NASDAQ:HTHT H World Group Q4 2023 Earnings Report $35.65 +1.22 (+3.54%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$35.64 -0.02 (-0.04%) As of 05/2/2025 07:27 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast H World Group EPS ResultsActual EPS$0.33Consensus EPS $0.31Beat/MissBeat by +$0.02One Year Ago EPSN/AH World Group Revenue ResultsActual Revenue$786.00 millionExpected Revenue$759.99 millionBeat/MissBeat by +$26.01 millionYoY Revenue GrowthN/AH World Group Announcement DetailsQuarterQ4 2023Date3/20/2024TimeN/AConference Call DateWednesday, March 20, 2024Conference Call Time9:00PM ETUpcoming EarningsH World Group's Q1 2025 earnings is scheduled for Friday, May 16, 2025, with a conference call scheduled on Sunday, May 18, 2025 at 9:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (20-F)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by H World Group Q4 2023 Earnings Call TranscriptProvided by QuartrMarch 20, 2024 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Good day, and thank you for standing by. Welcome to H. Wirth First Quarter and Full Year 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. Operator00:00:38It is now my pleasure to hand you over to Ateworld Senior IR Director, Mr. Jason Chen. Please go ahead. Speaker 100:00:48Thank you. Good morning and good evening everyone. Thanks for joining us today. Welcome to Edgewood Group 2023 4th quarter and full year earnings conference call. Joining us today is our Chairman, Mr. Speaker 100:01:05Ji Qi our CEO, Mr. Jinhui and our CFO, Mr. Zou Jun. Following their prepared remarks, management will be available to answer your questions. Before we continue, please note that the discussion today will include forward looking statements made under the Safe Harbor provision of the United States Private Securities Litigation Reform Act of 1995. Speaker 100:01:32Forward looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. Edgewood Group does not undertake any obligations to update any forward looking statements, except as required under applicable laws. On the call today, we will also mention adjusted financial measures during the discussion of our performance. Speaker 100:02:06Reconciliations of those measures to comparable GAAP information can be found in our earnings release that was distributed yesterday. As a reminder, this conference call is being recorded. The webcast of this conference call as well as supplementary slide presentation is available at ir. Edgewood.com. With that, now I will hand over the call to our COO, Mr. Speaker 100:02:32Jin Hui to discuss our business performance in 2023. Mr. Jin, please. In 2023, the domestic traveling industry experienced strong momentum of recovery. Along with the robust rebound of the industry, Ashworth continued implementing our sustainable high quality growth strategy and achieved great results. Speaker 100:03:45First of all, let's take a look at our achievements in 2023. Please turn to Page 3. Thanks to the strong leisure demand and the gradual recovery of business demand post the pandemic, In 2023, our China business achieved a robust recovery with RevPAR recovered to 122% of the 2019 level for the whole year. Entering into 2024, we still see our RevPAR performing steadily so far. Our hotel network continued to expand. Speaker 100:05:16Please turn to page 4. Excluding the economic software brand, we opened a total of 16 41 hotels in 2023, reached a record high in terms of annual opening number. At the same time, we closed 789 hotels in 2023. However, excluding the low quality economic softer brand and Hanqing 1.0 version, the closure were only 273 hotels, a slight increase from 237 in 20 22. The high closure number in 2023 demonstrated our determination to remove or upgrade low quality hotels in an accelerated manner, which is in line with our sustainable quality growth strategy. Speaker 100:06:08In terms of our pipeline, by the end of 2023, our hotels in pipeline reached 3,061, another record high. The limited service segment remains our key strategic focus. Our economic and middle scale products, which target the mass market, are the key drivers of our network expansions. Breaking down our hotels in operation, hotels in pipeline and hotel opening in 2023, the proportion of economic and the middle scale hotel were 92%, 85% and 90%, respectively. Edward has set a specific brand strategy named Iron Triangle to develop the economic and the middle skill segments. Speaker 100:08:20The Iron Triangle strategy consists of our 3 key brands namely Hanjin, B Hotel and Orange. In 2023, we have upgraded products for all these 3 brands. Please turn to Page 6. Firstly, our HanTing products were being constantly upgraded. The proportion of HanTing 1.0 version was significantly declined from 28.5% as of 2020 to only 4.4% as of 2023, while the proportion of HanTing 2.7 and above version steadily increased from only 34.4% as of 2020 to 71.2% as of 2023. Speaker 100:09:09As the 1st flagship brand with the longest history within the group, Hanjin has maintained its market competitiveness and attractiveness to customers and the franchisees through continuous product innovation and upgrades. Please turn to Page 7. We launched the newest version 5.0 for JI Hotel at the end of last year. The new version further elaborates lifestyle of oriental aesthetic and shows confidence in distinctive Chinese style service. Starting from the stage of design, JI Hotel 5.0's version implements the concept of sustainable development such as adopting prefabricated design, intelligent lighting system and environmentally friendly construction system. Speaker 100:10:36These implementations could largely help reducing environmental pollution and energy consumption. Additionally, we also explored some new business models in the public area or lobby area of JI Hotel 5.0 version. We introduced an innovative tea space or tea house in JI Hotels' public area and also further strengthening the Keqing products, which is the scenario based retail business. Lastly, our Orange brand. We launched low half version in 2023. Speaker 100:11:29Please turn to Page 8. After only 1 year post its official launch, OrangeLohu's version has already gained tremendous popularity in the market. As of 2023, the low cost products accounted for 58% of the total pipeline of Orange brand. Edgeward continued to expand geographic coverage of our hotel network. Please turn to Page 9. Speaker 100:12:40We kept on penetrating in lower tier cities in China. As of 2023, around 40 percent of hotels in operation were located in Tier 3 and 4 and below cities, representing a 2 percentage point increase compared to 2022. At the same time, 55% of hotels in pipeline were located in lower tier cities. Also, the percentage number were lower compared to 2022, its absolute number were higher. As of 2023, the number of city coverage was 1257, added 131 new cities penetration compared to 2022. Speaker 100:14:03In addition, our capabilities of localized development and operation in the previously less penetrated or weak areas in China has been improving significantly, and we achieved initial results post our organizational restructuring by establishing regional headquarters. Please turn to Page 10. In the South, West and Central China, the total new signings in 2023 increased more than 100%, 80% and 40% year over year, respectively, and increased more than 200%, 130% and 110% compared to the pre COVID year of 2019, respectively. Please turn