1,965,142

Hotel Operating Costs

274,263

338,479

48,378

Selling and marketing expenses for the fourth quarter of 2019 were RMB23.2 million (US$3.3 million)[1],representing a 66.9% year-over-year increase. The increase was mainly made up of incentive bonuses,and marketing and other costs associated with brands promotion and with Argyle and Urban.Excluding Argyle's and Urban's expenses and extraordinary costs,selling and marketing expenses in this quarter increased 12.2%. For the full year 2019,selling and marketing expenses were RMB85.0 million (US$12.2 million) [1],representing a 79.3% increase.

General and administrative expenses for the fourth quarter of 2019 were RMB79.6 million (US$11.4 million) [1],representing a 212.4% year-over-year increase.The increase was primarily attributable to increased IT Research and development cost,legal,DD,M&A and other consulting fee,as well as the G&A expense of Argyle and Urban. Additionally,bad debt provision of investment in Yuzhenglong was accrued in the fourth quarter. Considering that Yuzhenglong focus on providing fast-food to travelers in the railway-stations and its business was seriously impacted by the traffic restriction in the COVID-19. Also due to the outbreak of COVID-19 and a bad debt provision of rental income from sublease was accrued. Excluding the bad debt provision,G&A from Argyle and Urban,and one-time fees,G&A expenses increased by 21.1%. General and administrative expenses for the full year 2019 were RMB185.0 million (US$26.6 million) [1],representing a 94.2% year-over-year increase.

Gross profitfor the fourth quarter of 2019 was RMB196.8 million (US$28.3 million)[1],representing an increase of 16.9% from the fourth quarter of 2018. Gross margin in this quarter was 68.0%,compared to 70.1% a year ago. Gross profit for the full year 2019 was RMB753.0 million (US$108.2 million)[1],representing a 19.3% year-over-year increase.

Income from operationsfor the fourth quarter of 2019 totaled RMB98.8 million (US$14.2 million)[1],representing a year-over-year decrease of 16.3%.The decrease was mainly due to increased costs and expenses of newly consolidated entities,bad debt provisions accrued in the fourth quarter as well as extraordinary fees. The operating margin,defined as income from operations as percentage of total revenues,for thefourth quarter of2019 was 34.1%,compared to 49.1% a year ago. Income from operations for the full year 2019 totaled RMB504.6 million (US$72.5 million)[1],representing a year-over-year decrease of 0.1%.

Adjusted EBITDA (non-GAAP) for the fourth quarter of 2019 was RMB162.3million (US$23.3 million)[1],representing a year-over-year increase of 11.4%. The adjusted EBITDA margin,defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues,was 56.1% in the fourth quarter of 2019,compared to 60.6% in the fourth quarter of 2018. Adjusted EBITDA (non-GAAP) for the full year 2019 was RMB594.1 million (US$85.3 million)[1],representing a year-over-year increase of 12.1%.

Net income for the fourth quarter of 2019 was RMB74.5 million (US$10.7 million) [1],representing a year-over-year increase of 48.9%. Net margin in the fourth quarter was 25.8%,compared to 20.8% a year ago. The year-over-year increase in revenues and gains from investments in equity securities and partially offset by interest in total costs and expenses. Net income for the full year 2019 was RMB437.8 million (US$62.9 million) [1],representing a year-over-year increase of 17.9%.

Core net income (non-GAAP)for the fourth quarter of 2019 was RMB129.9 million (US$18.7 million)[1],representing a year-over-year increase of 15.8%. The core net margin,defined as core net income (non-GAAP) as a percentage of total revenues,was 44.9% in the fourth quarter of 2019,compared to 46.7% one year ago. Core net income (non-GAAP) for the full year 2019 was RMB482.7 million (US$69.3 million)[1],representing a year-over-year increase of 16.7%.

