GreenTree Hospitality Group Ltd. Reports Fourth Quarter and Fiscal Year 2020 Financial Results

Author: GreenTree Hospitality Group Ltd. / 2023-07-23 22:43 / Source: GreenTree Hospitality Group Ltd.

GreenTree Hospitality Group Ltd. Reports Fourth Quarter and Fiscal Year 2020 Financial Results

Continuous Recovery

Total revenues increased 8.6% to RMB289.8 million (US$44.4 million)[1] from RMB266.9 million in the third quarter.

Income from operations increased 17.4% to RMB118.5 million (US$18.2 million) [1] from RMB100.9 million in the third quarter.

Adjusted EBITDA (non-GAAP) [2] increased 17.8% to RMB130.6 million (US$20.0 million) [1] from RMB110.8 million in the third quarter.

Core net income (non-GAAP) increased 18.3% to RMB109.3 million (US$16.8 million) [1] from RMB92.4 million in the third quarter.

SHANGHAI,April 15,2021 -- 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 2020.

Fourth Quarter of 2020 Operational Highlights

A total of 4,340 hotels with 315,335 hotel rooms were in operation as of December 31,2020,compared to 4,195 hotels and 305,125 hotel rooms as of September 30,2020.

As of December 31,the Company had 40 leased-and-operated ("L&O") hotels and 4,300 franchised-and-managed ("F&M") hotels in operation in 345 cities across China,compared to 34 L&O hotels and 3,923 F&M hotels in operation in 339 cities as of December 31,2019. The geographic coverage increased by 1.8% year over year.

During the quarter,the Company opened 203 hotels,an increase of 13 comparing to 190 hotels in the fourth quarter of 2019. Among the hotels opened,3 was in the luxury segment,29 in the mid-to-up-scale segment,141 in the mid-scale segment,and 30 in the economy segment. Geographically speaking,19 hotels were in Tier 1 cities [3],42 in Tier 2 cities and the remaining 142 in Tier 3 and smaller cities in China.

The Company closed 58 hotels,8 due to brand upgrades,and 35 due to their non-compliance with the Company's brand and operating standards. The remaining 15 were closed for property related issues. The Company added a net opening of 145 hotels to its portfolio.

As of December 31,the Company had a pipeline of 1,186 hotels contracted for or under development,among which 54 hotels were in the luxury hotel segment,246 in the mid-to-up-scale segment,483 in the mid-scale segment,and 403 in the economy segment.

The average daily room rate,or ADR,for all hotels in operation,was RMB 162,a decrease of 3.6% year over year,an increase of 7.3% compared with the third quarter.

The occupancy rate,or OCC for all hotels in operation was 76.7%,an increase of 0.3% compared with 76.4% in the fourthquarter of 2019,and a decrease of 2.4% compared with 79.1% in the third quarter of 2020.

The revenue per available room,or RevPAR,which is calculated by multiplying our hotels' ADR by its occupancy rate,was RMB 124,representing a -3.2% year-over-year decrease,and a 4.1% sequential increase.

As of December 31,the Company's loyalty program had more than 56 million individual members and approximately 1,670,000 corporate members,compared to approximately 52 million and over 1,610,000 corporate members as of September 30,2020. The Company had approximately 92.2% of room nights sold directly.

2020 Full Year Operational Highlights

For the full year 2020,the Company opened 538 hotels,a decrease of 11.4% comparing to 607 newly opened hotels in the full year 2019. Among the hotels opened,5 were in the luxury hotel segment,109 in the mid-to-up-scale segment,308 in the mid-scale segment,and 116 in the economy segment. Geographically speaking,33 hotels were in Tier 1 cities,120 were in Tier 2 cities and the remaining 385 were in Tier 3 and other cities in China.

During this year,the Company closed 155 hotels,21 due to brand upgrade,and 89 due to their non-compliance with the Company's brand and operating standards. The remaining 45 were closed for property related issues. The Company added a net opening of 383 hotels to its portfolio.

The average daily room rate,was RMB152 in the full year 2020,a decrease of 9.6% year-over-year.

The occupancy rate,or OCC for all hotels in operation was 68.7% in the full year 2020,compared with77.8% in the full year 2019.

The revenue per available room,was RMB105 in the full year 2020,representing a 20.1% year-over-year decrease.