to Page 11. Our upper midscale segment development is continuously progressing. Speaker 100:15:44As of the Q4 of 2023, there were 645 upper midscale hotels in operation, representing 23% year over year increase and 7% quarter over quarter increase. And there were 386 of upper midscale hotels in pipeline, representing a 34% year over year increase and an 8% increase on a sequential basis. Combining the Hotel Xin operations and Hotel Xin pipelines together, the total number of our upper mid hotels reached 1031 in 2023. We are very glad that we had achieved our target, which was set in the Q2 of 2021. However, it is still far from enough. Speaker 100:16:38We will continue to strengthen our footprint in the upper mid scale segment, mainly through our core brands and strive to become a leading brand in the market in the foreseeable future. Please turn to Page 12. Being one of our core brands in the upper midscale segment, Intercity Brands launched its new products in 2022 The number of its pipeline hotels has quickly increased to 53 at year end, demonstrating the high market recognition and acceptance of the brand and the products. Turning to page 13, at the same time, the Crystal Orange gained a good momentum of new signings as well. By the end of 2023, the number of hotels in the pipeline reached 119, which doubled from the beginning of 2023. Speaker 100:18:38Lastly, let's review our performance in regards to the membership and the central reservation system. Please turn to page 14. The total number of members continued to increase to 228,000,000 in 2023 and has ranked number 1 worldwide. Direct bookings through our central reservation systems was 62.6% in 2023, representing a 9 percentage point increase on a year over year basis. All in all, we continued to reinforce our membership program and the central reservation system. Speaker 100:20:48After discussing our achievements in 2023, let's now go through our key strategic forecast in 2024. Please turn to page 15. Service excellence centric sustainable growth, quality growth will be the strategic focus of Lexi Huazhu in 2024. This strategic focus is divided into 3 major areas. Firstly, high quality hotel network expansion. Speaker 100:21:17In the limited service segment, we will continuously expand our footprint nationwide by executing our Irown Triangle strategy with focus on less penetrated areas and the lower tier cities. In the upper middle segment or selected service segment, we will consistently implement our multi brand strategy to further strengthen our presence. Secondly, customer centric product upgrades and service excellence. In terms of product quality, we will continue to upgrade old hotels and introduce new products for each brand to meet our customers' diversified needs. In terms of service quality, 2024 marks the beginning of an year of service excellence for Edgeworth. Speaker 100:22:11It means that we are going to put more emphasis on service, which provided to both our customers and franchisees to continuously enhance their experiences and satisfaction. Lastly, the digitalized based organizational capability enhancement. Continued improvement on both products and service quality would be difficult in the absence of strong support from a strong organizational and digitalization capability. We are going to further enhance our management capability and operational efficiency in the areas such as supply chain optimization, integrated marketing program, talent reserve, organizational capability and so on, through a comprehensive digitalization process. By doing so, it could help us to establish a solid foundation to support our business development in a rapid and sustainable manner. Speaker 100:23:36Please turn to Page 16. In terms of our overseas business, there are 4 major strategic focus. Firstly, transforming to asset light model secondly, continuously focusing on cost reduction and profitability improvement thirdly, further strengthening direct sales via edge rewards global loyalty program and lastly, looking for the APAC and the Middle East growth opportunity. All above our 2023 review and 2024 strategic focus discussions. Now I will hand over the call to our CFO, Mr. Speaker 100:24:33Zhou Jun, to discuss our 2023 Q4 and full year operational and financial reviews. Mr. Zhou, please. Speaker 200:24:41Thank you, Jing Fei. Good morning and good evening to everyone. Let's go through our operational and financial review for the Q4 and full year of 2023. Please now turn to Page 18. In 2023, we continue to expand our hotel network. Speaker 200:24:57Our overall number of rooms increased 13% year over year to over 912,000 rooms by the end of 2023 compared to over 809,000 rooms as of end of the last year. Our hotel turnover for the full year of 2023 was RMB 80,400,000,000, representing a 62% increase compared to 2022. Excluding the age, Lexi Huazhu's hotel turnover grew 66% year over year to RMB73.3 billion. Now let's turn to Page 19. Since China lifted a travel restriction in late 2022, we saw a strong rebound in leisure travel and a gradual recovery in business travel throughout 2023. Speaker 200:25:48The landed RevPAR for Lexi Huazhu reached RMB242, representing a recovery of 122% compared to the 2019 level and a year over year increase of 54%. The robust RevPAR growth was primarily driven by ADR, which raised 27% to RMB299 in 2023, which was mainly due to our product mix change as well as continued product upgrade over the last few years. Occupancy rate also improved throughout the year to 81% for the full year of 2023. Now Page 20. For the edge business, full year 2023 blended RevPAR grew 14.5% year over year to EUR 0.71, which was driven by 1% increase in ADR and a 7% increase in occupancy rate to 63% OCC. Speaker 200:26:47Now please turn to Page 21. In 4Q 2023, our total revenue for the group increased 51% year over year to RMB 5,600,000,000, exceeding our previous guidance of 41% to 45% year over year growth. For the full year of 2023, our group revenue increased 58% year over year to RMB 21,900,000,000, of which Lexi Huazhu achieved 64% year over year revenue growth to RMB 17,400,000,000 and the DH grew 39% year over year to RMB 4,400,000,000. The revenue growth of Legacy Huazhu was driven by the strong travel demand in China as well as our continued product grade and the market penetration throughout the regional offices. For DH, its revenue growth was attributable to the market recovery on network expansion as well as favorable exchange rate. Speaker 200:27:50Now please turn to Page 22. Hotel operating costs were RMB 4,000,000,000 in the Q4 of 2023 and RMB 14,300,000,000 for the full year of 2023. The year over year increase was primarily due to our business recovery and the Q o Q increase in the 4th quarter was mainly due to RMB 200,000,000 impairment loss on the legacy Huazhu level as well as RMB 162,000,000 impairment from Legacy DH. The increase of our hotel operating costs was slower than our revenue growth, reflecting operating leverage of the business. Now preopening expenses reduced meaningfully as we continue to execute our asset light strategy and become more selective on opening leased and owned hotels. Speaker 200:28:46SG and A expenses were RMB 917,000,000 in the Q4 of 2023 and RMB 3,200,000,000 for the full year of 2023. The year over year increase in SG and A were mainly due to increased personnel costs, OTA commissions and promotional expenses along with business recovery. Overall, we achieved operating leverage and delivered income from operation of RMB 757,000,000 in the Q4 of 2023 and RMB 4,700,000,000 for the full year of 2023 compared to the operating loss in the 4th quarter and full year of 2022. 