GreenTree Hospitality Group Ltd. Reports First Half 2022 Financial Results

Total revenues decreased by 22.3% year over year to RMB457.4 million (US$68.3 million) [1].

Adjusted EBITDA (non-GAAP) [2] decreased by 46.8% year over year to RMB93.3 million (US$13.9 million)[1].

Core net income (non-GAAP) [3] decreased by 13.7% year over year to RMB105.9 million (US$15.8 million) [1].

SHANGHAI,Dec. 28,2022 -- 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 half of 2022.

First Half2022 Operational Highlights

A total of4,669 hotels with 332,073 hotel rooms were in operation as of June 30,2022,compared to4,542 hotels and 328,773 hotel rooms as of June 30,2021.

As of June 30,the Company had67 leased-and-operated ("L&O") hotels and 4,602 franchised-and-managed ("F&M") hotels in operation in367 cities across China,compared to 63 L&O hotels and4,479 F&M hotels in operation in 358 cities as of June 30,2021. Geographic coverage increased by 2.5% year-over-year.

During the first half of 2022,the Company opened 201 hotels,a decrease of 201 compared to 402 hotels opened in the first half of 2021. Of the hotels opened in the first half of 2022,43 were in the mid-to-up-scale segment,108 in the mid-scale segment,and 50 in the economy segment. Geographically,13 hotels were in Tier 1 cities[4],52 in Tier 2 cities and the remaining 136in Tier 3 and lower cities inChina as of June30,2022.

As of June 30,the Company had a pipeline of 1,094 hotels contracted for or under development with 296 in the mid-to-up-scale segment,469 in the mid-scale segment,and 324 in the economy segment.

The average daily room rate,or ADR,for all hotels in operation was RMB153 in the first quarter of 2022,an increase of 1.6% from RMB151 in the first quarterof 2021.Such ADR was RMB147 in the second quarter of 2022,a 14.0% year-over-year decrease.

The occupancy rate,or OCC,for all hotels in operation was 60.0% in the first quarterof 2022,down from 63.4 % in the first quarterof 2021.Such OCC was 62.2% in the second quarter of 2022,compared with 78.6% in the second quarter of 2021.

The revenue per available room,or RevPAR,which is calculated by multiplying our hotels' ADR by its occupancy rate,was RMB92 in the first quarterof 2022,a 3.9% year-over-year decrease.RevPAR was RMB91 in the second quarter of 2022,a 31.9% year-over-year decrease.

As of June 30,2022 the Company's loyalty program had over 74 million individual members and approximately 1,905,000 corporate members,compared to over 69 million individual members and approximately 1,850,respectively,as of December 31,2021.

"The first half of 2022 was extremely challenging as COVID-19 outbreaks in many parts of the country resulted in lockdowns in many cities,especially in Shanghai. Nevertheless,we continued to execute our long-term strategic growth plan to deliver continued operating profitability,maintain healthy and stable cash flow,open L&O hotels in new strategic locations,and assist franchisees in maintaining quality operations,"said Mr. Alex Xu,Chairman and Chief Executive Officer of GreenTree.

Our performance in January and February,especially during Chinese New Year,was better than our industry's average,creating growing momentum in our business. However,outbreaks in the second quarter slowed down the pace of recovery throughout our industry,especially in top-tier cities such as Guangzhou and Shanghai.

As we entered summer and transportation restrictions were relaxed,RevPAR recovered. In the third quarter,it reached nearly 80% of the same period in 2019. October and November brought a fresh wave of outbreaks,slowing down our recovery once again. However,with flexible anti-pandemic measures released by the government early December,RevPAR recovered this month to more than 85% of its pre-pandemic levels.

The pandemic is evolving rapidly in China and it is unclear at this stage what impact this will have on our business in the short term as many people currently prefer to act cautiously and limit their travels. Looking into the first quarter of 2023,with Chinese New Year late January,and the months beyond,we expect that the country will gradually return to normal life. To prepare for these better days,we are helping our hotels and franchisees to devise and implement stringent measures to ensure the safety of our guests and training staff at all levels to be fully ready for the expected recovery in leisure and business travel.

As we are closing another very difficult year,I want to give a special thanks to our team,franchisees,and partners for their hard work in protecting the health of our guests and supporting each other through very challenging times.