"Despite the many unprecedented challenges brought upon us by COVID-19,the company delivered a robust Q4,with sequential improvement in operating and financial metrics above the average of the hospitality industry," said Mr. Alex Xu,Chairman and Chief Executive Officer of GreenTree. "I am extremely grateful for the achievements of our team. I cannot thank enough,all of our employees,franchisees,and guests,for their support and dedication. Thanks to our resilient business model,we were able to weather an extremely difficult year in the travel industry,and perform better than most of our peers. With our well-segmented and robust brand portfolio,the loyalty of our members and our strong balance sheet,we are well-positioned to capitalize on opportunities and create long-term and sustainable growth for our shareholders,in 2021 and beyond. " continued Mr. Xu.

Fourth Quarter of 2020 Financial Results

Quarter Ended

December 31,2019

December 31,2020

RMB

US$

Revenues

Leased-and-operated hotels

68,553,356

76,113,015

11,664,830

Franchised-and-managed hotels

217,190,598

207,222,721

31,758,272

others

3,688,472

6,420,830

984,035

Total revenues

289,432,426

289,756,566

44,407,137

Year Ended

December 31,2020

RMB

US$

Revenues

Leased-and-operated hotels

253,676

227,074,041

34,800,619

Franchised-and-managed hotels

831,340,340

677,480,818

103,828,478

others

7,032,119

25,455,237

3,901,186

Total revenues

1,091,793,135

930,010,096

142,530,283

Total revenues for the fourth quarter of 2020 were RMB289.8 million (US$44.4 million) [1],representing a 0.1% year-over-year increase. The slight increase was primarily due to the sustained recovery in hotel operations from the impact of COVID-19,as well as the revenue contribution from the newly opened L&O hotels. Total revenues increased from RMB266.9 million in the third quarter,a 8.6% sequential increase,which was mainly attributable to a RevPAR growth from 120 RMB to 124 RMB. Total revenues for the full year 2020 were RMB930.0 million (US$142.5 million) [1],representing a 14.8% decrease.

Total revenues from leased-and-operated hotels for the fourth quarter of 2020 were RMB76.1 million (US$11.7 million) [1],representing a 11.0% year over year increase. The increase was primarily due to the RevPAR increase of 0.6% compared to one year ago,the contribution from L&O hotels of the Urban Hotel Group ("Urban"),as well as the contribution from 10 newly opened L&O hotels in 2020. The revenue increase was partially offset by the reduction and extension of sublease income,and the closure of 4 L&O hotels in 2020. Compared with the third quarter,total revenues from L&O hotels increased by 13.9%,mainly attributable to rising RevPAR and net newly opened 3 L&O hotels. Total revenues from L&O hotels for the full year 2020 were RMB227.1 million (US$34.8 million) [1],representing a 10.4% decrease.

Total revenues from franchised-and-managed hotels for the fourth quarter of 2020 were RMB207.2 million (US$31.8 million) [1],representing a 4.6% year-over-year decrease. Initial franchise fees increased by 32.3% year over year,mainly attributable to the gross opening of 199 hotels. The 7.1% decrease from the fourth quarter of 2019 in recurring franchisee management fees and others was primarily due to RevPAR decrease of 3.4%,as well as the reduction in franchise fees and central reservation fees for hotels affected by COVID-19. Compared with the third quarter,initial franchise fees increased by 8.7%,mainly attributable to more hotels opened; recurring franchisee management fees and others increased by 3.1%,mainly due to RevPAR sequential growth from 120RMB to 124RMB. Total revenues from F&M hotels for the full year 2020 were RMB677.5 million (US$103.8 million) [1],representing a 18.5% decrease.