2022. Turning to Page 23. Speaker 200:29:37Legacy Huazhu reported adjusted EBITDA of RMB1.3 billion in the 4th quarter 2023 and RMB6.8 billion for the full year of 2023. Please take note that the reported adjusted EBITDA consisted of several one off items, including around RMB 5 19,000,000 gains from selling Accor shares and other investments and around RMB 2 13,000,000 COVID related tax subsidy and the rental reduction for the full year of 2023. And also a unrealized foreign exchange gain of RMB 71 during the year of 2023. Now for the full year of 2023, our DH business reported a positive adjusted EBITDA of RMB87 1,000,000. Our group adjusted net income were RMB657 1,000,000 in Q4 of 2023 and RMB 4.1 billion for the full year of 2023. Speaker 200:30:49Compared to net loss in the Q4 and the full year of 2022, our operating cash flow improved significantly, reached RMB 2,400,000,000 in the Q4 of 2023 and rmb 7.7 billion for the full year. Now please turn to Page 24. As of December 2033, the group had RMB10.5 billion cash, cash equivalents, restricted cash and time deposits on hand and was in a solid net cash position with RMB5.2 billion net cash, including time deposits. We also had RMB 2,800,000,000 unutilized bank facilities at the end of last year. Now let's turn to Page 25. Speaker 200:31:48In November 2023, we declared approximately $300,000,000 cash dividends, which include $200,000,000 regular dividend and a $100,000,000 special dividend. We also repurchased about $122,000,000 worth of shares from the market during the Q4 of 2023 Q4. As we become more asset light and cash rich, we'll continue to reward our shareholders with dividend. Now please turn to Page 26 on guidance. For the Q1 of 2020 4, we expect Oyu to grow 12% to 16% compared to Q1 last year or 11% to 15% excluding DH. Speaker 200:32:47For the full year of 2024, we expect revenue to grow 8% to 12% year over year or 8% to 12% excluding DH. We'll further accelerate our high quality network expansion, setting our gross hotel funding target of around 1800 hotels in 2024, and we expect to close about 6 50 hotels. With that, we're ready to take your questions. Operator, please open the line for Q and A. Operator00:33:20Thank Our first question comes from the line of Dan Qi from Morgan Stanley. Please ask your question, Dan. Speaker 300:35:24Please allow me to translate my question. We would like to understand the recent franchise signing process progress. Do we have a target for this year on signing, in particularly on products and city distribution? Do you see any significant differences when compared with last year? When it comes to hotel opening, congratulations again on the record high opening last year. Speaker 300:35:58I remember CEO, Mr. Jing, mentioned about one bottleneck of annual hotel opening is supply chain and also constructions. I saw you increase your gross opening target to 1800 hotels this year, another record high. So does it mean that we now have made progress in this bottlenecks issue? Should we expect gross opening to gradually increase every year going forward if signing tips up? Speaker 300:36:28Thank you. That's all. Speaker 100:37:49Okay. Yes, let me answer your first question. So over the last several years, we did do some of the right things in terms of to improve our capability in terms of organizational operation, but we also get benefits from 3 major areas. 1 is the benefit from the continuously churn ratio improvements in the market, especially going to be benefiting the top tier companies like Edgeworth. By giving this benefit that we as well as our continuously efforts on building our brand awareness, we indeed getting a good position in terms of getting into the leading position in different segments such as like economic and the middle skill that we have sold several brands at the leading position. Speaker 100:38:43The second benefit is from the lower tier cities penetrations. We cashed the opportunity several years back and we started to build our organizational capability, our human resources to support the lower tier cities penetration opportunities. Thirdly, as we also catch to the opportunity for the for example, the consumption upgrades and also the leisure traveling demand increase, which helped us to develop the upper mid segment. Given our established capability, we are confident that we're going to be having another good new signings for this year as well as the new opening for the year just like we just give the guidance for the 1800. In terms of the supply chain, you're right, last year, just because of ride post pandemic, there was a capacity bottleneck as well as given the industry recovery was very robust. Speaker 100:40:37But however, we don't think there's going to be the supply chain going to be the problem or the bottleneck going forward. In fact, it's going to be a very good supportive factors for us for future sustainable high quality growth. Speaker 200:40:56Thank you. Operator00:40:57Thank you, Dan. Our next question comes from the line of Simon Cheung from Goldman Sachs. Please ask your question, Simon. Speaker 400:41:37That's the first question. So let me do the translation. So the CEO, Jin Zhong, just earlier mentioned that there's the company has greatly benefited from 3 macro or structural trends in the hotel industry over the last several years. Just wondering whether he has observed any new structural trend opportunities as well. The second question related to the margin and the cost. Speaker 400:42:35Last year, they did quite well in terms of the EBITDA margins, particularly in the China business. And wondering, the management can whether they can share with us the cost as well as the margins guidance for 2025. Speaker 100:44:18Okay. Let me answer your first questions. Apart from those three benefits that I just mentioned, going forward, we think the China laundry market definitely has the opportunity, especially on the service excellence front. No matter there is an economic or upper middle skill segments, we observed that the customers has been more looking for value for money, good products, good service products. So for us, we're definitely going to be around their demands, the customer centric to further build up our capability from different and many aspects, including the operational capability, sales capability as well as the marketing capability to fulfill their demand. Speaker 100:45:09And our management goal is to help the Chinese Laundry Company to be the world class in the upcoming future. And also, including those matured markets, maybe, for example, some of the market are getting very matured, but we think there's still a lot of opportunities to redo the market again through the product upgrades, through providing good services to the customers. So all in all, we think going forward, the opportunity is going to definitely from the service excellence together with the sustainable growth. Speaker 200:45:47Simon, I will address your second question regarding cost and profitability. Now while we continue to strive for healthy growth and service excellence, we will also focus on improving management systems, streamline operation and then meticulously measure ROI of every dollar that we spend. So our overall goal is still to