Earnings per ADS (basic and diluted) for the fourth quarter of 2019 was RMB0.75 (US$0.11) [1].,up from RMB0.49 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB1.27 (US$0.18) [1] for the fourth quarter of 2019 improved from 1.10 in the fourth quarter of 2018. Earnings per ADS (basic and diluted) for the full year 2019 was RMB4.34 (US$0.62) [1] up from 3.75 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB4.73 (US$0.68) [1] for the full year 2019,increased from 4.17 of 2018.

Cash flow. Operating cash inflow for the fourth quarter of 2019 was RMB118.5 million (US$17.0 million)[1],primarily due to improved operating performance across our hotel portfolio. Operating cash inflow for the full year 2019 was RMB513.9 million (US$73.8 million)[1]. Investing cash outflow for the fourth quarter of 2019 was RMB203.5 million (US$29.2 million)[1],which was primarily attributable to short-term investments,investment of property,loans to franchisees and partially offset by proceeds from disposal of investments in equity securities. Investing cash outflow for the full year 2019 was RMB1,220.0 million (US$175.2 million)[1]. Financing cash outflow for the fourth quarter of 2019 was RMB17.0 million (US$2.4 million)[1],financing cash outflow for the full year 2019 was RMB212.2 million (US$30.5 million)[1].

Cash and cash equivalents,restricted cash,short-term investments,investments in equity securities[3] and time deposit[4].As of December 31,the Company had a total balance of cash and cash equivalents,short term investments,investments in equity securities and time deposit of RMB1,809.3 million (US$259.9 million)[1],as compared to RMB2,060.5 million as of September 30,primarily due to cash outflowof distribution to shareholders,loans to franchisees and cash outflow for acquisitions.

COVID-19 Updates

Thanks to the Chinese government's efforts to contain the spread of COVID-19,the outbreak is coming under control in China. But the measures that had to be taken,including the lock-down of cities,business closures,and restrictions on travel,disrupted the operations of the Company's hotels. Some were forced to close,and a number of hotels were required to house medical staff,volunteers,and quarantined travelers.

During this crisis,GreenTree's priority has been to keep every guest and staff safe and healthy. The Company took a number of substantial operational and financial measures including rigorous health,safety and hygiene protocols and practices,franchise fee waivers and financial support for its franchisees,self-quarantine rooms for employees and guests,and free COVID-19 health insurance for its members. The Company has actively participated in providing support for medical workers and police officers.

Thanks to the various policies and financial assistance from central and local governments and the abovementioned support measures from GreenTree,most franchisees were ready to resume business operations when shelter-in-place was lifted. As a result,asof March 31,2020,93.01% of the Company's hotels were back in operation,and achieved an overall occupancy of 51.6%,up substantially from the low of 21.5% on January 31,2020.

Guidance

Due to the impact of COVID-19,the Company expects a decline in total revenues in the first quarter of 2020 of 30%-35% year-over-year (37-39% excluding the impact of newly consolidated companies),and a decline in total revenues of 10%-15% for the full year 2020,compared to 2019.

The guidance set forth above reflects the Company's current and preliminary view based on our recovery speed and may not be indicative of the final financial results for future interim periods and the full year.

Conference Call

GreenTree's management will hold an earnings conference call at 8:00 AM U.S. Eastern Time on April 14,2020 (8:00 PM Beijing/Hong Kong Time on April 14,2020).

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

International

1-412-902-4272

Mainland China

4001-201-203

US

1-888-346-8982

Hong Kong

800-905-945 or 852-3018-4992

Singapore

800-120-6157

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 April 21,2020.

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:

10138725

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 investments in equity 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 hospitality management group in China. As of December 31,GreenTree had a total number of 3,957 hotels. In 2018,GreenTree ranked among the Top 12 worldwide in terms of number of hotels in "World's Largest Hotel Companies: HOTELS' 325",published by HOTELS magazine,and was as well the fourth largest hospitality company in China in 2018 based on the statistics issued by the China Hospitality Association.

GreenTree 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 further expanded its brand portfolio into mid-to-up-scale and luxury segments through a series of strategic investments. By offering diverse brands,through its strong membership base,expansive booking network,superior system management with moderate charges,and fully supported by its operating departments including Decoration,Engineering,Purchasing,Operation,IT and Finance,GreenTree aims to keep closer relationships with all of its clients and partners by providing a brand portfolio that features comfort,style and value.