Quarter Ended

December 31,2020

RMB

US$

Initial franchise fee

13,655,873

18,065,889

2,768,719

Recurring franchise

management fee and others

203,534,725

189,156,832

28,989,553

Revenues from franchised-and-managed hotels

217,598

207,721

31,272

Year Ended

December 31,2020

RMB

US$

Initial franchise fee

54,930,266

61,051,369

9,356,532

Recurring franchise

management fee and others

776,410,074

616,429,449

94,471,946

Revenues from franchised-

and-managed hotels

831,340

677,818

103,478

Total operating costs and expenses

Quarter Ended

December 31,2020

RMB

US$

Operating costs and expenses

Hotel operating costs

92,609,618

99,817,161

15,297,650

Selling and marketing expenses

23,155,218

24,232,688

3,713,822

General and administrative expenses

79,597,392

50,885,097

7,798,482

Other operating expenses

3,124,942

98,341

15,071

Total operating costs and expenses

198,487,170

175,033,287

26,825,025

Year Ended

December 31,2020

RMB

US$

Operating costs and expenses

Hotel operating costs

338,826,479

392,522,306

60,675

Selling and marketing expenses

84,970,401

75,347,166

11,547,458

General and administrative expenses

184,324

172,557,554

26,445,602

Other operating expenses

3,286,652

1,731,405

265,350

Total operating costs and expenses

612,072,856

642,158,431

98,415,085

Hotel operating costs for the fourth quarter of 2020 were RMB99.8 million (US$15.3 million) [1],representing a 7.8% increase year over year. The increase was mainly attributable to higher rents and other cost related to L&O hotels. In the fourth quarter,there were 4 L&O hotels newly opened,which accounted for the main increase in hotel operating costs. Excluding L&O hotel operating costs,costs related to F&M hotels and others decreased 7.0%. Compared with the third quarter,we observe a 7.6% sequential decrease,mainly due to higher newly opening expenses in the third quarter. For the full year 2020,hotel operating costs were RMB392.5 million (US$60.2 million) [1],representing a 15.8% increase.

Quarter Ended

December 31,

2019

2020

RMB

US$

Rental

22,270,218

28,196,927

4,321,368

Utilities

3,842,009

4,416

630,409

Personnel cost

10,069,427

10,034,679

1,537,882

Depreciation and amortization

15,401,030

13,450,611

2,061,396

Consumable,food and beverage

6,136,477

11,584,105

1,775,342

Costs of general managers of franchised-and-

managed hotels

23,458,837

26,088,907

3,998,300

Other costs of franchised-and-managed hotels

7,799,192

5,132,814

786,638

Others

3,632,428

1,215,702

186,315

Hotel Operating Costs

92,618

99,161

15,650

Year Ended

December 31,

2019

2020

RMB

US$

Rental

79,408

118,295,183

18,129,530

Utilities

19,119,300

15,372,385

2,355,921

Personnel cost

38,277,298

41,330,758

6,334,216

Depreciation and amortization

34,727,153

50,324,493

7,712,566

Consumable,food and beverage

27,666,435

43,257,796

6,629,547

Costs of general managers of franchised-and-managed hotels

96,565,044

91,745

14,048,237

Other costs of franchised-and-managed hotels

29,192,923

22,985,917

3,746

Others

13,680,917

9,291,029

1,423,912

Hotel Operating Costs

338,479

392,306

60,675

Selling and marketing expenses for the fourth quarter of 2020were RMB24.2 million (US$3.7 million) [1],representing a 4.7% year-over-year increase. The increase was mainly attributable to increases in advertising costs. Compared with the third quarter,selling and marketing expenses increased by 13.9%,attributable to higher advertising expense. For the full year of 2020,selling and marketing expenses were RMB75.3 million (US11.5 million) [1],representing a 11.3% decrease.

General and administrative expenses for the fourth quarter of 2020 were RMB50.9 million (US$7.8 million) [1],representing a 36.1% year-over-year decrease. The decrease was primarily attributable to the effective control of business travel expenses and the impact of a one-time provision for bad debts during the same period last year. Excluding the impact of this bad debt provision in the fourth quarter of 2019,G&A expenses decreased by 14.3%. Compared with the third quarter,G&A expenses increased by 13.6%,which was mainly attributable to the increase of consulting fees and higher staff costs. General and administrative expenses for the full year 2020 were RMB172.6 million (US$26.4 million) [1],representing a 6.7% year-over-year decrease.

Gross profit for the fourth quarter of 2020 was RMB189.9 million (US$29.1 million) [1],representing a year-over-year decrease of 3.5%. Gross margin was 65.6%,compared to 68.0% a year ago. The decrease was primarily due the impact of COVID-19. Compared with the third quarter,gross profit increased by 19.6%,and gross margin increased from 59.5% to 65.6%. Gross profit for the full year 2020 was RMB537.5 million (US$82.4 million) [1],representing a 28.6% year-over-year decrease.

Income from operations for the fourth quarter of 2020 totaled RMB118.5 million (US$18.2 million) [1],representing a year-over-year increase of 19.9%. The increase was mainly due to the sustained RevPAR recovery,the increased number of hotels and better control of costs and expenses during the quarter. Operating margin,defined as income from operations as percentage of total revenues,was 40.9%,compared to 34.1% a year ago. Compared with the third quarter,income from operations increased by 17.4%,and operating margin increased from 37.8% to 40.9%,mainly attributable to revenue increase. Income from operations for the full year 2020 totaled RMB319.3 million (US$48.9 million) [1],representing a year-over-year decrease of 36.7%.