strive for an operating leverage, and that's definitely our goal. Operator00:46:20Thank you, Simon. Speaker 200:46:21Thank you. Thank you, Simon. Operator00:46:23Our next question comes from the line of Ronald Leung from Bank of America. Please ask your question, Ronald. Speaker 500:47:26Let me translate the two questions that I have. My first question is about the RevPAR growth outlook. What is management expectations for the rough path growth in 1Q 2024 and also full year 2024? My second question is about the enhancement of the service quality. Could management advise what could be the areas that the company didn't do well enough in terms of the service quality? Speaker 500:47:58And is this possible to provide any specific initiatives to enhance service quality in Q4 and beyond? Thank you very much. Speaker 100:50:59Okay. Let me answer your first question in terms of the RevPAR. So again, last year post pandemic and for the entire year, we clearly see that the RevPAR recovery was mainly driven by a very strong leisure traveling demand. But however, the business traveling demand was relatively slower compared to the leisure in terms of the recovery. Therefore, given the high base of 2023 RevPAR, now 2024, we're going to be a little bit conservative. Speaker 100:51:32So that's why for the full year, we expect that the RevPAR going to be flattish to a low single digit growth on a year over year basis. For your second question, in terms of the service quality, definitely the service excellence is not our short term goal, but the long term. So for us, we put this into our strategy because we think it's going to help us to grow into the next stage. Clearly, we are seeing that not only that we are rapidly growing our networks, but also the customers are evolving rapidly as well. We are now facing a lot of diversified group of new customers and we are trying to use both products and services to further improve their experiences and the satisfaction. Speaker 100:52:25For example, just give you an example for the new group of customer, like there are a lot of marathon events host everywhere in China. So how we can fulfill their demands, but their demands might not be the same as those general to business travelers. So again, what I want to emphasize is the service excellence strategy is not the short term goal for the company, but it's a long term goal for us. It's not a slogan. It's actually it's our management goal to bring the company growing to the next stage. Speaker 100:53:04Thank you. Operator00:53:06Thank you, Ronald. Our next question comes from the line of Sujie Lin from CICC. Please ask your question, Speaker 600:53:49So I'll translate my questions into English. So what's the RevPAR guidance for Q1, would you mind sharing with us? And we got a higher growth opening and net opening this year, which we think is a very good thing and achieve a real high quality growth. So considering that we are opening hotels with higher RevPAR, meanwhile closing hotels with bad performance, so how much percentage of RevPAR growth will be contributed by this mix upgrade? Thank you. Speaker 200:54:21Thanks for your question, Sujie. In the Q1, our RevPAR probably will grow around the low single digit. And as you mentioned, we will maintain a healthy growth with service excellence. However, in the meantime, we also encourage you to look at the index like drivers other than RevPAR. RevPAR is definitely one of our drivers, but we're rapidly shifting from a heavy model to SLI model. Speaker 200:54:49And more and more franchise and franchise hotels will be opened throughout the year. And therefore, there will be different drivers that drive our growth in the future. And that's something we can discuss. And while we are opening more and more mid upscale hotels, we are also sinking into low tier cities. So the impact of new hotels to our RevPAR will be blended. Speaker 200:55:20Thank you, Mr. Jie, for your question. Operator00:55:25Thank you, Tien. Thank you. Our next question comes from the line of Lydia Lin from Citi. Please ask your question, Lydia. Speaker 600:56:30Sorry, let me translate the question first. And so my first question is like what we want to follow-up on the store opening. Actually, the pace of the store opening accelerated this year. So I want to check how about like the franchise confidence currently in the market given the macro conditions? And also, is the company going to actually provide more support to the franchisee? Speaker 600:56:56And my second question is on the overseas business, the DH business. And so it's already like to have the like a positive EBITDA for last year. And so how to actually like to further drive the profitability this year? Any target for this year? Thank you. Speaker 100:58:47Let me answer your first question in terms of the franchisee. So definitely, a healthier return or ROI for franchisees and very important thing for that. That's what we are putting a lot of efforts on to helping them to get a good return to open every hotel that can help them to make the money. So we definitely will, again, provide a good service just like what we discussed before. We're also going to provide a good service to the franchisees and also some of the supportive policy to help them to continuously open good hotels. Speaker 100:59:22For some of the existing franchisees, we definitely can helping them to open every hotels and with a good return. And for the new franchisees, especially for the new regions and new segments, for example, the lower tier cities and the upper mid segment, we are dealing with a lot of new franchisees that was not existing before. For example, a lot of local property companies, governments as well as the SOEs. So all in all, for the franchisees, definitely what we are trying to do is providing their good services and supportive policies just to ensure that every hotel stay open, we are going to have a good return and ROI. Speaker 201:00:08Lily, I'm going to answer your second question about DH's profitability and cost structure. Now, firstly, we're determined that DH will move steadily to SLI business model and we are making progress in that area. And secondly, DH is try their best to achieve operational efficiency and by creating a lean organization. And certainly, we are actually meticulously measuring our eye on all major capital and operational spending in DH business level. And with all that effort, we are determined to help DH gradually improve their profitability and gradually turn cash flow positive. Speaker 201:00:55Thank you, Lydia, for your questions. Operator01:00:57Thank you. We have reached the end of the question and answer session. Thank you very much for all your questions. I'll now turn the conference back to the management team for any additional closing comments. Speaker 101:01:13Thank you, everyone, for taking your time with us today, and we look forward to seeing you in upcoming quarter. Thank you, and bye bye. Operator01:01:21Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallH World Group Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(20-F) H World Group Earnings HeadlinesH World Group Limited Files Annual Report for 2024April 25, 2025 | tipranks.comH World Group (NASDAQ:HTHT) Is Doing The Right Things To Multiply Its Share PriceApril 11, 2025 | finance.yahoo.comTrump’s Bitcoin Reserve is No Accident…Bryce Paul believes this is the #1 coin to buy right now The catalyst behind this surge is a massive new