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spk13: Ladies and gentlemen, thank you for standing by and welcome to the Attour Lifestyle Holdings Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After speaker's presentation, there'll be question and answer session. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Queenie Chin, Senior Manager of Investor Relations. Please go ahead, ma'am.
spk11: Thank you, operator. Good morning and good evening, everyone. Welcome to our fourth quarter and full year 2022 earnings call. Joining us today are our founder, chairman, and CEO, Mr. Wang Haijun, and our co-CFOs, Ms. Zhao Rui and Mr. Wang Shoudong. Before we start, please note the discussion today will include forward-looking statements made under federal securities laws. that are subject to numerous risks and uncertainties. Actual results may differ materially from those stated or implied by our comments today. The company does not undertake any obligations to update any forward-looking statements except as required to applicable laws. During today's call, management will also discuss certain non-GAAP financial matters for a comparison purpose only. For definition of non-GAAP financial merits and reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our website at ir.yadu.com. Now, I will turn the call over to Mr. Wang, our CEO.
spk03: Thank you, Xiangzi. Hello, everyone. Thank you for participating in Yadu Group's the 4th quarter of 2022 and the full-year performance call conference.
spk19: Thank you, Kuni. Hello, everyone, and thank you for joining the TOR's 4th quarter and 4-year 2022 earnings call today.
spk03: Today is the first financial call conference since the launch of NASDAQ. Being a listed company is an important milestone for us. It also encourages us to never forget our original intention to try our best to bring better products and experiences to more users. Since its establishment in 2013, Yadot has always been positioned as a brand based on a lifestyle based on accommodation. Starting from accommodation, we want to pursue quality of life users, continue to pass on the warm and interesting way of life to people, so that people can have a warm connection with each other.
spk19: This is our first earnings call following our successful listing on NASDAQ. Becoming a public company is not just an important milestone for us. It also encourages to continuously improve our products and customer experiences while building a stronger lifestyle brand. Since establishment in 2013, Ator has always been positioned as a lodging-centric lifestyle brand. We have endeavored to navigate a fashionable approach to meet the refined expectations of those who demand a high-quality lifestyle beyond accommodation and to create people-centered and hospital experiences full of joy for our customers by providing an intimate ambience where people can warmly connect.
spk03: 2022 is a year of extreme challenges. This year, we have experienced the outbreak of the epidemic in different parts of the country, and at the end of the year, we have entered a new phase of the epidemic. The three-year epidemic has brought a huge challenge to the entire accommodation industry. As the leader of the high-end hotel industry, Adore has always been actively responding, Through diversified and personalized services, we are able to meet the needs of users in special times and bring them a comfortable living experience. At the same time, we continue to enrich life-style products and improve user experience. With the foundation and strong willpower of the industry, we have endured this test. As the market gradually improves and quickly recovers, we are confident that high-quality products can continue to grow in the future.
spk19: 2022 was a challenging year, in which we experienced various degrees of pandemic outbreaks across the country. We were glad to see that new post-pandemic phase emerge at year-end. The three-year pandemic imposed great challenges on the hospitality industry as a whole. As a leading Upper Misco Hotel chain in China, Ator proactively responded to these challenges enhancing Zephyrs to cater to customers' needs during such unusual times with memorable and personalized experiences in a safe and comfortable environment. By refining our lifestyle products and improving customer experiences across various scenarios, we weathered the challenge with fortitude and resilience. We're now in an even better position to pursue sustainable growth as market rebounds.
spk03: Today, we are very happy to announce We are delighted to announce a solid four-year performance as well as fourth consecutive year of profitability.
spk19: with total revenue for 2022 maintaining its growth momentum. I would like to take this opportunity to express our deep gratitude to our customers and franchisees for choosing and trusting Ator. Also, to our employees on the front lines who work tirelessly to ensure a safe and comfortable accommodation experience for our customers, we sincerely thank you for your perseverance and dedication.