First Half2022Financial Results

Six monthsEnded

June30,2021

June30,2022

June30,2022

RMB

RMB

US$

Revenues

Leased-and-operated hotels

172,995,482

171,272,365

25,570,291

Franchised-and-managed hotels

395,606,563

275,539,547

41,136,971

others

19,667,293

10,564,787

1,577,281

Total revenues

588,269,338

457,376,699

68,284,543

Total revenuesfor the first half of 2022were RMB457.4million (US$68.3 million)[1],a 22.3% year-over-year decrease. The decrease was primarily due tothe impact of COVID-19,which resulted in lower RevPAR at L&O hotels and F&M hotels. Compared with the first halfof 2019,before the COVID-19 outbreak,total revenues for the first half of 2022decreased by 10.4%.

Total revenues from leased-and-operated hotelsfor the first half of 2022were RMB171.3million (US$25.6million)[1],a 1.0% year-over-year decrease. The decrease was primarily due to a 22.6% year-over-yeardecrease in L&O hotels' second quarter RevPAR and was partially offset bya 10.3% year-over-yearincrease in L&O hotels' first quarter RevPARand the increased number of newly opened L&O hotels.

Total revenues from franchised-and-managed hotelsfor the first halfof 2022were RMB275.5million (US$41.1million)[1],a 30.4% year-over-year decrease. Initial franchise fees for the first halfof 2022decreased 33.6% year-over-year,mainly because of the decrease in the gross opening number ofF&M hotels. Recurring franchisee management fees and others for the first halfof 2022decreased by 30.0% year-over-year,primarily due to a 4.3% decrease in F&M hotels' RevPARfor 2022 Q1 and a 32.4% decrease in F&M hotels' RevPARfor 2022 Q2 due to the impact of COVID-19and the fee waivers to franchisees of quarantined hotels and hotels whose RevPAR was severely affected by the pandemic.

Six MonthsEnded

June30,2022

RMB

RMB

US$

Initial franchise fee

37,592,607

24,955,708

3,725,789

Recurring franchise management fee and others

358,013,956

250,583,839

37,411,182

Revenues from franchised-and-managed hotels

395,563

275,547

41,971

Total operating costs and expenses

Six MonthsEnded

June30,2022

RMB

RMB

US$

Operating costs and expenses

Hotel operating costs

286,300

307,750,028

45,945,869

Selling and marketing expenses

39,821,421

18,852,606

2,814,620

General and administrative expenses

127,001,827

99,724,402

14,888,461

Other operating expenses

4,146,290

2,048,734

305,868

Other general expenses

-

490,619,710

73,247,594

Total operating costs and expenses

457,636,838

918,480

137,202,412

Hotel operating costsfor the first half of 2022were RMB307.8 million (US$45.9million)[1],a 7.4% year-over-year increase. The increase was mainly attributable to the opening of34 L&O hotels since the beginning of 2021,which resulted in higher rents,higher utilities,higher staff headcount and compensation expenses,higher depreciation and amortization.Excluding the impact from newly opened L&O hotels since2021,hotel operating costs for the first halfof 2022 decreased 14.1%.

Six MonthsEnded

June30,

June30,

2021

2022

2022

RMB

RMB

US$

Rental

103,794,352

107,078,975

15,986,470

Utilities

12,203,535

13,659,704

2,039,340

Personnel cost

31,071,099

41,703,184

6,226,121

Depreciation and amortization

33,683,464

52,000,772

7,763,511

Consumable,food and beverage

31,726,274

24,266,539

3,622,899

Costs of general managers of franchised-and-

managed hotels

55,395,961

56,294,805

8,404,593

Other costs of franchised-and-managed hotels

12,448,949

7,163,562

1,069,492

Others

6,343,666

5,582,487

833,443

Hotel Operating Costs

286,300

307,028

45,869

Selling and marketing expensesfor the first half of 2022were RMB18.9million (US$2.8million)[1],a 52.7% year-over-year decrease. The decrease was mainly attributable to lower advertising expensesand staff related expenses,due to less employee business travels in the pandemic.

General and administrative expensesfor the first half of 2022 were RMB99.7 million (US$14.9 million)[1],a 21.5% year-over-year decrease. The decrease was mainly attributable to the reduction of travel expenses and consulting fees.