Adjusted EBITDA (non-GAAP) [2]for the fourth quarter of 2020 was RMB130.6 million (US$20.0 million) [1],representing a year-over-year increase of 17.2%. Adjusted EBITDA margin,defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues,was 45.1%,compared to 38.5% a year ago. Compared with the third quarter,adjusted EBITDA increased by 17.8%,and adjusted EBITDA margin increased from 41.5% to 45.1%. Adjusted EBITDA (non-GAAP) for the full year 2020 was RMB355.5 million (US$54.5 million) [1],representing a year-over-year decrease of 32.1%.

Net income for the fourth quarter of 2020 was RMB79.5 million (US$12.2 million) [1],representing a year-over-year increase of 6.6%. Net margin was 27.4%,compared to 25.8% a year ago,the year-over-year increase was mainly attributable to the increase in income from operations. Compared with the third quarter,net income decreased by 7.2%,and net margin decreased from 32.1% to 27.4%,mainly due to losses from investments in equity securities. Net income for the full year 2020 was RMB244.7 million (US$37.5 million) [1],representing a year-over-year decrease of 44.1%.

Core net income (non-GAAP) for the fourth quarter of 2020 was RMB109.3 million (US$16.8 million) [1],representing a year-over-year increase of 22.3%. The core net margin,defined as core net income (non-GAAP) as a percentage of total revenues,was 37.7%,compared to 30.9% one year ago. Compared with the third quarter,core net income increased by 18.3%. Core net income (non-GAAP) for the full year 2020 was RMB289.5 million (US$44.4 million) [1],representing a year-over-year decrease of 33.9%.

Earnings per ADS (basic and diluted) for the fourth quarter of 2020 was RMB0.83 (US$0.13) [1],up from earnings per ADS of RMB0.75 one year ago and up from RMB 0.81 in the third quarter of 2020,mainly due to the recovery and improvement of operating profit. Core net income per ADS (basic and diluted) (non-GAAP) was RMB1.06 (US$0.16) [1],up from RMB0.87 a year ago,up from RMB0.90 of the third quarter of 2020. Earnings per ADS (basic and diluted) for the full year 2020 was RMB2.54 (US$0.39) [1],down from RMB4.34 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) was RMB2.81 (US$0.43) [1] for the full year 2020,decreased from RMB4.29 of 2019.

Cash flow. Operating cash inflow for the fourth quarter of 2020 was RMB112.8 million (US$17.3 million) [1] as a result of the recovery from COVID-19 and improved operating performance. Investing cash outflow for the fourth quarter of 2020 was RMB 161.7 million (US$24.8 million) [1],which was primarily attributable to loans to franchisees,investment in property and equipment and renovation on L&O hotels. The investing cash outflow was partially offset by repayment from franchisees,as well as proceeds from short-term investments. Financing cash inflow was RMB99.8 million (US$15.3million).Operating cash inflow for the full year 2020 was RMB297.3 million (US$45.6 million) [1]. Investing cash outflow for the full year 2020 was RMB115.6 million (US$17.7million) [1]. Financing cash inflow for the full year 2020 was RMB117.5million (US$18.0 million) [1].

Cash and cash equivalents,restricted cash,short-term investments,investments in equity securities and time deposit. As of December 31,the Company had total cash and cash equivalents,short term investments,investments in equity securities and time deposits of RMB1,904.9 million (US$291.9 million) [1],compared to RMB1,815.4 million as of September 30,2020. The increase from the third quarter was primarily attributable to increased cash inflow from operating activities,offset by loans to franchisees,and investments and upgrade costs at our L&O hotels.

COVID-19 Update

Due to the resurgence of Covid-19 in several provinces and cities like Hebei,Shanghai,and Beijing,our occupancy rate declined in Q4 2020 and January 2021. Occupancy rate was at its lowest during the Chinese spring festival,due to the government's stay-local policy; however,it rebounded quickly,especially after March 16 when people could travel more freely in low-risk zones. With the rollout of the COVID-19 vaccines,most travel restrictions have been lifted. According to the official microblog of the Ministry of Culture and Tourism,the Tomb Sweeping holiday on April 5,2021 saw 102 million domestic tourists. That represents a year-over-year growth of 144.6%,and 94.5% of the number of domestic tourists in the same period in 2019. By early April,our occupancy rate had recovered to 77.7%,and Revpar recovered to 92.7% of the 2019 levels. By the end of 2020 we had proved to be more resilient,and so performed better than most of our peers.

Guidance

So far in 2020,our operations are in line with our previous forecast. Assuming the pandemic remains under control in China in further quarters,the Company expects an increase in total revenues of 48%-53% for the full year 2021,compared to 2020; and an increase in total revenues of 25%-30% for the full year 2021,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 9:00PM U.S. Eastern Time on April 14,2021(9:00 AMBeijing/Hong Kong Time onApril 15,2021).

