GreenTree Hospitality Group Ltd. Reports First Quarter 2020 Financial Results

The Company's operations and performance were severely impacted by the outbreak of COVID-19 that resulted in the lock-down of certain cities,business closures,and restrictions on travel imposed by governments around China.

A total of 3,998 hotels with 292,716 hotel rooms were in operation as of March 31,2020,compared to 3,957 hotels and 290,026 hotel rooms as of December 31,2019.

Total revenues decreased 33.1% year-over-year to RMB157.4 million (US$22.2 million)[1].

Adjusted EBITDA (non-GAAP) decreased 64.5% year-over-year to RMB47.6 million (US$6.7 million)[1]

Net income decreased 110.6% year-over-year to net loss of RMB14.1 million (US$2.0 million)[1].

Core net income (non-GAAP) decreased 69.9% year-over-year to RMB27.7 million (US$3.9 million)[1].

Net loss per ADS (basic and diluted) was RMB0.11 (US$0.02)[1].

Core net income per ADS (basic and diluted) (non-GAAP) of the Company was RMB0.27 (US$0.04)[1].

SHANGHAI,June 5,2020 -- 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 first quarter ended March 31,2020.

First Quarter 2020Operational Highlights

As of March 31,the Company had 35 leased-and-operated ("L&O") hotels and 3,963 franchised-and-managed ("F&M") hotels in operation in 342 cities across China,compared to 30 L&O hotels and 2,799 F&M hotels in operation in 292 cities as of March 31,2019. The geographic coverage increased by 17.1% year over year.

During the quarter,the Company opened 62 hotels,a decrease of 40 comparing to 102 hotels in the first quarter of 2019. Among the hotels opened,7 were in the mid-to-up-scale segment,37 in the mid-scale segment,and 18 in the economy segment. Geographically speaking,3 hotels were in Tier 1 cities[2],13 in Tier 2 cities and the remaining 46 in Tier 3 and smaller cities in China.

The Company closed 21 hotels,5 due to brand upgrade,and 8 due to their non-compliance with the Company's brand and operating standards. The remaining 8 were closed for property related issues. The Company added a net opening of 41 hotels to its portfolio.

As of March 31,the Company had a pipeline of 1,025 hotels contracted for or under development,among which 56 hotels were in the luxury hotel segment,200 in the mid-to-up-scale segment,403 in the mid-scale segment,and 366 in the economy segment.

The average daily room rate,or ADR,for all hotels in operation,was RMB150,a decrease of 7.8% year-over-year.

The occupancy rate,or OCC for all hotels in operation was 47.3%,compared with 78.1% in the firstquarter of 2019.

The revenue per available room,or RevPAR,which is calculated by multiplying our hotels' ADR by its occupancy rate,was RMB71,representing a 44.1% year-over-year decrease.

As of March 31,the Company's loyalty program had more than 46 million individual members and over 1,520,000 corporate members,compared to approximately 44 million and over 1,510,000 corporate members as of December 31,2019. The Company had approximately 93.6% of room nights sold directly.

[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB7.0808 on March 31,2020 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20200406/

[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.

"The outbreak of COVID-19 severely impacted our business in the first quarter as a result of the lock-down of certain cities,and restrictions on travel imposed by governments around China." said Mr. Alex Xu,Chairman and Chief Executive Officer of GreenTree."However,it also presented new opportunities that we were able to capture successfully thanks to the extreme dedication of our staff and franchisees who worked relentlessly to guarantee the safety and health of our guests,including medical staff,volunteers and travelers that needed to be quarantined. Our overall performance was better than the average performance across the hospitality industry in China. Our occupancy rate has rebounded and exceed 65% on average in the second half of May,from a low of 21.5% at the end of January.

The Board and our entire management team would like to extend our heartfelt thanks to all our franchisees,employees,guest and medical professionals,police,firefighters,and community leaders who have helped us weather this unprecedented crisis and resume our business rapidly.

As we have emerged from the crisis and as the Chinese economic recovery strengthens,we are well positioned to deliver another year of outstanding services to our guests,strong performance to our franchisees,and sustainable growth to our shareholders."