blockchain development…May 4, 2025 | Crypto 101 Media (Ad)H World Group Adjusts Convertible Notes Conversion Rate Following DividendApril 9, 2025 | tipranks.comH World price target raised to $47 from $45 at Morgan StanleyApril 1, 2025 | markets.businessinsider.comH World Group (HTHT): One of the Best Chinese Stocks to Buy According to BillionairesMarch 27, 2025 | msn.comSee More H World Group Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like H World Group? Sign up for Earnings360's daily newsletter to receive timely earnings updates on H World Group and other key companies, straight to your email. Email Address About H World GroupH World Group (NASDAQ:HTHT) develops leased and owned, manachised, and franchised hotels in the People's Republic of China. The company operates hotels under its own brands, such as HanTing Hotel, Ni Hao Hotel, Hi Inn, Elan Hotel, Zleep Hotels, Ibis Hotel, JI Hotel, Orange Hotel, Starway Hotel, Ibis Styles Hotel, CitiGO Hotel, Crystal Orange Hotel, IntercityHotel, Manxin Hotel, Mercure Hotel, Madison Hotel, Novotel Hotel, Joya Hotel, Blossom House, Steigenberger Hotels & Resorts, MAXX by Steigenberger, Jaz in the City, Grand Mercure, Steigenberger Icon, and Song Hotels. The company was formerly known as Huazhu Group Limited and changed its name to H World Group Limited in June 2022. 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There are 7 speakers on the call. Operator00:00:00Good day, and thank you for standing by. Welcome to H. Wirth First Quarter and Full Year 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. Operator00:00:38It is now my pleasure to hand you over to Ateworld Senior IR Director, Mr. Jason Chen. Please go ahead. Speaker 100:00:48Thank you. Good morning and good evening everyone. Thanks for joining us today. Welcome to Edgewood Group 2023 4th quarter and full year earnings conference call. Joining us today is our Chairman, Mr. Speaker 100:01:05Ji Qi our CEO, Mr. Jinhui and our CFO, Mr. Zou Jun. Following their prepared remarks, management will be available to answer your questions. Before we continue, please note that the discussion today will include forward looking statements made under the Safe Harbor provision of the United States Private Securities Litigation Reform Act of 1995. Speaker 100:01:32Forward looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. Edgewood Group does not undertake any obligations to update any forward looking statements, except as required under applicable laws. On the call today, we will also mention adjusted financial measures during the discussion of our performance. Speaker 100:02:06Reconciliations of those measures to comparable GAAP information can be found in our earnings release that was distributed yesterday. As a reminder, this conference call is being recorded. The webcast of this conference call as well as supplementary slide presentation is available at ir. Edgewood.com. With that, now I will hand over the call to our COO, Mr. Speaker 100:02:32Jin Hui to discuss our business performance in 2023. Mr. Jin, please. In 2023, the domestic traveling industry experienced strong momentum of recovery. Along with the robust rebound of the industry, Ashworth continued implementing our sustainable high quality growth strategy and achieved great results. Speaker 100:03:45First of all, let's take a look at our achievements in 2023. Please turn to Page 3. Thanks to the strong leisure demand and the gradual recovery of business demand post the pandemic, In 2023, our China business achieved a robust recovery with RevPAR recovered to 122% of the 2019 level for the whole year. Entering into 2024, we still see our RevPAR performing steadily so far. Our hotel network continued to expand. Speaker 100:05:16Please turn to page 4. Excluding the economic software brand, we opened a total of 16 41 hotels in 2023, reached a record high in terms of annual opening number. At the same time, we closed 789 hotels in 2023. However, excluding the low quality economic softer brand and Hanqing 1.0 version, the closure were only 273 hotels, a slight increase from 237 in 20 22. The high closure number in 2023 demonstrated our determination to remove or upgrade low quality hotels in an accelerated manner, which is in line with our sustainable quality growth strategy. Speaker 100:06:08In terms of our pipeline, by the end of 2023, our hotels in pipeline reached 3,061, another record high. The limited service segment remains our key strategic focus. Our economic and middle scale products, which target the mass market, are the key drivers of our network expansions. Breaking down our hotels in operation, hotels in pipeline and hotel opening in 2023, the proportion of economic and the middle scale hotel were 92%, 85% and 90%, respectively. Edward has set a specific brand strategy named Iron Triangle to develop the economic and the middle skill segments. Speaker 100:08:20The Iron Triangle strategy consists of our 3 key brands namely Hanjin, B Hotel and Orange. In 2023, we have upgraded products for all these 3 brands. Please turn to Page 6. Firstly, our HanTing products were being constantly upgraded. The proportion of HanTing 1.0 version was significantly declined from 28.5% as of 2020 to only 4.4% as of 2023, while the proportion of HanTing 2.7 and above version steadily increased from only 34.4% as of 2020 to 71.2% as of 2023. Speaker 100:09:09As the 1st flagship brand with the longest history within the group, Hanjin has maintained its market competitiveness and attractiveness to customers and the franchisees through continuous product innovation and upgrades. Please turn to Page 7. We launched the newest version 5.0 for JI Hotel at the end of last year. The new version further elaborates lifestyle of oriental aesthetic and shows confidence in distinctive Chinese style service. Starting from the stage of design, JI Hotel 5.0's version implements the concept of sustainable development such as adopting prefabricated design, intelligent lighting system and environmentally friendly construction system. Speaker 100:10:36These implementations could largely help reducing environmental pollution and energy consumption. Additionally, we also explored some new business models in the public area or lobby area of JI Hotel 5.0 version. We introduced an innovative tea space or tea house in JI Hotels' public area and also further strengthening the Keqing products, which is the scenario based retail business. Lastly, our Orange brand. We launched low half version in 2023. Speaker 100:11:29Please turn to Page 8. After only 1 year post its official launch, OrangeLohu's version has already gained tremendous popularity in the market. As of 2023, the low cost products accounted for 58% of the total pipeline of Orange brand. Edgeward continued to expand geographic coverage of our hotel network. Please turn to Page 9. Speaker 100:12:40We kept on penetrating in lower tier cities in China. As of 2023, around 40 percent of hotels in operation were located in Tier 3 and 4 and below cities, representing a 2 percentage point increase compared to 2022. At the same time, 55% of hotels in pipeline were located in lower tier cities. Also, the percentage number were lower compared to 2022, its absolute number were higher. As of 2023, the number of city coverage was 1257, added 131 new cities penetration compared to 2022. Speaker 100:14:03In addition, our capabilities of localized development and operation in the previously less penetrated or weak