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

International

1-412-902-4272

Mainland China

4001-201-203

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 21,2021.

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:

10152831

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 4,340 hotels. In 2019,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 2019 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

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

319,847,701

611,358,209

93,694,745

Short-term investment

437,279,026

301,983,182

46,280,947

Investments in equity securities

207,007,926

242,378,696

37,146,160

Accounts receivable,net of allowance

99,701,226

101,511,057

15,250

Amounts due from related parties

31,739,731

9,770,871

1,497,451

Prepaid rent

18,794,665

13,867

2,083,964

Inventories

2,717

3,804,680

583,093

Other current assets

66,004,017

77,649,794

11,900,352

Loans receivable,net

82,312,201

222,244,629

34,060,480

Total current assets

1,265,224,210

1,298,985

242,442

Non-current assets:

Restricted cash

22,522

22,369,900

3,428,337

Long-term time deposits

560,000,000

490,000

75,095,785

Loan receivable,net

121,563,742

145,703,988

22,113

Property and equipment,net

614,936,505

668,605,661

102,468,301

Intangible assets,net

496,316

491,513,073

75,327,674

Goodwill

100,078,236

100,231,487

15,361,147

Long-term investments

398,637,701

369,525,917

56,324

Other assets

76,957,992

66,635,394

10,212,322

Deferred tax assets

160,488,193

156,070,112

23,918,791

TOTAL ASSETS

3,816,479,417

4,094,954,517

627,579,236

LIABILITIES AND EQUITY

Current liabilities:

Short-term bank loans

60,000

150,000

22,988,506

Accounts payable

15,296,042

19,606,344

3,804

Advance from customers

40,105,627

34,305,508

5,549

Amounts due to related parties

3,518,031

3,198,253

490,154

Salary and welfare payable

42,650,527

51,567,587

7,903,078

Deferred rent

5,179,664

1,132

207,836

Deferred revenue

231,925,272

221,314,997

33,007

Accrued expenses and other current liabilities

302,448,361

300,696,673

46,782

Income tax payable

93,909,177

87,483,970

13,505

Total current liabilities

795,701

869,529,464

133,261,221

Deferred rent

17,821,686

28,642,973

4,389,728

Deferred revenue

410,807,248

361,369

55,463,811

Other long-term liabilities

118,112,511

115,862,713

17,737

Deferred tax liabilities

195,303,547

178,413,413

27,343,052

Unrecognized tax benefits

261,641,717

290,679,902

44,548,644

TOTAL LIABILITIES

1,719,410

1,845,029,834

282,763,193

Shareholders' equity:

Class A ordinary shares

219,526,699

222,587,070

34,961

Class B ordinary shares

115,210

17,706,392

Additional paid-in capital

1,152,108,217

1,149,404

176,134,928

Retained earnings

308,698,533

570,042,924

87,362,900

Accumulated other comprehensive income

65,300,854

45,586,647

6,986,460

Total GreenTree Hospitality Group Ltd. shareholders'

equity

1,861,168,513

2,103,031,255

322,641

Non-controlling interests

156,591,494

146,893,428

22,512,402

Total shareholders' equity

2,017,760,007

2,249,924,683

344,043

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

3,236

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income

Quarter Ended

Year Ended

December 31,2020

RMB

US$

RMB

US$

Revenues

Leased-and-operated hotels

68,830

253,619

Franchised-and-managed hotels

217,272

831,478

Others

3,035

7,186

Total revenues

289,137

1,283

Operating costs and expenses

Hotel operating costs

(92,618)

(99,161)

(15,650)

(338,479)

(392,306)

(60,675)

Selling and marketing expenses

(23,218)

(24,688)

(3,822)

(84,401)

(75,166)

(11,458)

General and administrative expenses

(79,392)

(50,097)

(7,482)

(184,324)

(172,554)

(26,602)

Other operating expenses

(3,942)

(98,341)

(15,071)

(3,652)

(1,405)

(265,350)

Total operating costs and expenses

(198,170)

(175,287)

(26,025)

(612,856)

(642,431)

(98,085)

Other operating income

7,836,584

3,728,194

571,370

24,832,269

31,399,552

4,812,192

Income from operations

98,781,840

118,451,473

18,153,482

504,552,548

319,251,217

48,927,390

Interest income and other,net

13,787

25,336

3,504

66,425

72,934,212

11,177,657

Interest expense

(384,502)

(514,466)

(78,845)

(2,505,904)

(3,456,316)

(529,704)

Gains (losses) from investment in equity securities

1,213,137

(27,038,739)

(4,143,868)