First Quarter of 2020 Financial Results

Quarter Ended

March 31,

2019

March 31,

2020

March 31,

2020

RMB

RMB

US$

Revenues

Leased-and-operated hotels

51,833,041

33,800,144

4,773,492

Franchised-and-managed hotels

183,460,067

123,595,847

17,455,068

Total revenues

235,293,108

157,395,991

22,228,560

Total revenues were RMB157.4 million (US$22.2 million)[1],representing a 33.1% year-over-year decrease. The decrease was primarily due to the impact of COVID-19,which resulted in declined RevPAR of L&O hotels and F&M hotels,temporary closure of hotels in certain regions according to local governments' requirements,delay in new hotel openings,as well as partial reduction and extension of sublease income. Additionally from February 1,2020to March 31,we reduced franchise management fees and central reservation system ("CRS") usage fees,by 50% to support our franchisees.

Total revenues from leased-and-operated hotels were RMB33.8 million (US$4.8 million)[1],representing a 34.8% year-over-year decrease. The decrease was primarily due to RevPAR decrease of 53.6%,temporary closure of certain hotels,and partial reduction and extension of sublease income,and partially offset by the revenue contributed by 6 L&O hotels of the Urban Hotel Group ("Urban").

Total revenues from franchised-and-managed hotels for the first quarter of 2020 were RMB123.6 million (US$17.5 million)[1],representing a 32.6% year-over-year decrease. Initial franchise fees increased by 2.4% year-over-year,mainly attributable to the gross opening of62 hotels and contribution from historical amortization under ASC606,which was adopted since the first quarter of 2019. The 35.2% decrease from the first quarter of 2019 in recurring franchisee management fees and others was primarily due to the delay in new hotel openings,RevPAR decrease of43.8%,as well as the abovementioned reduction by 50% of franchise management fees and CRS usage fees.

Quarter Ended

March 31,

2020

RMB

RMB

US$

Initial franchise fee

12,752,949

13,052,832

1,843,412

Recurring franchise management fee

and others

170,707,118

110,543,015

15,611,656

Revenues from franchised-and-

managed hotels

183,067

123,847

17,068

Total operating costs and expenses

Quarter Ended

March 31,

2020

RMB

RMB

US$

Operating costs and expenses

Hotel operating costs

79,999,844

89,763,273

12,676,996

Selling and marketing expenses

24,102

17,841,322

2,519,676

General and administrative expenses

25,732,486

28,745,571

4,059,650

Other operating expenses

42,624

1,157,149

163,421

Total operating costs and expenses

130,451,056

137,507,315

19,419,743

Hotel operating costs were RMB89.8 million (US$12.7 million)[1],representing a 12.2% increase from the first quarter of 2019. The increase was mainly attributable to the higher depreciation and amortization,and the consolidation of operation costs of Argyle Hotel Management Group (Australia) Pty Ltd ("Argyle") and Urban. Excluding the impact from newly consolidated entities,hotel operating costs for this quarter decreased 3.9%,which was primarily due to a decrease in salaries of regional general managers,decreases in utilities,consumable,food and beverage,that resulted from the declined occupancy rate.

Quarter Ended

March 31,

March 31,

2019

2020

2020

RMB

RMB

US$

Rental

20,608,265

27,102,982

3,827,672

Utilities

6,154,563

4,420,190

624,250

Personnel cost

8,794,274

10,230,645

1,444,843

Depreciation and amortization

6,524,205

11,338,835

1,601,349

Consumable,food and beverage

6,837,151

8,750,868

1,235,859

Costs of general managers of franchised-and-

managed hotels

22,643

20,642,648

2,915,299

Other costs of franchised-and-managed hotels

5,686,583

4,503,060

635,954

Others

2,950,160

2,774,045

391,770

Hotel Operating Costs

79,844

89,273

12,996

Selling and marketing expenses were RMB17.8 million (US$2.5 million)[1],representing a 27.7% year-over-year decrease. The decrease was mainly attributable to decreases in cost for advertising,travelling and meals,because of measures taken to control the spread of COVID-19,including the lock-down of certain cities,and restrictions on travel. Excluding Argyle's and Urban's expenses,selling and marketing expenses in this quarter decreased 34.0%.