Other general expenses were RMB490.6 million (US$73.2million)[1]in the first half of 2022,which included one-time impairment charges for Argyle and Urban as mentioned earlier. After certain assessment,GreenTree's board of directors concluded that the Company would deconsolidate Argyle starting from June,2022. As for Urban,GreenTree has sold its equity interest and will deconsolidate Urban in the fourth quarter. In addition to the one-time impairments,we also took a provision for other assets related to two properties. In the first quarter of 2021,we signed Lease Contracts and Purchase Intention Contracts with Shanghai HongYuan Shengshi for two properties located in the Hongqiao Business Center,where we planned to develop flagship L&O hotels and the company's new headquarters. However,because of the financial crisis of Evergrande,one of its shareholders,neither property had been delivered on time as contracted as of June 30,2022. Therefore,we decided to take a full provision at this time out of an abundance of caution.

Gross profit for the first half of 2022 was RMB149.6million (US$22.3million)[1],a year-over-year decrease of 50.4%. Gross margin for the first half of 2022 was 32.7%,compared to 51.3% a year ago. The decrease was primarily due to the operating loss recorded by newly opened L&O hotels and lower revenue caused by Covid-19.

Incomefrom operationsfor the first half of 2022was RMB-457.7 million (US$-68.3million)[1],a year-over-year decrease of 403.7%,with a margin of -100.1%. Excluding other general expenses,income from operation from purely operating activities was RMB 32.9 million,with a margin of 7.2%.

Net income for the first half of 2022 was RMB-360.9 million (US$-53.9million)[1],compared to RMB146.3 million in the first half of 2021 and net margin was -78.9%. The year-over-year decrease was mainly attributable to other general expenses. Excluding these,net income was 68.3 million RMB,with a margin of 14.9%.

Adjusted EBITDA (non-GAAP)[2]for the first half of 2022 was RMB93.3 million (US$13.9 million)[1],a year-over-year decrease of 46.8%. Adjusted EBITDA margin,defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues,for the first half of 2022 was 20.4%,compared to 29.8% a year ago.The decrease was mainly attributable to the increased number of L&O hotels—both newly opened and in the pipeline. Excluding the impact of newly opened and pipeline hotels,adjusted EBITDA (non-GAAP) for the first half of 2022 was RMB139.3 million,with a margin of 34.9%.

Core net income (non-GAAP)for the first half of 2022 was RMB105.9 million (US$15.8 million)[1],a year-over-year decrease of 13.7%. The core net margin,defined as core net income (non-GAAP) as a percentage of total revenues,for the first half of 2022 was 23.2%,compared to 20.9% one year ago. Excluding the impact of newly opened hotels,corenetincome (non-GAAP) was RMB163.9 million,with a margin of 41.1%.

Earnings per ADS (basic and diluted)for the first halfof 2022 were RMB-3.18(US$-0.47)[1],downfrom RMB1.47one year ago.Core net income per ADS (basic and diluted) (non-GAAP) for the first halfof 2022 was RMB1.03(US$0.15)[1],down from RMB1.19a year ago.

Cash flowOperating cash inflow for the first halfof 2022was RMB 130.7 million (US$19.5million)[1]as a result of income from operations. Investing cash inflow for the first half of 2022was RMB322.6 million (US$48.2 million)[1],which was primarily attributable to proceeds from short-term investments and proceeds from the disposal of security equities. The investing cash inflow was partially offset by a loan to an affiliated food and restaurant business which is to be merged with the Company in January 2023. Financing cash outflow for the first half of 2022 was RMB181.6 million (US$27.1 million)[1],mainly attributable tothe repayment of bank loans by the end of the June 30,2022.

Cash and cash equivalents,restricted cash,short-term investments,investments in equity securities and time deposit.As of June 30,the Company had total cash and cash equivalents,short term investments,investments in equity securities and time deposits of RMB1,079.5 million (US$161.17 million) [1],compared to RMB1,235.9 million as of December 31,2021. The decrease from the end of 2021 was primarily attributable to the repayment of bank loans and a loan to an affiliated food and restaurant business which is to be merged with the Company in January 2023,offset by cash from operating activities.

Key Q3 2022 Operational Highlights

A total of4,763 hotels with 337,111 hotel rooms were in operation as of September 30,2022.

As of September 30,the Company had69 leased-and-operated ("L&O") hotels and 4,694 franchised-and-managed ("F&M") hotels in operation in 370 cities across China.