spk03: At the beginning of 2023, Ator released a three-year development plan for 2,000 good stores in China. We will start a new year in a brand new way. Before the end of 2025, we will open 2,000 high-quality hotels to further upgrade Yaduo's fun, comfortable and individualized way of life experience. Under the guidance and drive of the experience and the double engine development plan, Yaduo aims to become the benchmark of Chinese experience.
spk19: To inaugurate 2023, we released a new three-year development plan that targets to expand our footprint as a total of 2,000 premier hotels by the end of 2025, each offering a host of standardized yet pleasant and personalized experiences. Aligned with our dual-engine development plan that encompasses experience and scale, we are committed to becoming an industrial benchmark for the Chinese experience.
spk02: Next, I will introduce the specific situation of each business.
spk19: Now, let me go through the performance details across the business lines.
spk03: First of all, the hotel business. In the fourth quarter, our roll-up has returned to a level of about 80% in 2019. In November 2022, with the gradual relaxation of the domestic epidemic control, everyone experienced COVID-19 infection. Our business was also affected. In the beginning of 2023, the travel and accommodation needs that were suppressed quickly rebounded. The trend predicted for this market change Our hotel business development. During the fourth quarter of 2022, our ref bar achieved approximately 80% of 2019's level for the same period.
spk19: Following the lifting of pandemic restrictions in China in November 2022, a large portion of our population contracted COVID, which also disrupted our business operations. However, since the beginning of 2023, pandemic demand for travel and accommodation has started to rebound rapidly. In response to evolving market conditions, we took initiative to reduce our number of requisition hotels, which is a forward-thinking move that proved very effective. Accordingly, the percentage of requested hotels in our hotel network decreased to 6% as of the end of December 2022 from 32% at the beginning of the month.
spk03: We have seen the rapid rebound of the first quarter of 2023. During the seven-day holiday period of the Spring Festival, our Rollerpop has returned to the leading industry, reaching 105% of the same level as in 2019. As we have progressed through the first quarter of 2023, our REVPAR has increased rapidly. As seen during the seven-day Spring Festival holiday, when the REVPAR attained 105% of its level for the comparable period in 2019, exceeding the overall industry level.
spk19: Consequently, We forecast that the RevPower for the first quarter of 2023 will achieve 115% of its level for the same period in 2019. As this growth momentum builds, we are confident that the company will continue to pick up in the coming quarters.
spk03: As the leading chain of high-end hotels in China, As the leading chain of high-end hotels in China, As the leading chain of high-end hotels in China, As the leading chain of high-end hotels in China, As the leading chain of high-end hotels in China, We will expand the network to focus on the core business circle of the first line, the new line and the second line cities. It not only reflects our rich industry experience and deep market insight, but also led Asia to achieve high-speed development in the past 10 years. Currently, we have successfully built a high-efficiency hotel network, and completed the centralization layout of six brands from the middle to luxury from the high-end to the core.
spk19: As a leading upper MISCO hotel chain in China, Ator has earned broad recognition and a sterling brand reputation by virtue of its premium experiences and holistic comprehension of customers' preferences and desires. Our strategic decision to develop our hotel network mainly in core business districts in first- to second-tier cities not only highlights our extensive experience and deep market insight, but also empowered our rapid growth and development over the past decade. Today, we have established an effective hotel network with a distinct portfolio of six brands centered on a tour and a tour X, our two upper Misco hotel brands.
spk03: In 2022, in an extremely challenging environment, we have a total of 191 hotels opened throughout the year. Only four are closed. By the end of 2022, we will have a total of 932 hotels. The number of rooms is 10.8 million. The total growth rate is 25%.
spk19: In 2022, we opened 191 new hotels while experiencing only four hotels closed or closures from our existing portfolio under the challenging conditions. As of December 31st, 2022, our hotel network encompasses 932 hotels with a total of 108,000 rooms, representing a rapid increase of 25% year-over-year in both hotels and rooms.