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.

Notes:

[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.9618 on December 31,2019 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20200106

[2] Tier 1 Cities refers to Beijing,Shanghai,Shenzhen and Guangzhou; Tier 2 Cities refers to the 32 major cities,other than Tier 1 Cities,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.

[3] Investments in equity securities include securities and investment in Gingko and New Century which is recorded in Long-term investments account.

[4] Time deposits are the time deposit certificates last over three months.

- Financial Tables and Operational Data Follow -

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Balance Sheets

December 31,

2018

2019

2019

RMB

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

1,785

319,701

45,943,248

Short-term investment

685,512,063

437,279,026

62,811,202

Investments in equity securities

307,693,782

207,007,926

29,734,828

Accounts receivable,net of allowancefor doubtful accounts

64,864,184

99,701,226

14,321,185

Amounts due from related parties

228,600

31,739,731

4,559,127

Prepaid rent

4,478,413

18,794,665

2,699,685

Inventories

2,547,729

2,537,717

364,520

Other current assets

53,969,039

66,017

9,884

Loans receivable,net

67,568

82,312,201

11,823,407

Total current assets

2,516,163

1,265,224,210

181,738,086

Non-current assets:

Restricted cash

3,300,000

22,522

3,204,993

Long-term time deposits

60,000,000

560,000

80,438,967

Loan receivable,net

39,352,863

121,563,742

17,461,539

Property and equipment,net

222,389,573

614,936,505

88,330,102

Intangible assets,net

27,213,391

496,280,316

71,207

Goodwill

5,787,068

100,078,236

14,375,339

Long-term investments

112,219,460

398,637,701

57,260,723

Other assets

25,523

76,957,992

11,054,324

Deferred tax assets

133,966

160,488,193

23,052,687

TOTAL ASSETS

3,079,781,007

3,816,417

548,202,967

LIABILITIES AND EQUITY

Current liabilities:

Short-term bank loans

60,000

60,000

8,618,461

Accounts payable

9,182,058

15,296,042

2,197,139

Advance from customers

36,370,325

40,105,627

5,760,813

Amounts due to related parties

285,578

3,518,031

505,334

Salary and welfare payable

42,767,219

42,650,527

6,126,365

Deferred rent

4,421,427

5,179,664

744,012

Deferred revenue

210,585,604

231,925,272

33,981

Accrued expenses and other current liabilities

241,407,979

366,104,072

52,587,560

Income tax payable

104,638

93,909,177

13,489,208

Total current liabilities

710,008,828

858,688,412

123,342,873

Deferred rent

20,519,682

17,821,686

2,925

Deferred revenue

380,173,585

410,807,248

59,769

Other long-term liabilities

96,573,810

118,112,511

16,801

Deferred tax liabilities

43,538,624

195,303,547

28,053,599

Unrecognized tax benefits

169,619,409

261,641,717

37,582,481

TOTAL LIABILITIES

1,938

1,862,121

267,513,448

Shareholders' equity:

Class A ordinary shares

217,867

219,526,699

31,533,037

Class B ordinary shares

115,210

115,210

16,595,451

Additional paid-in capital

1,003,026,803

1,088,452,506

156,346,420

Retained earnings

252,617,450

308,698,533

44,341,770

Accumulated other comprehensive income

62,367,692

65,854

9,379,881

Total GreenTree Hospitality Group Ltd.shareholders' equity

1,968,022

1,797,802

258,559

Non-controlling interests

8,047

156,591,494

22,492,960

Total shareholders' equity

1,659,347,069

1,954,296

280,689,519

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

3,967

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income

Quarter Ended

Year Ended

December 31,

2018

December 31,

2019

December 31,

2019

RMB

RMB

US$

RMB

RMB

US$

Revenues

Leased-and-operated hotels

56,074

212,603

Franchised-and-managed hotels

183,293

692,669

Total revenues

240,367

905,271

Operating costs and expenses

Hotel operating costs

(71,069)