General and administrative expenses were RMB28.7 million (US$4.1 million)[1],representing a 11.7% year-over-year increase. The increase was primarily attributable to increased legal and accounting consulting fees,and the consolidation of expenses from Argyle and Urban. Excluding Argyle and Urban,G&A expenses decreased by 15.5%,mainly due to the decrease in staff related costs and compensation expenses.

Gross profitwas RMB67.6 million (US$9.6 million)[1],representing a decrease of 56.4% from the first quarter of 2019. Gross margin was 43.0%,compared to 66.0% a year ago. The decrease was primarily due to decreased revenues as a result of COVID-19.

Income from operationstotaled RMB37.2 million (US$5.3 million)[1],representing a year-over-year decrease of 66.7%. The decrease was mainly due to decreased revenues resulting from lower RevPAR,and delays in new hotel openings. Operating margin,defined as income from operations as percentage of total revenues,was 23.6%,compared to 47.5% a year ago.

Adjusted EBITDA (non-GAAP) was RMB47.6 million (US$6.7 million)[1],representing a year-over-year decrease of 64.5%. Adjusted EBITDA margin,defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues,was 30.2%,compared to 56.9% in the first quarter of 2019.

Net loss was RMB14.1 million (US$2.0 million)[1],representing a year-over-year decrease from netincomeof 110.6%. Net margin was -9.0%,compared to 56.9% a year ago. The year-over-year decrease was primarily due to revenue decrease and losses from investments in equity securities,partially offset by interest income.

Core net income (non-GAAP)was RMB27.7 million (US$3.9 million)[1],representing a year-over-year decrease of 69.9%. The core net margin,defined as core net income (non-GAAP) as a percentage of total revenues,was 17.6%,compared to 39.2% one year ago.

Loss per ADS (basic and diluted) was RMB0.11 (US$0.02)[1],down from earnings per ADS of RMB1.33 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB0.27 (US$0.04) [1],down from RMB0.91 in the first quarter of 2019.

Cash flow. Operating cash outflow was RMB48.4 million (US$6.8 million)[1] as a result of an operational net income loss because of COVID-19. Investing cash inflow was RMB155.0 million (US$21.9 million)[1],which was primarily attributable to proceeds from short-term investments and partially offset by loan to franchisees. Financing cash inflow was RMB10.4 million (US$1.47 million)[1].

Cash and cash equivalents,restricted cash,short-term investments,investments in equity securities and time deposit.As of March 31,the Company had a total balance of cash and cash equivalents,short term investments,investments in equity securities and time deposits of RMB1,613.9 million (US$227.9 million)[1],as compared to RMB1,809.3 million as of December 31,2019,primarily due to loans to franchisees,losses from investment in equity securities,and investment on upgrade decoration.

COVID-19 Update

Thanks to the ChineseGovernment's efforts to contain the spread of COVID-19,the outbreak has come under control in China. Since March,travel between cities has gradually returned to normal and a growing number of companies have resumed business.

Thanks to the effective policies and financial assistance from central and local governments and support measures from GreenTree,most franchisees have now resumed business operations. Occupancy rate has rebounded and exceed 65% on average in the second half of May,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 second quarter of 2020 of 18%-23% year-over-year,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 views 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 9:00 PM U.S. Eastern Time on June 4,2020 (9:00 AM Beijing/Hong Kong Time on June 5,2020).

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 untilJune 11,2020.

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:

10144342

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 March 31,GreenTree had a total number of 3,998 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.