spk03: Our pipeline project is fully prepared and is still expanding, providing very good conditions for future growth. By the end of 2022, we have 363 hotels in the pipeline. At the same time, we see that single hotels are clearly emerging in the epidemic. After the epidemic, the demand for industry storage and integration has increased. We will actively grasp the opportunity to turn the tables and further consolidate our leadership position in the high-end hotel industry.
spk19: Furthermore, we manage a rich and ever-evolving pipeline of hotels under development, positioning the company to seamlessly capture and maximize future growth opportunities. As of year-end 2022, we had 363 hotels under development. On the related note, we are currently seeing high demand for industry integration as many independent hotels suffered a survive during the pandemic, offering great opportunities to augment our development pipeline. As we identify and acquire suitable properties, we will actively expand our coverage even further and solidify our leadership in the upper mid-scale segment.
spk03: Our product development base was established in Shanghai's Fengxian District in 2022. We are focused on the development and upgrade of hotel products. After months of hard work, we officially released the QingJu 3.0 water-free blue product on February 22, 2023. We have made a new upgrade to the QingJu brand. Finally, we completed our product R&D base in Shanghai in 2022
spk19: a dedicated facility specializing in the research and development of our hotel products. Following several months of persistent effort, we officially launched the Ator Lite 3.0 version on February 22nd of 2023. This revolutionary product upgrade delivers a high-quality, more relaxed experience for Ator Lite customers while offering franchisees a less capital-intensive investment opportunity. As a MISCO hotel brand in our portfolio, Atorlite is an important strategic segment that primarily centers or caters to young urban travelers seeking premium experiences. Through continuous improvements and iterations based on our keen understanding of shifting market demand, we believe we can grow an Atorlite family into our next 1,000 hotel brand.
spk03: Next, I will introduce our hotel membership plan and central booking channels. Next, let me share more details on the development of our loyalty program and our central reservation system or CRS.
spk19: Driven by our quality services and enjoyable customer experiences, our membership base has grown rapidly. By the end of 2022, we had over 35 million members, and our members' repurchase rate for 2022 further increased to 58% from 53% for 2021. Users' stickiness continues to improve.
spk03: In order to return the trust of our members, we continue to enrich the rights of our members. In order to build a system that focuses on accommodation, Cover culture, consumption, social and other rich ways of life membership ecosystem In June 2022, we launched a new way of life membership plan of a card Only in the appearance of their own brand service ability to provide more than a hotel's unique individual experience We will also continue to expand through a wide range of channels, including collaboration with third parties to launch credit cards and other ways to help our members
spk19: To reward our members for their trust, we have constantly enriched our loyalty program. Our goal is to develop a scenario-based membership ecosystem offering rich lifestyle privileges covering culture, consumption, and social interactions. In June of 2022, we launched our ACAR loyalty program, a new lifestyle membership brand providing unique perks and personalized experiences extending beyond hotel services. We will also amplify our efforts to attract and engage new members through extensive promotion channels, including co-memberships with third parties.
spk03: Personal members and business members have become our core members. The continuous improvement in the coverage of personal and business members has also accelerated the increase in the contribution of CIS's overall income. In 2022, our direct-to-commercial channels accounted for more than 80%, CIS accounted for 60%, With regards to CRS, the increasing coverage of both individual memberships and corporate customers has accelerated the growth of our CRS contribution to the overall sales. In 2022,
spk19: The percentage of our nights sold through our direct sales channels and CRS was more than 80% and close to 60% respectively. Driven by our continuously updated lifestyle products and customer experiences, we expect CRS' contribution to sales to maintain its growth momentum in the coming quarters.
spk03: Last but not least, our retail business. While we provide comfortable and personalized accommodation for our customers, to make the hotel into an exhibition space for the trend of life. We have established a new retail business model based on the scene, to create a full-fledged solution that allows users from discovery to purchase, from accommodation to retail. In addition, we also integrate the offline scene, including our Azure App and WeChat small programs, as well as the online channels within the third-party e-commerce platform.