areas in China has been improving significantly, and we achieved initial results post our organizational restructuring by establishing regional headquarters. Please turn to Page 10. In the South, West and Central China, the total new signings in 2023 increased more than 100%, 80% and 40% year over year, respectively, and increased more than 200%, 130% and 110% compared to the pre COVID year of 2019, respectively. Please turn to Page 11. Our upper midscale segment development is continuously progressing. Speaker 100:15:44As of the Q4 of 2023, there were 645 upper midscale hotels in operation, representing 23% year over year increase and 7% quarter over quarter increase. And there were 386 of upper midscale hotels in pipeline, representing a 34% year over year increase and an 8% increase on a sequential basis. Combining the Hotel Xin operations and Hotel Xin pipelines together, the total number of our upper mid hotels reached 1031 in 2023. We are very glad that we had achieved our target, which was set in the Q2 of 2021. However, it is still far from enough. Speaker 100:16:38We will continue to strengthen our footprint in the upper mid scale segment, mainly through our core brands and strive to become a leading brand in the market in the foreseeable future. Please turn to Page 12. Being one of our core brands in the upper midscale segment, Intercity Brands launched its new products in 2022 The number of its pipeline hotels has quickly increased to 53 at year end, demonstrating the high market recognition and acceptance of the brand and the products. Turning to page 13, at the same time, the Crystal Orange gained a good momentum of new signings as well. By the end of 2023, the number of hotels in the pipeline reached 119, which doubled from the beginning of 2023. Speaker 100:18:38Lastly, let's review our performance in regards to the membership and the central reservation system. Please turn to page 14. The total number of members continued to increase to 228,000,000 in 2023 and has ranked number 1 worldwide. Direct bookings through our central reservation systems was 62.6% in 2023, representing a 9 percentage point increase on a year over year basis. All in all, we continued to reinforce our membership program and the central reservation system. Speaker 100:20:48After discussing our achievements in 2023, let's now go through our key strategic forecast in 2024. Please turn to page 15. Service excellence centric sustainable growth, quality growth will be the strategic focus of Lexi Huazhu in 2024. This strategic focus is divided into 3 major areas. Firstly, high quality hotel network expansion. Speaker 100:21:17In the limited service segment, we will continuously expand our footprint nationwide by executing our Irown Triangle strategy with focus on less penetrated areas and the lower tier cities. In the upper middle segment or selected service segment, we will consistently implement our multi brand strategy to further strengthen our presence. Secondly, customer centric product upgrades and service excellence. In terms of product quality, we will continue to upgrade old hotels and introduce new products for each brand to meet our customers' diversified needs. In terms of service quality, 2024 marks the beginning of an year of service excellence for Edgeworth. Speaker 100:22:11It means that we are going to put more emphasis on service, which provided to both our customers and franchisees to continuously enhance their experiences and satisfaction. Lastly, the digitalized based organizational capability enhancement. Continued improvement on both products and service quality would be difficult in the absence of strong support from a strong organizational and digitalization capability. We are going to further enhance our management capability and operational efficiency in the areas such as supply chain optimization, integrated marketing program, talent reserve, organizational capability and so on, through a comprehensive digitalization process. By doing so, it could help us to establish a solid foundation to support our business development in a rapid and sustainable manner. Speaker 100:23:36Please turn to Page 16. In terms of our overseas business, there are 4 major strategic focus. Firstly, transforming to asset light model secondly, continuously focusing on cost reduction and profitability improvement thirdly, further strengthening direct sales via edge rewards global loyalty program and lastly, looking for the APAC and the Middle East growth opportunity. All above our 2023 review and 2024 strategic focus discussions. Now I will hand over the call to our CFO, Mr. Speaker 100:24:33Zhou Jun, to discuss our 2023 Q4 and full year operational and financial reviews. Mr. Zhou, please. Speaker 200:24:41Thank you, Jing Fei. Good morning and good evening to everyone. Let's go through our operational and financial review for the Q4 and full year of 2023. Please now turn to Page 18. In 2023, we continue to expand our hotel network. Speaker 200:24:57Our overall number of rooms increased 13% year over year to over 912,000 rooms by the end of 2023 compared to over 809,000 rooms as of end of the last year. Our hotel turnover for the full year of 2023 was RMB 80,400,000,000, representing a 62% increase compared to 2022. Excluding the age, Lexi Huazhu's hotel turnover grew 66% year over year to RMB73.3 billion. Now let's turn to Page 19. Since China lifted a travel restriction in late 2022, we saw a strong rebound in leisure travel and a gradual recovery in business travel throughout 2023. Speaker 200:25:48The landed RevPAR for Lexi Huazhu reached RMB242, representing a recovery of 122% compared to the 2019 level and a year over year increase of 54%. The robust RevPAR growth was primarily driven by ADR, which raised 27% to RMB299 in 2023, which was mainly due to our product mix change as well as continued product upgrade over the last few years. Occupancy rate also improved throughout the year to 81% for the full year of 2023. Now Page 20. For the edge business, full year 2023 blended RevPAR grew 14.5% year over year to EUR 0.71, which was driven by 1% increase in ADR and a 7% increase in occupancy rate to 63% OCC. Speaker 200:26:47Now please turn to Page 21. In 4Q 2023, our total revenue for the group increased 51% year over year to RMB 5,600,000,000, exceeding our previous guidance of 41% to 45% year over year growth. For the full year of 2023, our group revenue increased 58% year over year to RMB 21,900,000,000, of which Lexi Huazhu achieved 64% year over year revenue growth to RMB 17,400,000,000 and the DH grew 39% year over year to RMB 4,400,000,000. The revenue growth of Legacy Huazhu was driven by the strong travel demand in China as well as our continued product grade and the market penetration throughout the regional offices. For DH, its revenue growth was attributable to the market recovery on network expansion as well as favorable exchange rate. Speaker 200:27:50Now please turn to Page 22. Hotel operating costs were RMB 4,000,000,000 in the Q4 of 2023 and RMB 14,300,000,000 for the full year of 2023. The year over year increase was primarily due to our business recovery and the Q o Q increase in the 4th quarter was mainly due to RMB 200,000,000 impairment loss on the legacy Huazhu level as well as RMB 162,000,000 impairment from Legacy DH. The increase of our hotel operating costs was slower than our revenue growth, reflecting operating leverage of the business. Now preopening expenses reduced meaningfully as we continue to execute our asset light strategy and become more selective on opening leased and owned hotels. Speaker 200:28:46SG and A expenses were RMB 917,000,000 in the Q4 of 2023 and RMB 3,200,000,000 for the full year of 2023. The year over year increase in SG and A were mainly due to increased personnel costs, OTA commissions and promotional expenses along with business recovery. Overall, we achieved operating leverage and delivered income from operation of RMB 757,000,000 in the Q4 of 2023 and RMB 4,700,000,000 for the full year of 2023 compared to the operating loss in the 4th quarter and full year of 2022. 