-Financial Tables and Operational Data Follow-

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Balance Sheets

December 31,

2019

2020

2020

RMB

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

319,847,701

436,432,446

61,636,036

Short-term investment

437,279,026

146,226,781

20,651,167

Investments in equity securities

207,007,926

181,073,060

25,572,401

Accounts receivable,net of allowance for doubtful accounts

99,701,226

87,660,139

12,379,977

Amounts due from related parties

31,739,731

30,944,889

4,370,253

Prepaid rent

18,665

14,458,999

2,042,001

Inventories

2,537,717

2,931,930

414,068

Other current assets

66,004,017

45,688,487

6,452,447

Loans receivable,net

82,312,201

124,652,138

17,604,245

Total current assets

1,265,224,210

1,070,068,869

151,122,595

Non-current assets:

Restricted cash

22,522

22,169,900

3,130,988

Long-term time deposits

560,000,000

590,000

83,323,918

Loan receivable,net

121,563,742

164,938,342

23,744

Property and equipment,net

614,936,505

626,620,753

88,495,757

Intangible assets,net

496,280,316

494,253,797

69,801,971

Goodwill

100,078,236

100,236

14,133,747

Long-term investments

398,637,701

374,207,313

52,848,169

Other assets

76,957,992

82,640,300

11,671,040

Deferred tax assets

160,488,193

169,881,712

23,991,880

TOTAL ASSETS

3,816,479,417

3,694,859,222

521,813,809

LIABILITIES AND EQUITY

Current liabilities:

Short-term bank loans

60,000

70,000

9,885,889

Accounts payable

15,296,042

16,582,188

2,341,852

Advance from customers

40,105,627

37,531,426

5,300,450

Amounts due to related parties

3,518,031

1,500,008

211,842

Salary and welfare payable

42,650,527

40,633,276

5,738,515

Deferred rent

5,179,664

5,337,577

753,810

Deferred revenue

231,925,272

225,381,221

31,829,909

Accrued expenses and other current liabilities

302,448,361

199,959,098

28,239,620

Income tax payable

93,909,177

77,757,910

10,981,514

Total current liabilities

795,032,701

674,682,704

95,283,401

Deferred rent

17,821,686

22,725,535

3,209,459

Deferred revenue

410,807,248

386,782

54,574,735

Other long-term liabilities

118,112,511

131,107,040

18,515,851

Deferred tax liabilities

195,303,547

194,729,437

27,501,050

Unrecognized tax benefits

261,641,717

275,926,946

38,968,329

TOTAL LIABILITIES

1,798,719,410

1,685,444

238,825

Shareholders' equity:

Class A ordinary shares

219,526,699

222,587,070

31,435,300

Class B ordinary shares

115,534,210

115,210

16,316,548

Additional paid-in capital

1,152,108,217

1,149,404

162,309,401

Retained earnings

308,698,533

296,852,879

41,923,636

Accumulated other comprehensive income

65,854

70,298,087

9,927,985

Total GreenTree Hospitality Group Ltd. shareholders' equity

1,861,168,513

1,854,552,650

261,912,870

Non-controlling interests

156,591,494

154,702,128

21,114

Total shareholders' equity

2,017,760,007

2,009,254,778

283,984

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

3,809

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income

Quarter Ended

March 31,2019

March 31,2020

March 31,2020

RMB

RMB

US$

Revenues

Leased-and-operated hotels

51,560

Operating costs and expenses

Hotel operating costs

(79,844)

(89,273)

(12,996)

Selling and marketing expenses

(24,102)

(17,322)

(2,676)

General and administrative expenses

(25,486)

(28,571)

(4,650)

Other operating expenses

(42,624)

(1,149)

(163,421)

Total operating costs and expenses

(130,056)

(137,315)

(19,743)

Other operating income

6,906,453

17,330,931

2,447,595

Income from operations

111,748,505

37,219,607

5,256,412

Interest income and other,net

16,469,011

10,613,260

1,498,879

Interest expense

(685,125)

(1,010,255)

(142,675)

Gains/(losses) from investment in equity securities

59,934,470

(55,174,918)

(7,792,187)

Other income,net

829,781

-

-

Income/(loss) before income taxes

188,642

(8,352,306)

(1,571)

Income tax expense

(54,165,392)

(6,177,560)

(872,438)

Income/(loss) before share of (losses)/gains in equity investees

134,131,250

(14,529,866)

(2,009)

Share of (losses)/gains in equity investees,net of tax

(173,231)

394,844

55,763

Net income/(loss)

133,958,019

(14,135,022)

(1,996,246)

Net loss attributable to non-controlling interests

955,533

2,289,368

323,320

Net income/(loss) attributable to ordinary shareholders

134,913,552

(11,845,654)