spk19: moving to our retail businesses. In addition to offering superb accommodations and pleasant and personalized customer experiences, we have designed our hotels to display and highlight lifestyle products, establishing an innovative scenario-based retail business that guides customers from discovery to purchase, creating a closed loop from lodging to retail. We also integrate our offline scenarios with online channels, including our mobile app and Weixin mini program, as well as other third-party platforms.
spk03: Lingzhou's business has achieved a good result in the second half of the year due to our second rise. GMV achieved RMB 3.24 billion in the whole year, which is 42% of the total growth. Among them, the third-party platform on the line has made important breakthroughs, gmv has increased by 71% during the double 11 period our adobe planet flagship store in several major e-commerce platforms are all included in the top 8 hot sales brand list of pillow products at the same time our adobe planet r90 deep sleep pillow since the launch on October 5, 2022 it has quickly become a Douyin stock the daily sales volume has exceeded 1 million As our second growth driver, our retail business performed well in 2022 despite frequent COVID outbreaks. The full year, GMV reached RMB324 million, representing a 42% year-over-year growth.
spk19: Online third-party platforms achieved breakthrough growth with an impressive 71% year-over-year increase in GMB. During the Double Eleven Shopping Festival, our Tour Planet flagship store was included in the top eight best-selling pillow brands on renowned e-commerce platforms. Furthermore, our Tour Planet R90 Deep Sleep Pillow has quickly become a blockbuster on Douyin since its launch on October 5, 2022. with peak daily GMV exceeding 1 million RMB. Going forward, we will continue to explore our customers' diverse demands in sleeping scenarios with exclusive product offerings, delivering a comfortable sleep environment for our customers while creating incremental value for our franchisees.
spk03: In 2023, we will continue to expand our hotel network, continuously enhance the operational efficiency of our business, ensure the full range of experience in Asia, Let China experience become the world view, consolidate our leading position in the high-end hotel industry. At the same time, it will continue to expand the sales business on brand promotion and channel expansion on the basis of guaranteeing profitability. And continue to invent and promote the company's overall business development. Create greater value for our users, partners, partners and shareholders.
spk19: In conclusion, as we look into 2023, we will continue to expand our hotel network and improve our operating efficiency, ensuring that we constantly deliver a tour's distinctive blend of high-quality accommodations and pleasant, personalized lifestyle experiences to each and every customer. As we reinforce our leading position in China's Upper Misco Hotel Market, we are also becoming ambassadors for the Chinese experience setting a new benchmark for ambience, comfort, and style worldwide. For our retail business, we will continue to invest in brand awareness and sales channel development following a rationale of enhanced profitability. We will also seek new opportunities with promising prospects of our comprehensive growth and development. We remain deeply committed to creating incremental value for our customers, franchisees, employees, as well as our shareholders for the long term. And now, I would like to turn the call over to our co-CFO, Mr. Wang Shoudong, to discuss our financial results.
spk05: Thank you, Mr. Wang. Now, I would like to present to you the company's financial performance for the fourth quarter and full year 2022. Our net revenues for the fourth quarter of 2022 grew by 5.8% year-over-year to 626 million RMB.
spk19: Net revenues for the full year 2022 increased by 5.4% year-over-year to 2,263 million RMB. These increases were mainly driven by the escalating revenue contribution from both the energized hotels and our retail and other businesses.
spk05: In the fourth quarter of 2022, the revenue of the hotel management is 3.65 billion yuan, with a growth of 5.4%. The revenue of the hotel management Revenues from our managed hotels for Q4 were 365 million RMB, up 5.4% year-over-year.
spk19: For full year 2022, revenues from our managed hotels increased by 11.5% from last year to 1,361 million RMB. These increases were primarily driven by the rapid expansion of our hotel network. The total number of our managed hotels increased from 712 as of December 31st of 2021 to 899 as of December 31st of 2022.
spk05: Revenues contributed by our leased hotels for Q4 were 139 million RMB, down 10.1% year-over-year.