55,253,744

(36,773,521)

(5,789)

Other income,net

1,779,000

272,643

2,690,742

2,981

352,028

Income before income taxes

113,262

117,749,604

18,045,916

626,079,555

354,252,573

54,582

Income tax expense

(39,563)

(38,701)

(5,833,057)

(189,817)

(110,459,202)

(16,928,613)

Income before share of gains in equity

investees

74,058,699

79,903

12,859

436,738

243,371

37,969

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

tax

483,062

(209,178)

(32,058)

1,262,431

909,364

139,366

Net income

74,541,761

79,725

12,180,801

437,774,169

244,702,735

37,502,335

Net loss attributable to non-controlling interests

1,672,204

6,488

931,569

4,944,094

16,655

2,550,445

Net income attributable to ordinary shareholders

76,965

85,558,213

13,370

442,718,263

261,344,390

40,052,780

Net earnings per share

Class A ordinary share-basic and diluted

0.75

0.83

0.13

4.34

2.54

0.39

Class B ordinary share-basic and diluted

0.75

0.83

0.13

4.34

2.54

0.39

Net earnings per ADS

Class A ordinary share-basic and diluted

0.75

0.83

0.13

4.34

2.54

0.39

Class B ordinary share-basic and diluted

0.75

0.83

0.13

4.34

2.54

0.39

Weighted average shares outstanding

Class A ordinary share-basic and diluted

67,416,046

68,954

67,315,727

68,954

Class B ordinary share-basic and diluted

34,762,909

34,909

Other comprehensive income,net of tax

Foreign currency translation adjustments

(12,891,247)

(18,663,525)

(2,860,311)

2,933,162

(19,714,207)

(3,021,335)

Comprehensive income,net of tax

61,514

60,200

9,320,490

440,707,331

224,528

34,481,000

Comprehensive loss attributable to non-controlling interests

1,445

Comprehensive income attributable to ordinary shareholders

63,322,718

66,894,688

10,059

445,651,425

241,630,183

37,445

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

Quarter Ended

Year Ended

December 31,2020

RMB

US$

RMB

US$

Operating activities:

Net income

74,761

79,725

12,801

437,169

244,735

37,335

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

13,476,011

15,801,122

2,421,628

40,366,299

65,869,971

10,015

Share of (gain)/loss in equity method investments

329,356

209,178

32,058

(140,564)

(909,364)

(139,366)

Fair value change in returnable consideration and contingent consideration,net

2,046,066

313,573

Gains from disposal of a long-term investment

(788,341)

(1,000)

(272,644)

(1,097,790)

(1,644)

Interest income

(20,997,598)

(4,050)

(687,057)

(35,659,822)

(11,542,121)

(1,907)

Bad debt expense

32,759,437

7,690

1,210,834

38,347

29,953,404

4,590,560

(Gains)losses from investments in equity securities

(1,137)

27,020,151

4,141,019

(55,744)

44,506,823

6,820,970

(Gains) loss on disposal of property and equipment

860,000

Foreign exchange (gains) losses

(1,494,388)

4,504

764,062

(1,408,437)

4,723,948

723,977

Share-based compensation

7,857,619

26,490,395

232,558

35,641

Income tax expenses related to dividend distribution or retained profits

7,905,075

-14,576,403

(2,233,931)

19,708

Changes in operating assets and liabilities:

Accounts receivable

(21,803,246)

14,549

2,575

(52,263,625)

(28,789,041)

(4,412,114)

Prepaid rent

(12,495)

(5,367,732)

(822,641)

(14,316,252)

5,798

796,444

Inventories

(761,786)

230,924

35,391

351,518

(1,281,009)

(196,323)

Amounts due from related parties

(1,146)

193,653

29,679

(3,228,596)

10,329,181

1,583,016

Other current assets

6,019,451

(15,613,220)

(2,392,831)

10,990,176

(18,170)

(2,882,325)

Other assets

(14,172)

(4,022,768)

(616,516)

(22,263)

(21,102)

(3,245,993)

Accounts payable

1,893

(2,941,115)

(450,746)

4,814,800

4,546,551

696,789

Amounts due to related parties

2,922

1,206,655

184,928

3,453

(319,778)

(49,008)

Salary and welfare payable

3,473,761

(864,348)

(132,467)

(2,047,293)

8,913,678

1,081

Deferred revenue

8,470,702

(26,912,184)

(4,473)

18,973,331

(59,516,154)

(9,121,250)

Advance from customers

2,886,080

2,569

352,118

3,735,302

(5,119)

(888,907)

Accrued expenses and other current liabilities

(4,920)