(1,672,926)

Net earnings/(losses) per share

Class A ordinary share-basic and diluted

1.33

(0.11)

(0.02)

Class B ordinary share-basic and diluted

1.33

(0.11)

(0.02)

Net earnings/(losses) per ADS

Class A ordinary share-basic and diluted

1.33

(0.11)

(0.02)

Class B ordinary share-basic and diluted

1.33

(0.11)

(0.02)

Weighted average shares outstanding

Class A ordinary share-basic and diluted

67,015,625

68,286,954

68,954

Class B ordinary share-basic and diluted

34,762,909

34,909

Other comprehensive (loss)/income,net of tax

Foreign currency translation adjustments

(14,802,518)

4,997,233

705,744

Comprehensive income/(loss),net of tax

119,155,501

(9,137,789)

(1,290,502)

Comprehensive loss attributable to non-controlling interests

955,320

Comprehensive income/(loss) attributable to ordinary shareholders

120,111,034

(6,421)

(967,182)

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

Quarter Ended

March 31,2020

RMB

RMB

US$

Operating activities:

Net income/(loss)

133,019

(14,022)

(1,246)

Adjustments to reconcile net income to net cash provided

by operating activities:

Depreciation and amortization

7,670,772

15,666,645

2,212,553

Share of losses/(gains) in equity method investments

173,231

(394,844)

(55,763)

Interest income

(7,961,638)

(2,744,441)

(387,589)

Bad debt expense

891,369

5,919,636

836,012

(Gains)/losses from investments in equity securities

(59,470)

55,917

7,187

Foreign exchange (gains)/losses

(204,117)

1,432

163,461

Share-based compensation

4,849,451

232,558

32,843

Income tax expenses related to dividend distribution or

retained profits

3,844,492

4,000

564,908

Changes in operating assets and liabilities:

Accounts receivable

(18,018,161)

6,121,451

864,514

Prepaid rent

711,581

4,335,665

612,314

Inventories

1,883

(394,213)

(55,674)

Amounts due from related parties

3,600

794,843

112,253

Other current assets

7,196,789

20,315,530

2,869,101

Other assets

(4,689,629)

(5,307)

(802,495)

Accounts payable

4,198,665

1,146

181,639

Amounts due to related parties

(66,764)

(2,023)

(284,999)

Salary and welfare payable

(7,363,593)

(2,251)

(284,890)

Deferred revenue

(4,393,076)

(30,918,517)

(4,366,529)

Advance from customers

(1,782)

(2,201)

(363,547)

Accrued expenses and other current liabilities

25,592,668

(104,735,404)

(14,791,465)

Income tax payable

23,883,063

(16,151,267)

(2,995)

Unrecognized tax benefits

6,046,751

14,285,229

2,460

Deferred rent

(292,571)

5,061,762

714,857

Other long-term liabilities

1,047,726

12,994,529

1,835,178

Deferred taxes

5,270,154

(13,967,629)

(1,972,606)

Net cash provided by (used in) operating activities

122,192,413

(48,386,776)

(6,518)

Investing activities:

Purchases of property and equipment

(9,949)

(23,232)

(3,259,269)

Proceeds from disposal of property and equipment

300,000

-

-

Acquisitions,net of cash received

(10,000)

-

-

Purchases of short-term investments

(182,229,182)

(101,000)

(14,302,056)

Proceeds from short-term investments

716,055,975

395,066,686

55,075

Increase in long-term investments

(440,000)

(30,000)

(4,236,809)

Purchases of investments in equity securities

(1,976,351)

-

-

Purchases of long term investments

(249,464,401)

-

-

Proceeds from disposal of equity securities

108,603,914

-

-

Loan to related parties

(10,000)

(165,516,500)

(23,375,395)

Repayment from a related party

-

165,500

23,395

Loan to third parties

(15,940,000)

(2,000)

(282,454)

Loan to franchisees

(18,000)

(98,730,000)

(13,943,340)

Repayment from a franchisee

5,397

15,463

2,120,588

Net cash (used in) provided by investing activities

(106,546,597)

155,003,917

21,890,735

Financing activities:

Distribution to the shareholders

(208,025,814)

-

-

Proceeds from short-term borrowings

-

10,000

1,412,270

Proceeds from non controlling interests

10,390,000

400,000

56,491

Net cash (used in) provided by financing activities

(197,635,814)

10,400,000

1,468,761

Effect of exchange rate changes on cash and cash

equivalents and restricted cash

(11,960)

(575,018)

(81,209)

Net (decrease) increase in cash and cash equivalents and

restricted cash

(193,679,958)

116,442,123

16,769

Cash and cash equivalents and restricted cash at the

beginning of the period

1,267,325,785

342,160,223

48,322,255

Cash and cash equivalents and restricted cash at the end

of the period

1,645,827

458,602,346

64,767,024

GreenTree Hospitality Group Ltd.

Unaudited Reconciliation of GAAP and Non-GAAP Results

Quarter Ended

March 31,2020

RMB

RMB

US$

Net income/(loss)

133,246)

Deduct:

Other operating income

6,595

Gains from investment in equity securities

59,470

-

-

Share of gain in equity investees,net of tax

-

394,763

Other income,781

-

-

Add:

Other operating expenses

42,421

Income tax expense

54,392

6,560

872,438

Share of loss in equity investees,net of tax

173,231

-

-

Interest expense

685,125

1,255

142,675

Share-based compensation

4,843

Depreciation and amortization

7,553

Losses from investment in equity securities

-

55,918

7,187

Adjusted EBITDA (Non-GAAP)

133,873,910

47,558,288

6,716,513

Quarter Ended

March 31,246)

Deduct:

Government subsidies (net of 25% tax)

4,815,000

12,572

1,755,815

Gains from investment in equity securities(net of 25% tax)

44,853

-

-

Other income(net of 25% tax)

622,336

-

-

Add:

Share-based compensation

4,843

Losses from investments in equity securities

-

50,081,189

7,072,815

Income tax expenses related to dividend distribution

3,908

Core net income (Non-GAAP)

92,263,773

27,746,153

3,505

Core net income per ADS (Non-GAAP)

Class A ordinary share-basic and diluted

0.91

0.27

0.04

Class B ordinary share-basic and diluted

0.91

0.27

0.04

Operational Data

As of March 31,2019

As of March 31,2020

Total hotels in operation:

2,829

3,998

Leased-and-owned hotels

30

35

Franchised hotels

2,799

3,963

Total hotel rooms in

operation

225,757

292,716

Leased-and-owned hotels

3,790

4,349

Franchised hotels

221,967

288,367

Number of cities

292

342

Quarter Ended

As of March 31,2020

Occupancy rate (as a

percentage)

Leased-and-owned hotels

59.6%

32.7%

Franchised hotels

78.4%

47.7%

Blended

78.1%

47.3%

Average daily rate (in RMB)

Leased-and-owned hotels

200

169

Franchised hotels

162

149

Blended

162

150

RevPAR (in RMB)

Leased-and-owned hotels

119

55

Franchised hotels

127

71

Blended

127

71

Number of Hotels in Operation

Number of Hotel Rooms in Operation

As of March 31,2020

As of March 31,2020

Luxury

/

20

/

4,607

Argyle

/

20

/

4,607

Mid-to-up-scale

124

272

12,718

24,595

GreenTree Eastern

91

109

9,732

11,649

Deepsleep Hotel

1

2

62

161

Gem

14

28

1,337

2,517

Gya

5

26

445

2,165

Vx

13

22

1,142

1,766

Ausotel

/

10

/

1,287

Urban Garden and others*

/

75

/

5,050

Mid-scale

2,318

2,582

196,323

211,155

GreenTree Inn

1,901

2,027

164,181

172,385

GT Alliance

294

315

23,090

24,231

GreenTree Apartment

2

10

129

438

Vatica

121

122

8,923

8,937

City 118 Selected and others*

/

108

/

5,164

Economy hotels

387

1,124

16,716

52,359

Shell

387

555

16,716

24,215

City 118 and others*

/

569

/

28,144

Total

2,998

225,716

*Others include other brands in each segment of Urban

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

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