spk19: For full year 2022, revenues from our leased hotels decreased by 12.3% to 553 million RMB year-over-year. Both decreases were primarily due to the diminished customer traffic and weakened consumption demand amid the resurgence of COVID-19 across China in 2022. The fourth quarter of 2022,
spk05: The sales and other income of 1.82 billion yuan increased by 34%. The sales and other income of 3.49 billion yuan increased by 17.6%. The main reason is that the product sales business has developed rapidly. This is due to the expansion of the Asian hotel network and the improvement of the sales brand influence and product capability.
spk19: Revenues from retail and others for the fourth quarter increased by 34% year-over-year to 122 million RMB. Full-year revenues from retail and others were 349 million RMB, an increase of 17.6% year-over-year. These increases were attributable to the rapid growth of our scenario-based retail business driven by our hotel network expansion, as well as growing recognition of our retail brand and our increasing capabilities in private label product offerings.
spk05: 接下来我们进入成本及费用部分。 Now let's move to costs and expenses. Our hotel operating costs for the fourth quarter are decreased 9.8% to 356 million RMB year-over-year. Hotel operating costs for the full year were 1,391 million RMB and decreased of 1.9% year-over-year.
spk19: These decreases were mainly attributable to our effective control of both expenses and labor costs amid the pandemic's resurgence, along with pandemic-related lease concessions we received from landlords during the period.
spk05: In the fourth quarter of 2022, the other operating costs of 68 million yuan increased by 32% and the annual cost of Other operating costs for Q4 were 68 million RMB, an increase of 32% year-over-year. Other operating costs for the full year were 187 million RMB, up 14.3% year-over-year.
spk19: These increases were mainly driven by increased costs alongside the rapid growth of our scenario-based retail business.
spk05: In the fourth quarter of 2022, sales cost of 54 million yuan increased by 30.7%. In the whole year of 2022, sales cost of 1.4 billion yuan increased by 12.7%. The main reason is that in 2022, the company increased the investment of retail business in brand promotion and channel expansion.
spk19: Selling and marketing expenses for Q4 increased by 30.7% to 54 million RMB. Selling and marketing expenses for the full year 2022 were 140 million RMB, an increase of 12.7% year-over-year. These increases were mainly driven by the increased investment in brand promotion and channel development for our scenario-based retail business.
spk05: General and administrative expenses for the fourth quarter were RMB217 million,
spk19: The full year's general administrative expenses were 350 million RMB. Excluding share-based compensation expenses of 160 million RMB, adjusted general administrative expenses decreased by 9.5% year-over-year to 57 million RMB for the fourth quarter and decreased by 3.8% year-over-year to 190 million RMB for the full year.
spk05: Our technology and development expenses for Q4 were 16 million RMB, down 8.4% year over year.
spk19: Technology and development expenses for the four-year 2022 were 66 million RMB, an increase of 27% year-over-year. The year-over-year increase was mainly attributable to our increase in investments in systematic construction in order to better support our expanding hotel network and improve customer experience.
spk05: In the fourth quarter of 2022, the net profit after adjustment is 8,100 million yuan, which is 199.8% of the total growth. Adjusted net income for the fourth quarter increased by 199.8% year-over-year to RMB 81 million.
spk19: Adjusted net income for full year 2022 was RMB 259 million, an increase of 85.6% from the previous year.
spk05: Adjusted EBITDA for Q4 was 116 million RMB, up 82.2% year-over-year. Adjusted EBITDA for the full year 2022
spk19: was 424 million RMB, up 41.9% year-over-year. 此外,亚洲保持了充足的现金流。 截止2022年底,我们的现金及现金等价物, 15.89亿元,净现金14.15亿元,同比增长52%。 Meanwhile, we have maintained a healthy cash position as of December 31st of 2022. Our cash and cash equivalents totaled 1,589 million RMB, with net cash of 1,415 million RMB, an increase of 52% year-over-year. This concludes our financial highlights for the fourth quarter and full year of 2022.
spk05: With that, let's open for Q&A.