(92,618)

(13,540)

(274,263)

(338,479)

(48,378)

Selling and marketing expenses

(13,291)

(23,218)

(3,039)

(47,767)

(84,401)

(12,234)

General and administrative expenses

(25,401)

(79,392)

(11,450)

(95,152)

(184,324)

(26,054)

Other operating expenses

(5,699)

(3,942)

(448,870)

(5,226)

(3,652)

(472,098)

Total operating costs and expenses

(116,460)

(198,170)

(28,898)

(423,408)

(612,856)

(87,764)

Other operating(expenses) income

(5,362,471)

7,836,584

1,125,655

22,570,806

24,832,269

3,566,932

Income from operations

118,036,231

98,840

14,189,124

505,161,067

504,552,548

72,474,439

Interest income and other,net

18,544,966

13,787

1,982,934

49,928

66,425

9,493,008

Interest expense

(541,876)

(384,502)

(55,230)

(541,876)

(2,505,904)

(359,951)

(Losses) gains from investment in equity

securities

(29,829,668)

1,137

174,256

(57,774,952)

55,253,744

7,704

Other (expenses)/ income

(987,674)

-

-

35,735,374

2,690,742

386,501

Income before income taxes

105,221,979

113,415,262

16,291,084

532,239,541

626,555

89,701

Income tax expense

(47,805,199)

(39,356,563)

(5,653,217)

(152,718,668)

(189,567,817)

(27,229,713)

Income before share of loss in equity

method investments

57,416,780

74,058,699

10,867

379,520,873

436,511,738

62,700,988

Share of (losses)/ gains in equity investees,

net of tax

(7,226)

483,062

69,388

(8,584)

1,262,431

181,337

Net income

50,064,554

74,541,761

10,707,255

371,220,289

437,169

62,882,325

Net loss attributable to non-controlling interests

106,099

1,204

240,197

490,930

4,944,094

710,175

Net income attributable to ordinary

shareholders

50,170,653

76,965

10,947,452

371,711,219

442,263

63,592,500

Net earnings per share

Class A ordinary share-basic and diluted

0.49

0.75

0.11

3.75

4.34

0.62

Class B ordinary share-basic and diluted

0.49

0.75

0.11

3.75

4.34

0.62

Net earnings per ADS

Class A ordinary share-basic and diluted

0.49

0.75

0.11

3.75

4.34

0.62

Class B ordinary share-basic and diluted

0.49

0.75

0.11

3.75

4.34

0.62

Weighted average shares outstanding

Class A ordinary share-basic and diluted

66,789,300

67,046

67,046

62,860,578

67,241,760

67,760

Class B ordinary share-basic and diluted

34,762,909

34,909

36,288,343

34,909

Other comprehensive income,net of tax

Foreign currency translation adjustments

68,095,749

(12,891,247)

(1,851,712)

66,453,841

2,933,162

421,322

Comprehensive income,net of tax

118,160,303

61,514

8,855,542

437,674,130

440,331

63,647

-

Comprehensive loss attributable to

non-controlling interests

106,175

Comprehensive income attributable to

ordinary shareholders

118,266,402

63,322,718

9,739

438,165,060

445,651,425

64,013,822

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

Quarter Ended

Year Ended

December 31,

2019

RMB

RMB

US$

RMB

RMB

US$

Operating activities:

Net income

50,554

74,761

10,254

371,289

437,169

62,325

Adjustments to reconcile net income

to net cash provided by operating

activities:

Depreciation and amortization

8,144,953

13,476,011

1,935,708

25,549,965

40,366,299

5,798,256

Share of (gain)/loss in equity method

investments

7,226

329,356

47,309

8,584

(140,564)

(20,191)

Gains from disposal of a long-term investment

-

(788,341)

(113,238)

(36,723,048)

(1,097,790)

(157,688)

Interest income

(518,655)

(20,997,598)

(3,016,116)

(20,447,590)