2022. Turning to Page 23. Speaker 200:29:37Legacy Huazhu reported adjusted EBITDA of RMB1.3 billion in the 4th quarter 2023 and RMB6.8 billion for the full year of 2023. Please take note that the reported adjusted EBITDA consisted of several one off items, including around RMB 5 19,000,000 gains from selling Accor shares and other investments and around RMB 2 13,000,000 COVID related tax subsidy and the rental reduction for the full year of 2023. And also a unrealized foreign exchange gain of RMB 71 during the year of 2023. Now for the full year of 2023, our DH business reported a positive adjusted EBITDA of RMB87 1,000,000. Our group adjusted net income were RMB657 1,000,000 in Q4 of 2023 and RMB 4.1 billion for the full year of 2023. Speaker 200:30:49Compared to net loss in the Q4 and the full year of 2022, our operating cash flow improved significantly, reached RMB 2,400,000,000 in the Q4 of 2023 and rmb 7.7 billion for the full year. Now please turn to Page 24. As of December 2033, the group had RMB10.5 billion cash, cash equivalents, restricted cash and time deposits on hand and was in a solid net cash position with RMB5.2 billion net cash, including time deposits. We also had RMB 2,800,000,000 unutilized bank facilities at the end of last year. Now let's turn to Page 25. Speaker 200:31:48In November 2023, we declared approximately $300,000,000 cash dividends, which include $200,000,000 regular dividend and a $100,000,000 special dividend. We also repurchased about $122,000,000 worth of shares from the market during the Q4 of 2023 Q4. As we become more asset light and cash rich, we'll continue to reward our shareholders with dividend. Now please turn to Page 26 on guidance. For the Q1 of 2020 4, we expect Oyu to grow 12% to 16% compared to Q1 last year or 11% to 15% excluding DH. Speaker 200:32:47For the full year of 2024, we expect revenue to grow 8% to 12% year over year or 8% to 12% excluding DH. We'll further accelerate our high quality network expansion, setting our gross hotel funding target of around 1800 hotels in 2024, and we expect to close about 6 50 hotels. With that, we're ready to take your questions. Operator, please open the line for Q and A. Operator00:33:20Thank Our first question comes from the line of Dan Qi from Morgan Stanley. Please ask your question, Dan. Speaker 300:35:24Please allow me to translate my question. We would like to understand the recent franchise signing process progress. Do we have a target for this year on signing, in particularly on products and city distribution? Do you see any significant differences when compared with last year? When it comes to hotel opening, congratulations again on the record high opening last year. Speaker 300:35:58I remember CEO, Mr. Jing, mentioned about one bottleneck of annual hotel opening is supply chain and also constructions. I saw you increase your gross opening target to 1800 hotels this year, another record high. So does it mean that we now have made progress in this bottlenecks issue? Should we expect gross opening to gradually increase every year going forward if signing tips up? Speaker 300:36:28Thank you. That's all. Speaker 100:37:49Okay. Yes, let me answer your first question. So over the last several years, we did do some of the right things in terms of to improve our capability in terms of organizational operation, but we also get benefits from 3 major areas. 1 is the benefit from the continuously churn ratio improvements in the market, especially going to be benefiting the top tier companies like Edgeworth. By giving this benefit that we as well as our continuously efforts on building our brand awareness, we indeed getting a good position in terms of getting into the leading position in different segments such as like economic and the middle skill that we have sold several brands at the leading position. Speaker 100:38:43The second benefit is from the lower tier cities penetrations. We cashed the opportunity several years back and we started to build our organizational capability, our human resources to support the lower tier cities penetration opportunities. Thirdly, as we also catch to the opportunity for the for example, the consumption upgrades and also the leisure traveling demand increase, which helped us to develop the upper mid segment. Given our established capability, we are confident that we're going to be having another good new signings for this year as well as the new opening for the year just like we just give the guidance for the 1800. In terms of the supply chain, you're right, last year, just because of ride post pandemic, there was a capacity bottleneck as well as given the industry recovery was very robust. Speaker 100:40:37But however, we don't think there's going to be the supply chain going to be the problem or the bottleneck going forward. In fact, it's going to be a very good supportive factors for us for future sustainable high quality growth. Speaker 200:40:56Thank you. Operator00:40:57Thank you, Dan. Our next question comes from the line of Simon Cheung from Goldman Sachs. Please ask your question, Simon. Speaker 400:41:37That's the first question. So let me do the translation. So the CEO, Jin Zhong, just earlier mentioned that there's the company has greatly benefited from 3 macro or structural trends in the hotel industry over the last several years. Just wondering whether he has observed any new structural trend opportunities as well. The second question related to the margin and the cost. Speaker 400:42:35Last year, they did quite well in terms of the EBITDA margins, particularly in the China business. And wondering, the management can whether they can share with us the cost as well as the margins guidance for 2025. Speaker 100:44:18Okay. Let me answer your first questions. Apart from those three benefits that I just mentioned, going forward, we think the China laundry market definitely has the opportunity, especially on the service excellence front. No matter there is an economic or upper middle skill segments, we observed that the customers has been more looking for value for money, good products, good service products. So for us, we're definitely going to be around their demands, the customer centric to further build up our capability from different and many aspects, including the operational capability, sales capability as well as the marketing capability to fulfill their demand. Speaker 100:45:09And our management goal is to help the Chinese Laundry Company to be the world class in the upcoming future. And also, including those matured markets, maybe, for example, some of the market are getting very matured, but we think there's still a lot of opportunities to redo the market again through the product upgrades, through providing good services to the customers. So all in all, we think going forward, the opportunity