spk13: Thank you. We will now begin the question and answer session. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. For the benefit of all participants on today's call, if you raise your question in Chinese, please immediately repeat your question in English. Please limit your questions to one at a time. If you wish to have follow-up questions, please rejoin the queue again. So once again, that's star 11 for questions. Our first question comes from the line of Xin Chen from UBS. Please ask your question, Xin.
spk08: Thank you, everyone. Thank you, everyone, for giving me a chance to ask a question. I am very happy to see the good performance of Q4 announced by the company. And just now, Mr. Ye Lv has said that Q1's red part in 2023 has returned to 115% in 2019. Now, customers are becoming more and more concerned about China Hotel, especially after the company was listed on November 11 last year. I have two questions now. The first question is, well, I actually have one question now. How big is the space for the development of the entire high-end hotel industry? How big is the market share of the entire industry? Another question is, after everyone pays attention to the high-end hotel industry, what will happen to the structure of the industry? What will happen to the market share of our company in the next five years? This is my question. I will ask you again. Investors are increasingly focused on the upper-middle-scale hotel segment, especially after Etor is a listed company in the U.S. market. What is the growth potential of the upper-middle-scale hotel segment? How much market share can the upper-middle-scale segment take in China's hotel industry? As we know, H-World and Jingjiang are also entering the upper-middle-skill hotel segment. What will the competition landscape be like? And how much market share will H-World take in the upper-middle-skill hotel segment after five years? Thank you.
spk03: Thank you, Chairman Chen. I would like to share with you our views on the development space of the entire industry. Thank you very much for this question.
spk19: So first of all, I'd like to share with you some of my opinions related to our development space and potential. First of all, the upper-mid-scale segment is actually among the quickest growth segment in the Chinese lodging industry. And also in 2022, there were 6,100 upper and mid-scale hotels. And it is estimated that this number by 2025 will become 10,000. The second is from the Chinese hotel industry.
spk03: According to the room dimension, the chain rate of Chinese hotels will continue to increase. From 2021, it is about 34%. It will increase to about 45% in 2025. This chain rate is a big trend. That is, all hotel chain companies will have a relatively large profit.
spk19: And also, second of all, I'd like to say that talking about the hospitality industry here in China, from a standpoint of rooms, we are going to see more and more train hotels here in China emerge. So the percentage of the train hotel in 2021 was 34.4%. This number will be growing to approximately 45% in 2025. And this is going to be a beneficial trend for the whole industry.
spk03: Then let's look at the schedule of high-end Chinese hotels. It should be said that the brand concentration of high-end Chinese hotels is high, and everyone's standards are not strong. It is also leading internationally. In our industry, we usually divide the competition team of high-end Chinese hotels according to several dimensions. There are three dimensions. The first dimension is the brand and scale. The second dimension is the recognition of users, including your satisfaction and return rate. The third is the return rate of the partner. According to these dimensions, Yaduo is the number one hotel brand in China.
spk19: And third of all, I would like to talk about some of the competitive landscapes. So now you can see that, you know, the upper mid-scale hotel and also the brands are having a very high concentration level. And also in China, this is also leading the rest of the world. And I would like to talk to you about this particular question in terms of three dimensions. The first one is about the brand and also scale. And the second one is about the user recognition, including satisfaction level and repurchase rate. And third of all, the reward and return to franchisees. So according to these three standards, a tour always belongs to the top-notch category in the upper-mid-scale segment here in China.
spk03: So the current market share of Asian high-end hotels is 12%. At the current stage, the Upper Minsko Hotel of Batur had the market share of 12%, and it is estimated that this figure is going to be increased to 16% by 2025,
spk19: which means that by then we're going to have 1,600 hotels. So that is making a tour as the biggest chain hotel brand in the segment of Upper Misco. Thank you. Next question, please.
spk13: Right, thank you. Our next question comes from the line of Linggang Zhang from CICC. Please ask your question, Linggang.