During the third quarter of 2022,the Company opened 104 hotels.

As of September 30,129 hotels contracted for or under development.

ADR,for all hotels in operation was RMB168.

OCC,for all hotels in operation was 71.1%.

RevPAR was RMB120.

Update on the Food and Restaurant Acquisition

Since the announcement of the signing of the SPA in May 2022,the Company has been working on the closing of the Food and Restaurant Acquisition transaction. However,due to resurgences of COVID-19,it experienced significant delays in the delivery of various documents tovariousagencies. While China removed many COVID-related restrictions in December and the Company is speeding up the closing process,it expects the formal closing will be completed in January 2023,a bit later than originally planned. The Company will inform the market when the transaction formally closes.

Guidance

Given the large number of Covid outbreaks in many parts of China throughout 2022,business did not improve as we initially expected,until the easing of restrictions early December. Consequently,we have adjusted our revenue guidance for the full year of 2022 to 81%-84% of the 2021 levels.

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

Conference Call

GreenTree's management will hold an earnings conference call at 8:00 PM U.S. Eastern Time on December27,(9:00 AM Beijing/Hong Kong Time onDecember 28,2022).

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 conference call will be available after the conclusion of the live conference call until January 3,2023.

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:

5371493

Additionally,a live and archived webcast of this conference call will be available athttp://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 31,2021,GreenTree had a total number of4,659 hotels. In 2021,HOTELS magazine ranked GreenTree Top11 Ranking among 225 largest global hotel groups in terms of number of hotels in its annual HOTELS' 225. GreenTree was also the fourth largest hospitality company in China in 2021based on the statistics issued by the China Hospitality Association.

GreenTree has a broad portfolio of diverse brands spanning from the economy to mid-scale,and up-scale segments of the hospitality industry mainly in China. 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 diverse brand portfolio that features comfort,style and value.

For more information on GreenTree,please visithttp://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

December31,

June 30,

June 30,

2021

2022

2022

RMB

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

298,428,709

574,005,663

85,696,789

Restricted cash

3,300,000

-

-

Short-term investments

557,458,675

246,841,572

36,476

Investments in equity securities

157,988,851

70,918,733

10,587,888

Accounts receivable,net of allowance

95,589,936

113,214,510

16,902,481

Amounts due from related parties

310,419,860

433,819,663

64,767,570

Prepaid rent

15,454,967

10,900,885

1,627,459

Inventories

2,297,584

2,103,699

314,074

Other current assets

142,737,163

98,889,940

14,880

Loans receivable,net

247,530,580

216,342,526

32,299,089

Total current assets

1,831,206,325

1,037,191

263,811,706

Non-current assets:

Restricted cash

18,869,900

18,900

2,817,202

Long-term time deposits

160,000

130,000

19,408,489

Loans receivable,net

290,967,680

192,016,112

28,251

Property and equipment,net

1,045,356,265

976,142,618

145,734,256

Intangible assets,net

520,117,479

272,970,807

40,753,468

Goodwill

120,948

29,468

4,416,695

Long-term investments

188,790,785

229,377,915

34,245,221

Other assets

329,366,340

128,198,175

19,139,485

Deferred tax assets

161,565,839

213,786,784

31,917,526

TOTAL ASSETS

4,060,561

3,957,982,970

590,911,299

LIABILITIES AND EQUITY

Current liabilities:

Short-term bank loans

356,000

254,800,000

38,040,639

Long-term bank loans,current portion

50,200,000

141,000

21,185,112

Accounts payable

24,036,544

21,212,226

3,166,902

Advance from customers

39,773,738

27,111,499

4,047,640

Amounts due to related parties

9,627

10,455,346

1,560,942

Salary and welfare payable

60,154,565

63,897,463

9,640

Deferred rent

1,926,957

2,127,896

317,687

Deferred revenue

215,147,975

196,743,088

29,372,970

Accrued expenses and other current liabilities

381,282,062

413,506,904

61,954

Income tax payable

70,366

20,730,866

3,095,037

Dividends payable

40,999,458

-

-

Total current liabilities

1,249,949,292

1,152,485,288

172,061,523

Long-term loans,non-current portion

301,000

170,000

25,380,332

Deferred rent

68,842,692

79,948,490

11,935,995

Deferred revenue

314,472,488

264,055,000

39,422,374

Other long-term liabilities

132,046,925

125,722,275

18,769,842

Deferred tax liabilities

228,201,745

166,657,718

24,881,342

Unrecognized tax benefits

328,820,281

366,130

54,674,031

TOTAL LIABILITIES

2,624,133,423

2,325,080,901

347,125,439

Shareholders' equity:

Class A ordinary shares

222,070

222,070

33,231,375

Class B ordinary shares

115,534,210

115,210

17,248,803

Additional paid-in capital

1,151,384,306

1,655,445

171,937,631

Retained earnings (Accumulated losses)

326,298,618

(1,332,875)

(198,993)

Accumulated other comprehensive income

41,880,907

32,150,906

4,004

Total GreenTree Hospitality Group Ltd. shareholders' equity

1,857,685,111

1,520,594,756

227,018,820

Non-controlling interests

185,242,027

112,307,313

16,040

Total shareholders' equity

2,042,927,138

1,632,069

243,785,860

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

4,299

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income

Six MonthsEnded

June30,971

Others

19,543

Operating costs and expenses

Hotel operating costs

(286,300)

(307,028)

(45,869)

Selling and marketing expenses

(39,421)

(18,606)

(2,620)

General and administrative expenses

(127,827)

(99,402)

(14,461)

Other operating expenses

(4,290)

(2,734)

(305,868)

Other general expenses

-

(490,710)

(73,594)

Total operating costs and expenses

(457,838)

(918,480)

(137,412)

Other operating income

20,053,589

3,398

584,852

Income (loss)from operations

150,686,089

(457,701,383)

(68,333,017)

Interest income and other,net

29,647

23,138

3,542,816

Interest expense

(7,477,925)

(15,178,612)

(2,107)

Gains from investment in equity securities

43,873,336

21,687,584

3,237,871

Other income,net

-

14,664,617

2,189,370

Income (loss) before income taxes

216,364,147

(412,797,656)

(61,629,067)

Income tax (expense) benefits

(70,794)

51,695

7,733,640

Income (loss) before share of gains in equity investees

145,824,353

(360,996,961)

(53,895,427)

Share of gains in equity investees,net of tax

463,897

75,125

11,216

Net income (loss)

146,288,250

(360,921,836)

(53,884,211)

Net loss attributable to non-controlling interests

4,939,732

33,290,344

4,117

Net income (loss) attributable to ordinary shareholders

151,227,982

(327,631,492)

(48,914,094)

Net earnings (losses) per share

Class A ordinary share-basic and diluted

1.47

(3.18)

(0.47)

Class B ordinary share-basic and diluted

1.47

(3.18)

(0.47)

Net earnings (losses) per ADS

Class A ordinary share-basic and diluted

1.47

(3.18)

(0.47)

Class B ordinary share-basic and diluted

1.47

(3.18)

(0.47)

Weighted average shares outstanding

Class A ordinary share-basic and diluted

68,286,954

68,954

Class B ordinary share-basic and diluted

34,762,909

34,909

Other comprehensive income (loss),net of tax

Foreign currency translation adjustments

(1,373,712)

(9,001)

(1,452,651)

Comprehensive income (loss),net of tax

144,538

(370,651,837)

(55,336,862)

Comprehensive loss/(income) attributable to non-controlling interests

4,117

Comprehensive income (loss) attributable to ordinary shareholders

149,854,270

(337,361,493)

(50,745)

GreenTree Hospitality Group Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

Six MonthsEnded

June30,2021

June 30,2022

June 30,2022

RMB

RMB

US$

Operating activities:

Net income (loss)

146,250

(360,836)

(53,211)

Adjustments to reconcile net income to

net cash provided by operating

activities:

Depreciation and amortization

40,437,845

62,246,827

9,293,207

Share of gains in equity method investments

(463,897)

(75,125)

(11,216)

Fair value change in returnable

consideration and contingent

consideration,net

(502,712)

-

-

Impairment of long-lived assets

-

56,849

8,392,357

Impairment of goodwill

-

91,236,480

13,621,248

Losses from disposal of a subsidiary

-

13,944,925

2,081,922

Interest income

(3,855,030)

(262,334)

(39,165)

Bad debt expense

20,461,144

340,489,881

50,833,801

Gains from investments in equity securities

(43,336)