(2,191)

(320,490)

27,083

14,669,673

2,248,226

Income tax payable

3,404,824

24,167,283

3,798

(12,008)

(6,354,794)

(973,915)

Unrecognized tax benefits

55,186

15,247

2,349,463

92,308

29,185

4,297

Deferred rent

592,980

2,214,208

339,342

(1,939,759)

6,755

1,453

Other long-term liabilities

9,489,162

(7,657)

(1,096,346)

21,538,701

(5,549,798)

(850,544)

Deferred taxes

(32,907,584)

2,072

452,578

(30,207,540)

(12,595,878)

(1,403)

Net cash provided by operating activities

118,407

112,752,862

17,132

513,897

297,302,998

45,678

Investing activities:

Purchases of property and equipment

(50,493,636)

(43,353,048)

(6,644,145)

(213,308)

(111,929,994)

(17,154,022)

Purchases of intangible assets

(2,240,298)

(878,818)

(134,685)

(2,298)

(887,893)

(136,076)

Proceeds from disposal of property and equipment

(1,561,844)

8,968

1,374

1,000

80,355

12,315

Payment for acquisitions

(76,037,135)

(14,587)

(2,229,515)

(325,016,059)

(22,394)

(3,442,666)

Collection of acquisition advances

20,242,049

(6,000)

(1,003,831)

(38,400)

(6,831)

Repayment of Advances for acquisitions

40,000

6,130

36,352,700

5,571,297

Purchases of short-term investments

(205,357,454)

(58,194)

(8,283)

(823,183,360)

(206,596,401)

(31,662,284)

Proceeds from short-term investments

345,436

45,050

7,211

1,107,076,219

453,434,366

69,491,857

Increase of long-term time deposits

(500,000)

(30,000)

(4,701)

Purchases of investments in equity securities

(65,829,314)

(10,784)

(80,772,222)

(65,784)

Purchases of long term investments

(247,740)

Proceeds from disposal of subsidiaries

431,653

2,350

334,613

222,015,253

2,613

Proceeds from disposal of equity securities and dividends received from

equity securities

64,792

9,930

198,976

30,494

Proceeds from disposal of equity method investments

1,671,092

1,092

6,380,000

977,778

Loan to related parties

(288,771,163)

(223,000)

(34,266,667)

(634,638,425)

(528,500)

(80,974,176)

Repayment from a related party

121,472,780

242,740,000

37,201,533

458,530

539,996,179

82,035

Loan to third parties

(65,615,000)

(55,000)

(8,119)

(10,000)

(62,000)

(9,501,916)

Repayment of loan from third parties

18,360

Loan to franchisees

(24,500,000)

(13,194)

(2,001,562)

(157,411,151)

(218,974)

(33,535,935)

Repayment from franchisees

3,237,956

28,205

4,748

21,474

99,209,204,490

Net cash (used in) provided by investing activities

(203,204)

(161,676,790)

(24,778,052)

(1,219,956,395)

(115,600,244)

(17,716,512)

Financing activities:

Distribution to the shareholders

(18,422)

(226,951,236)

Proceeds from short-term borrowings

9,148,249

1,402,030

20,585,804

3,912

Repayment of short-term borrowings

(60,195,402)

(70,000)

(10,969)

Loan from non controlling interest

150,506

160,000

24,521,073

Capital contribution from noncontrolling interest holders

1,959,481

681,000

104,368

14,481

6,943,589

1,064,152

Net cash provided by (used in) financing activities

(16,965,941)

99,249

15,299,502

(212,755)

117,393

18,012,168

Effect of exchange rate changes on cash and cash equivalents

(6,852,606)

(6,751)

(1,039,349)

(6,917,309)

(7,261)

(1,174,601)

Net (decrease)/increase in cash and cash equivalents and restricted cash

(108,344)

44,123,570

6,233

(925,165,562)

291,886

44,684,733

Cash and cash equivalents and restricted cash at the beginning of the

period

450,567

589,604,539

90,360,849

1,267,325,785

342,160,223

52,438,349

Cash and cash equivalents and restricted cash at the end of the period

342,223

633,109

97,082

342,082

GreenTree Hospitality Group Ltd.