is going to definitely from the service excellence together with the sustainable growth. Speaker 200:45:47Simon, I will address your second question regarding cost and profitability. Now while we continue to strive for healthy growth and service excellence, we will also focus on improving management systems, streamline operation and then meticulously measure ROI of every dollar that we spend. So our overall goal is still to strive for an operating leverage, and that's definitely our goal. Operator00:46:20Thank you, Simon. Speaker 200:46:21Thank you. Thank you, Simon. Operator00:46:23Our next question comes from the line of Ronald Leung from Bank of America. Please ask your question, Ronald. Speaker 500:47:26Let me translate the two questions that I have. My first question is about the RevPAR growth outlook. What is management expectations for the rough path growth in 1Q 2024 and also full year 2024? My second question is about the enhancement of the service quality. Could management advise what could be the areas that the company didn't do well enough in terms of the service quality? Speaker 500:47:58And is this possible to provide any specific initiatives to enhance service quality in Q4 and beyond? Thank you very much. Speaker 100:50:59Okay. Let me answer your first question in terms of the RevPAR. So again, last year post pandemic and for the entire year, we clearly see that the RevPAR recovery was mainly driven by a very strong leisure traveling demand. But however, the business traveling demand was relatively slower compared to the leisure in terms of the recovery. Therefore, given the high base of 2023 RevPAR, now 2024, we're going to be a little bit conservative. Speaker 100:51:32So that's why for the full year, we expect that the RevPAR going to be flattish to a low single digit growth on a year over year basis. For your second question, in terms of the service quality, definitely the service excellence is not our short term goal, but the long term. So for us, we put this into our strategy because we think it's going to help us to grow into the next stage. Clearly, we are seeing that not only that we are rapidly growing our networks, but also the customers are evolving rapidly as well. We are now facing a lot of diversified group of new customers and we are trying to use both products and services to further improve their experiences and the satisfaction. Speaker 100:52:25For example, just give you an example for the new group of customer, like there are a lot of marathon events host everywhere in China. So how we can fulfill their demands, but their demands might not be the same as those general to business travelers. So again, what I want to emphasize is the service excellence strategy is not the short term goal for the company, but it's a long term goal for us. It's not a slogan. It's actually it's our management goal to bring the company growing to the next stage. Speaker 100:53:04Thank you. Operator00:53:06Thank you, Ronald. Our next question comes from the line of Sujie Lin from CICC. Please ask your question, Speaker 600:53:49So I'll translate my questions into English. So what's the RevPAR guidance for Q1, would you mind sharing with us? And we got a higher growth opening and net opening this year, which we think is a very good thing and achieve a real high quality growth. So considering that we are opening hotels with higher RevPAR, meanwhile closing hotels with bad performance, so how much percentage of RevPAR growth will be contributed by this mix upgrade? Thank you. Speaker 200:54:21Thanks for your question, Sujie. In the Q1, our RevPAR probably will grow around the low single digit. And as you mentioned, we will maintain a healthy growth with service excellence. However, in the meantime, we also encourage you to look at the index like drivers other than RevPAR. RevPAR is definitely one of our drivers, but we're rapidly shifting from a heavy model to SLI model. Speaker 200:54:49And more and more franchise and franchise hotels will be opened throughout the year. And therefore, there will be different drivers that drive our growth in the future. And that's something we can discuss. And while we are opening more and more mid upscale hotels, we are also sinking into low tier cities. So the impact of new hotels to our RevPAR will be blended. Speaker 200:55:20Thank you, Mr. Jie, for your question. Operator00:55:25Thank you, Tien. Thank you. Our next question comes from the line of Lydia Lin from Citi. Please ask your question, Lydia. Speaker 600:56:30Sorry, let me translate the question first. And so my first question is like what we want to follow-up on the store opening. Actually, the pace of the store opening accelerated this year. So I want to check how about like the franchise confidence currently in the market given the macro conditions? And also, is the company going to actually provide more support to the franchisee? Speaker 600:56:56And my second question is on the overseas business, the DH business. And so it's already like to have the like a positive EBITDA for last year. And so how to actually like to further drive the profitability this year? Any target for this year? Thank you. Speaker 100:58:47Let me answer your first question in terms of the franchisee. So definitely, a healthier return or ROI for franchisees and very important thing for that. That's what we are putting a lot of efforts on to helping them to get a good return to open every hotel that can help them to make the money. So we definitely will, again, provide a good service just like what we discussed before. We're also going to provide a good service to the franchisees and also some of the supportive policy to help them to continuously open good hotels. Speaker 100:59:22For some of the existing franchisees, we definitely can helping them to open every hotels and with a good return. And for the new franchisees, especially for the new regions and new segments, for example, the lower tier cities and the upper mid segment, we are dealing with a lot of new franchisees that was not existing before. For example, a lot of local property companies, governments as well as the SOEs. So all in all, for the franchisees, definitely what we are trying to do is providing their good services and supportive policies just to ensure that every hotel stay open, we are going to have a good return and ROI. Speaker 201:00:08Lily, I'm going to answer your second question about DH's profitability and cost structure. Now, firstly, we're determined that DH will move steadily to SLI business model and we are making progress in that area. And secondly, DH is try their best to achieve operational efficiency and by creating a lean organization. And certainly, we are actually meticulously measuring our eye on all major capital and operational spending in DH business level. And with all that effort, we are determined to help DH gradually improve their profitability and gradually turn cash flow positive. Speaker 201:00:55Thank you, Lydia, for your questions. Operator01:00:57Thank you. We have reached the end of the question and answer session. Thank you very much for all your questions. I'll now turn the conference back to the management team for any additional closing comments. Speaker 101:01:13Thank you, everyone, for taking your time with us today, and we look forward to seeing you in upcoming quarter. Thank you, and bye bye. Operator01:01:21Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.Read morePowered by