(21,584)

(3,871)

Losses on disposal of property and

equipment

-

2,566,292

383,137

Foreign exchange losses(gains)

2,507,642

(11,782,147)

Share-based compensation

1,865

271,139

40,480

Changes in operating assets and liabilities:

Accounts receivable

(32,846,596)

(29,431,182)

(4,393,960)

Prepaid rent

(14,196,968)

4,554,082

679,907

Inventories

1,680,444

(75,498)

(11,272)

Amounts due from related parties

(3,538)

(2,920)

(425,930)

Other current assets

(123,719,995)

10,112,055

1,509,690

Other assets

(7,784,920)

6,868,854

1,025,493

Accounts payable

(1,514,213)

455,144

67,951

Amounts due to related parties

2,157,658

924,719

138,057

Salary and welfare payable

5,370

4,762

684,935

Deferred revenue

(24,226)

(47,014,645)

(7,019,102)

Advance from customers

(6,444,631)

(11,437)

(1,119)

Accrued expenses and other current

liabilities

52,388,512

84,240,136

12,576,721

Income tax payable

(36,356)

(51,123)

(7,697,724)

Unrecognized tax benefits

21,399,858

37,391,849

5,456

Deferred rent

15,403,018

14,340,487

2,140,978

Other long-term liabilities

14,233,448

(6,650)

(989,034)

Deferred taxes

18,689,560

(56,972)

(8,381,477)

Net cash provided by operating activities

42,903,196

130,714,174

19,515,112

Investing activities:

Purchases of property and equipment

(157,825)

(28,834,339)

(4,304,853)

Purchases of intangible assets

-

(60,215)

(8,990)

Payments for acquisition of minority equity

(868,388)

-

-

Acquisitions,net of cash received

(173,128,625)

-

-

Collection of acquisition advances

10,148,000

-

-

Advances for purchases of property and equipment

(204,383)

-

-

Purchases of short-term investments

(138,310)

(48,860,000)

(7,606)

Proceeds from short-term investments

356,735,030

389,739,437

58,186,566

Proceeds from sales of long-term time

deposits

50,000

-

-

Increase of long-term time deposits

(130,000)

-

-

Proceeds from disposal of equity securities

and dividends received from equity

securities

211,112

116,555,911

17,401,339

Loans to related parties

(231,745,560)

(165,320,000)

(24,681,626)

Repayment from related parties

148,665,500

45,607,667

6,809,045

Loans to third parties

(10,500,000)

(266,200)

(39,743)

Repayment from third parties

46,000

1,638,833

244,671

Loan to franchisees

(460,435,294)

(35,281,960)

(5,267,458)

Repayment from franchisees

183,199

47,868

7,118,567

Net cash (used in) provided by investing activities

(500,712,544)

322,600,002

48,162,912

Financing activities:

Distribution to the shareholders

-

(40,458)

(6,121,058)

Loan from non-controlling interest

2,792,853

300,000

44,789

Repayment of bank loans

-

(156,100,000)

(23,305,116)

Proceeds from bank loans

140,000

14,000

2,209,582

Capital contribution from non-controlling

interest holders

7,031,000

400,000

59,718

Net cash provided by (used in)

financing activities

149,823,853

(181,599,458)

(27,085)

Effect of exchange rate changes on cash and cash

equivalents and restricted cash

(1,088)

562,236

83,940

Net (decrease) increase in cash and

cash equivalents and restricted cash

(309,583)

272,276,954

40,649,879

Cash and cash equivalents and restricted

cash at the beginning of the period

633,728,109

320,598,609

47,864,112

Cash and cash equivalents and

restricted cash at the end of the period

324,347,526

592,875,563

88,513,991

GreenTree Hospitality Group Ltd.