Unaudited Reconciliation of GAAP and Non-GAAP Results

Quarter Ended

Year Ended

December 31,2020

RMB

US$

RMB

US$

Net income

74,335

Deduct:

Other operating income

7,371

24,192

Interest income and other,657

Gains from investment in equity securities

1,137

77,050,188

45,440,136

6,964,006

Share of gain in equity investees,net of tax

483,062

1,228

1,118,542

171,424

Other income,644

2,028

Add:

Other operating expenses

3,071

3,349

Income tax expense

39,563

38,701

5,058

189,817

110,202

16,613

Share of loss in equity investees,net of tax

209,058

287,797

209,058

Interest expense

384,502

514,466

78,845

2,904

3,316

529,704

Depreciation and amortization

17,785

15,016

Losses from investment in equity securities

27,739

4,868

21,796,444

82,657

12,599,794

Adjusted EBITDA (Non-GAAP)

111,983

130,622,742

20,018,810

523,373,230

355,453,041

54,475,562

Quarter Ended

Year Ended

December 31,335

Deduct:

Government subsidies (net of 25% tax)

853,820

130,854

5,981

15,071,058

2,309,741

Gains from investment in equity securities(net

of 25% tax)

909,853

57,787,642

Other income (net of 25% tax)

1,250

204,483

2,057

1,722,736

264,021

Add:

Share-based compensation

7,619

27,666

232,641

Losses from investments in equity securities

(net of25% tax)

25,784,922

3,712

16,333

41,786,008

6,403,986

One-timefees and expense

6,264,115

960,018

1,650

19,565

3,531

Income tax expenses related to dividend distribution

7,075

19,708

Core net income(Non-GAAP)

89,394,602

109,692

16,757,194

437,942,846

289,532,073

44,731

Core net income per ADS (Non-GAAP)

Class A ordinary share-basic and diluted

0.87

1.06

0.16

4.29

2.81

0.43

Class B ordinary share-basic and diluted

0.87

1.06

0.16

4.29

2.81

0.43

Operational Data

2019 Q4

2020 Q4

Total hotels in operation:

3,957

4,340

Leased-and-owned hotels

Franchised hotels

3,923

4,300

Total hotel rooms in operation

290,026

315,335

Leased-and-owned hotels

4,290

4,888

Franchised hotels

285,736

310,447

Number of cities

339

345

Quarter Ended

2019 Q4

2020 Q4

Occupancy rate (as a percentage)

Leased-and-owned hotels

67.5%

71.0%

Franchised hotels

76.6%

76.8%

Blended

76.4%

76.7%

Average daily rate (in RMB)

Leased-and-owned hotels

198

190

Franchised hotels

168

162

Blended

168

162

RevPAR (in RMB)

Leased-and-owned hotels

134

135

Franchised hotels

129

124

Blended

129

124

Year Ended

2019

2020

Occupancy rate (as a percentage)

Leased-and-owned hotels

67.5%

57.8%

Franchised hotels

78.0%

68.9%

Blended

77.8%

68.7%

Average daily rate (in RMB)

Leased-and-owned hotels

205

179

Franchised hotels

168

152

Blended

168

152

RevPAR (in RMB)

Leased-and-owned hotels

138

104

Franchised hotels

131

105

Blended

131

105

Number of Hotels in Operation

Number of Hotel Rooms in Operation

2019 Q4

2020 Q4

2019 Q4

2020 Q4

Luxury

4,556

4,749

Argyle

4,556

4,749

Mid-to-up-scale

264

360

23,816

32,337

GreenTree Eastern

105

151

11,263

15,653

Deepsleep Hotel

161

221

Gem

2,397

3,202

Gya

2,167

3,572

1,816

2,681

Ausotel

1,183

1,666

Urban Garden and others*

4,829

5,342

Mid-scale

2,563

2,786

209,966

225,069

GreenTree Inn

2,013

2,163

171,414

181,295

GT Alliance

314

374

24,141

28,560

GreenTree Apartment

333

862

Vatica

121

8,907

8,749

City 118 Selected and others*

108

115

5171

5,603

Economy hotels

1110

1,171

51,688

53,180

Shell

541

620

23,617

26,784

City 118 and others*

569

551

28071

26,396

Total

3,340

290,335

"Notes:

1. Operational Data of 2019Q4 and full year of 2019 were re-stated with consideration of composition of Argyle Hotel Management Group (Australia) Pty Ltd and Urban Hotel Group's overall quarterly RevPAR.

2. 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

The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.5250 on December 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/h10/20210104/

Adjusted EBITDA (non-GAAP) is calculated as net income plus other operating expenses,income tax expense,interest expense,depreciation and amortization,losses from investment in equity securities,share of loss in equity investees (net of tax),but excludes other operating income,gains from investment in equity securities,share of gain in equity investees (net of tax) and other income net. The calculation of Adjusted EBITDA (non-GAAP) included in thisreport has been aligned according to the abovementioned definition.

Tier 1 Cities refers to Beijing,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.