(35,822)

(5,122,213)

Bad debt expense

656,201

32,759,437

4,705,599

1,978,374

38,423,347

5,168

(Gains) loss from investments in equity

securities

29,668

(1,137)

(174,256)

57,952

(55,744)

(7,704)

(Gains) loss on disposal of property and

equipment

(267,849)

860,000

123,531

(267,531

Foreign exchange losses (gains)

4,605,147

(1,494,388)

(214,655)

430,430

(1,408,437)

(202,309)

Share-based compensation

8,540,392

7,857,619

1,128,676

16,108,950

26,490,395

3,107

Income tax expenses related to dividend

distribution or retained profits

23,345,894

7,905,075

1,135,493

23,894

19,845,708

2,850,658

(Gains) from the acquisition of long-term

investment

-

-

-

(1,344,212)

-

Impairment of fixed assets

5,677

-

-

5,677

-

Changes in operating assets and

liabilities:

Accounts receivable

61,532

(21,803,246)

(3,131,840)

(12,368,310)

(52,263,625)

(7,507,200)

Prepaid rent

(336,797)

(12,495)

(1,861,228)

(185,941)

(14,316,252)

(2,056,401)

Inventories

(605,810)

(761,786)

(109,424)

621,293

351,518

50,492

Amounts due from related parties

23,399

(1,232,146)

(176,987)

1,694,216

(3,228,596)

(463,759)

Other current assets

13,250

6,019,451

864,640

(13,400)

10,990,176

1,578,640

Other assets

(1,964,823)

(14,172)

(2,453)

(1,823)

(22,263)

(3,251,639)

Accounts payable

913,846

1,893

217,170

1,183,032

4,814,800

691,603

Amounts due to related parties

(816,797)

2,922

355,788

(187,440)

3,453

464,313

Salary and welfare payable

2,827,062

3,473,761

498,975

(2,203,639)

(2,047,293)

(294,075)

Deferred revenue

288,968

8,470,702

1,216,740

78,439,349

18,973,331

2,725,348

Advance from customers

67,464

2,886,080

414,559

2,962

3,302

536,543

Accrued expenses and other current liabilities

(4,130,578)

(4,113,920)

(590,928)

(7,472,169)

27,083

3,906,760

Income tax payable

9,838

3,404,824

489,072

4,328,055

(12,008)

(1,792,066)

Unrecognized tax benefits

11,554

55,445,186

7,203

56,319,776

92,022,308

13,218,177

Deferred rent

(5,659)

592,980

85,176

(1,731)

(1,939,759)

(278,629)

Other long-term liabilities

4,777,553

9,162

1,363,033

22,636,533

21,701

3,093,841

Deferred taxes

(13,640)

(32,907,584)

(4,726,879)

(24,536)

(30,207,540)

(4,339,042)

Net cash provided by operating activities

152,643,570

118,468,407

17,922

554,949,643

513,897

73,822,847

Investing activities:

Purchases of property and equipment

(23,915,352)

(50,636)

(7,252,957)

(138,471,216)

(97,712,464)

(14,035,517)

Purchases of intangible assets

(246,468)

(2,240,298)

(321,799)

(3,491,958)

(2,799)

Proceeds from disposal of property and

equipment

126,301

(1,561,844)

(224,345)

126,301

(261,844)

(37,612)

Acquisitions,net of cash received

-

(76,037,135)

(10,922,051)

(13,894)

(325,059)

(46,685,636)

Proceeds from disposal of a long-term

investment

-

-

-

89,803

-

-

Advances for acquisitions of equity investees

(12,121,700)

20,242,049

2,588

(18,700)

(38,869,400)

(5,583,240)

Purchases of short-term investments

(25,100,964)

(205,357,454)

(29,497,753)

(772,145)

(823,360)

(118,891)

Proceeds from short-term investments

241,939

345,436

49,422

889,325,672

1,107,076,219

159,021,549

Increase in long-term investments

-

-

-60,000

-

-

Purchases of equity securities

(83,433)

-

-

(88,258,150)