Unaudited Reconciliation of GAAP and Non-GAAP Results

Six Months Ended

June 30,2021

June 30,2022

June 30,2022

RMB

RMB

US$

Net income (loss)

146,211)

Deduct:

Other operating income

20,852

Interest income and other,816

Gains from investment in equity

securities

43,871

Share of gain in equity investees,net of

tax

463,216

Other income,370

Add:

Other operating expenses

4,594

Income tax expenses (benefits)

70,794

(51,695)

(7,640)

Interest expenses

7,925

15,612

2,107

Depreciation and amortization

40,207

Adjusted EBITDA (Non-GAAP)

175,216,635

93,296,490

13,928,800

Six Months Ended

June 30,211)

Deduct:

Government subsidies (net of 25% tax)

11,134,872

1,251,065

186,779

Gains from investment in equity

securities (net of 25% tax)

32,002

16,265,688

2,403

Other income (net of 25% tax)

-

10,998,463

1,642,027

Add:

Share-based compensation

1,480

One-time fees and expenses

14,707,304

4,467,926

667,044

Impairment charges and provisions for

other assets

4,523,574

490,594

Core net income (Non-GAAP)

122,787,119

105,723

15,813,698

Core net income per ADS (Non-GAAP)

Class A ordinary share-basic and

diluted

1.19

1.03

0.15

Class B ordinary share-basic and

diluted

1.19

1.03

0.15

Operational Data

June 30,2021

June 30,2022

Total hotels in operation:

4,542

4,669

Leased and owned hotels

63

67

Franchised hotels

4,479

4,602

Total hotel rooms in operation

328,773

332,073

Leased and owned hotels

7,229

6,986

Franchised hotels

321,544

325,087

Number of cities

358

367

Quarter Ended

2021Q1

2022Q1

Occupancy rate (as a percentage)

Leased-and-owned hotels

51.7%

52.6%

Franchised hotels

63.7%

60.2%

Blended

63.4%

60.0%

Average daily rate (in RMB)

Leased-and-owned hotels

184

199

Franchised hotels

150

152

Blended

151

153

RevPAR (in RMB)

Leased-and-owned hotels

95

105

Franchised hotels

96

91

Blended

96

92

Quarter Ended

2021Q2

2022Q2

Occupancy rate (as a percentage)

Leased-and-owned hotels

72.9%

57.1%

Franchised hotels

78.8%

62.3%

Blended

78.6%

62.2%

Average daily rate (in RMB)

Leased-and-owned hotels

219

217

Franchised hotels

169

145

Blended

171

147

RevPAR (in RMB)

Leased-and-owned hotels

160

124

Franchised hotels

133

90

Blended

134

91

Number of Hotels in Operation

Number of Hotel Rooms in

Operation

June 30,2021

June 30,2022

June 30,2022

Luxury

28

-

5,821

-

Argyle

28

-

5,821

-

Mid-to-up-scale

423

528

38,704

47,347

GreenTree Eastern

170

201

18,155

22,402

Deepsleep Hotel

5

7

356

467

Gem

39

52

3,605

4,728

Gya

50

66

4,212

5,639

Vx

52

81

4,520

7,069

Ausotel

14

-

1,877

-

Urban Garden and others

93

121

5,979

7,042

Mid-scale

2,917

2,999

231,105

233,950

GreenTree Inn

2,158

2,183

179,790

180,255

GT Alliance

508

521

35,937

37,545

GreenTree Apartment

15

19

1,058

1,260

Vatica

115

110

8,386

7,969

City 118 Selected and others

121

166

5,934

6,921

Economy hotels

1,174

1,142

53,143

50,776

Shell

617

648

26,714

28,030

City 118 and others

557

494

26,429

22,746

Total

4,669

328,073

For more information,please contact:

GreenTree

Ms. Selina Yang

Phone: +86-158-2166-6251

E-mail:ir@998.com

Mr. Allen Wang

Phone: +86-181-0184-0639

E-mail:ir@998.com

Christensen

In Shanghai

Mr. Jerry Xu

Phone: +86-138-1680-0706

E-mail: jxu@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

[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.6981 on June30,2022as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20220103/

[2] Adjusted EBITDA (non-GAAP) is calculated as net income plus other operating expenses,other general expenses,income tax expense,net of tax,interest expense,depreciation and amortization,losses from investment in equity securities and the provision for bad debts,but excludes other operating income,interest income and other,net,gains from investment in equity securities,share of gains in equity investees (net of tax),and other income,net. The calculation of Adjusted EBITDA (non-GAAP) included in this report has been aligned according to the abovementioned definition.

[3] Core net income is calculated as net income plus share-based compensation,losses from investments in equity securities (net of 25% tax),one-time fees and expense and impairment charges and provisions for other assets but excludes government subsidies (net of 25% tax),gains from investment in equity securities (net of 25% tax),and other income (net of 25% tax).

[4] 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.

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