(80,772,222)

(11,602,204)

Purchases of long term investments

-

-

-

-

(247,456,740)

(35,937)

Proceeds from disposal of equity securities

5,574

431,653

62,003

30,376

222,015,253

31,496

Proceeds from disposal of an equity method

investee

-

1,092

240,037

-

1,037

Increase of long-term time deposits

-60,000

-

-

-

(500,000)

(71,820,506)

Repayment from a related party

-

121,780

17,448,473

-

458,752,530

65,895,678

Loan to related parties

-

(288,771,163)

(41,382)

(4,000)

(634,638,425)

(91,106)

Repayment of loan from a related party

-

-

-

-

-

Loan to third parties

-

(65,615,000)

(9,425,005)

(166,819,164)

(332,625,219)

(47,778,623)

Repayment of loan from third parties

118,000

18,360

2,341

118,000

133,817

19,140,426

Loan to franchisees

(8,000)

(24,500,000)

(3,205)

(54,060,267)

(69,151)

(10,049,291)

Repayment from a franchisee

930,000

3,237,956

465,103

10,050,000

10,876

1,403

Net cash (used in) provided by investing

activities

153,457,897

(203,204)

(29,227,528)

(181,756,342)

(1,956,395)

(175,235,772)

Financing activities:

Distribution to the shareholders

-

(18,422)

(2,467)

(200,021)

(226,951,236)

(32,599,505)

Income tax paid related to the above

distribution

-

-

-

(3,000)

-

-

Proceeds from short-term borrowings

60,000

-

-

60,000

-

-

Proceeds from NCI

-

1,481

281,462

-

14,719,481

2,114,321

Proceeds from IPO,net of capitalized expenses

-

-

-

837,007

-

-

Payment for initial public offering costs

(1,437,170)

-

-

(30,578)

-

-

Net cash provided by (used in) financing

activities

58,562,830

(16,941)

(2,005)

663,145,408

(212,231,755)

(30,485,184)

Effect of exchange rate changes on cash and

cash equivalents and restricted cash*

60,504,482

(6,852,606)

(984,315)

66,023,411

(6,917,309)

(993,609)

Net increase (decrease) in cash and cash

equivalents and restricted cash*

425,168,779

(108,344)

(15,631,926)

1,102,120

(925,562)

(132,718)

Cash and cash equivalents and restricted cash*

at the beginning of the period

842,157,006

450,986,567

64,780,167

164,963,665

1,267,785

182,039,959

Cash and cash equivalents and restricted

cash* at the end of the period

1,785

342,223

49,148,241

1,241

GreenTree Hospitality Group Ltd.

Unaudited Reconciliation of GAAP and Non-GAAP Results

Quarter Ended

Year Ended

December 31,

2019

RMB

RMB

US$

RMB

RMB

US$

Net income

50,254

371,325

Deduct:

Other operating income

(5,932

Interest income and other,008

Gains from investments

inequity securities

-

1,256

3,278

77,188

11,067,567

Share of gain in equity investees,

net of tax

-

483,388

141,666

1,550,228

222,676

Other income,net

-

-

-

36,048

2,501

Add:

Other operating expenses

5,870

5,098

Income tax expense

47,199

39,563

5,217

152,668

189,817

27,713

Share of loss in equity investees,

net of tax

7,226

-

-

8,250

287,797

41,339

Interest expense

541,876

384,502

55,230

541,876

2,904

359,951

Share-based compensation

8,950

27,676,666

3,975,504

Depreciation and amortization

8,953

17,785

2,495,444

25,256

Losses from investments in equity

securities

29,668

-

-

60,866,230

21,796,444

3,863

one-time fees and expenses

-

10,367

1,477,831

-

10,831

Asset impariment

-

32,599

-

32,599

Other expense,net

987,674

-

-

987,674

-

-

Adjusted EBITDA (Non-GAAP)

145,751,746

162,348,406

23,889

530,195,402

594,700

85,336,795

Quarter Ended

Year Ended

December 31,325

Deduct:

Government subsidies (net of 25%

tax)

-

-

-

11,580

5,048,981

725,241

Gainsfrom investments in equity

securities (net of 25% tax)

-

909,853

130,692

2,318,459

57,642

8,675

Reimbursement related to the ADS

program

-

-

-

9,271,648

-

-

Other income (net of 25% tax)

-

-

-

27,542,286

2,018,057

289,876

Add:

Share-based compensation

8,504

Lossesfrom investments in equity

securities (net of 25% tax)

22,251

-

-

45,649,672

16,333

2,147

Other expense (net of 25% tax)

740,756

-

-

740,756

-

-

one-offsellingexpense(net of 25%

tax)

-

-

-

-

4,306,969

618,657

One-time attorney fees for M&A(net

of 25% tax)

-

-

-

-

1,153,650

165,711

one-time fees and expenses (net

of 25% tax)

-

7,716,275

1,374

-

7,374

Asset impariment

-

32,599

Income tax expenses related to

dividend distribution outside PRC

23,658

Losses from joint venture closure

7,098,197

-

-

7,197

-

-

Core net income (Non-GAAP)

112,162,044

129,314

18,654,703

413,668,785

482,527

69,183

Core net income per ADS (Non-GAAP)

Class A ordinary share-basic and diluted

1.10

1.27

0.18

4.17

4.73

0.68

Class B ordinary share-basic and diluted

1.10

1.27

0.18

4.17

4.73

0.68

Operational Data

As of

December 31,2018

As of

December 31,2019

Total hotels in operation:

2,757

3,957

Leased-and-owned hotels

29

34

Franchised hotels

2,728

3,923

Total hotel rooms in operation

221,529

290,026

Leased-and-owned hotels

3,734

4,290

Franchised hotels

217,795

285,736

Number of cities

290

339

Quarter Ended

As of

December 31,2019

Occupancy rate (as a percentage)

Leased-and-owned hotels

64.5%

66.6%

Franchised hotels

80.7%

78.4%

Blended

80.4%

78.2%

Average daily rate (in RMB)

Leased-and-owned hotels

212

203

Franchised hotels

163

169

Blended

164

170

RevPAR (in RMB)

Leased-and-owned hotels

137

135

Franchised hotels

132

133

Blended

132

133

Year Ended

2018

2019

Occupancy rate (as a percentage)

Leased-and-owned hotels

68.0%

66.1%

Franchised hotels

82.3%

81.1%

Blended

82.1%

80.9%

Average daily rate (in RMB)

Leased-and-owned hotels

205

211

Franchised hotels

163

169

Blended

164

170

RevPAR (in RMB)

Leased-and-owned hotels

139

140

Franchised hotels

134

137

Blended

135

137

Number of Hotels in Operation

Number of Hotel Rooms in Operation

As of

December 31,2019

As of

December 31,2019

Luxury

/

20

/

4,556

Argyle

/

20

/

4,556

Mid-to-up-scale

109

264

11,422

23,816

GreenTree Eastern

87

105

9,487

11,263

Deepsleep Hotel (无眠酒店)

1

2

62

161

Gem

9

27

841

2,397

Gya

1

26

63

2,167

Vx

11

22

969

1,816

Ausotel

/

10

/

1,183

Urban Garden Hotel

/

69

/

4,557

Unistar Group

/

3

/

272

Mid-scale

2,300

2,563

195,125

209,966

GreenTree Inn

1,881

2,013

162,844

171,414

GT Alliance

302

314

23,607

24,141

GreenTree Apartment

/

7

333

Vatica

117

121

8,674

8,907

City 118 Selected

/

87

4,489

City Mini Selected

/

21

682

Economy hotels

348

1,110

14,982

51,688

Shell

348

541

14,982

23,617

City 118

/

501

/

25,404

Youth Mini Hotel

/

49

/

1,827

Monochrome

/

8

/

278

My Zone Hotel

/

11

/

562

Total

2,957

221,026

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

E-mail:lbergkamp@ChristensenIR.com

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