spk10: Mr. Li, Mr. Zhao, Mr. Wang, good evening. Thank you for giving me this opportunity to ask a question. I'm Jiang Linggang from China. First of all, congratulations on the successful completion of the IPO of Meigu last year. The business has also seen a very strong recovery in two or three years. I would like to ask two questions here. The first one is to share with management customers about the recovery status of the confidence of the homeowner we observed in the current market environment. The second one is to ask about the progress of the new contract and the new opening of the company as of now, I will ask these questions again in English. I'm Linggang from CICC. I really appreciate this opportunity to ask questions. First of all, congratulations again for successfully completing the IPO last year. And we can see the business has shown a strong recovery in the early 2023. I have two short questions. First, what is the recovery of the franchisees sentiments based on the current observation on the market? Second, would you please illustrate the pace of new hotel openings and the number of newly signed hotels since 2023? Is there a guidance for the target hotel openings for the whole year? Thank you.
spk03: Thank you, President Jiang. From our current situation, it is very clear that the confidence of the partners has been restored, especially the mature partners in the Asian system. In the first quarter, our contract progress exceeded our expectations.
spk19: Thank you, Mr. John, for your question. First of all, talking about the situation that we are having, we have been observing a very obvious sentiment recovery of our franchisees and especially those mature franchisees from the system of a tour. So in Q1, we've been actually seeing a very good progress of the contract signing which is exceeding our expectation. So we can see that among those newly signed contracts, we had about 40% of them repeatedly from our existing franchisees.
spk03: And the second point is that talking about the progress of our store opening or hotel opening in Q1,
spk19: because of the pandemic and relaxation of the control policy and almost all the population got contracted the COVID and also when they got recovered in terms of their health, many people just went back to their hometown to celebrate the holiday of the Spring Festival as well. So this actually did have a big impact on many different cycles, for instance, the construction cycle or the new hotel opening cycle as well.
spk03: Having that said, still we are confident because of our sufficient and also increasing number of hotels in the pipeline.
spk19: and also because of this particular opportunity that brought by this integration of existing markets and especially enjoyed by those projects with a very short term of construction. So this is pretty much supportive to our hotel opening target for the full year of this year, which is 280 new, which is also an year-on-year increase of 30%. Thank you. Next question, please.
spk13: Thank you. Our next question comes from the line of Ronald Leung from Bank of America. Please ask your question, Ronald.
spk09: Good evening. I'm Ronald Leung from Bank of America. Thank you for giving me the opportunity to ask a question. Actually, I only have one question. I want to see if the management team I will ask my question in English. Good evening, management. I would just like to ask about management outlook for 2023. What is management outlook for RAFPA recovery, revenue, and also profit? Thank you very much.
spk05: Thank you very much for this question.
spk19: First of all, Ator is positioned as the category of chain hotel in the segment of upper mid-scale. So without the situation of a structurized benefit and also dividend, REVPAR of Ator still maintain a very strong growth. So as for Q1, We can't actually take a look at the recovery of the single month like January or February independently because, you know, the timing of celebrating the Chinese New Year is just different in different years.
spk05: Based on our current calculation, in general, the recovery rate of the first quarter of 2023 is expected to reach 115%. The income of the first quarter is the same as that of 2022. So according to what we have now and according to our estimation and forecast as a whole,
spk19: In Q1, our REFPA recovery is going to be reaching 115%, and also in Q1, the expected revenue is going to have a year-on-year increase of 63% to 67% or so. And in 2023, for the full-year REFPA recovery, it is going to reach to the growth of high single-digit, and also the expected revenue for the full year is going to be experienced and 57% to 61% of the growth. And also, on the profit front, benefited from the economy of scale, which is going to be showing up gradually, and also due to the change in the structure of our revenues, as well as the very effective cost control methods and measures, our profitability is expected to have a continuous improvement. Next question, please.
spk13: Thank you. Our next question comes from the line of Yulin Zhong from Hightown International. Please ask your question, Yulin.
spk12: Hello, thank you for accepting my question. I am Yulin from Hightown International.
spk21: My question is about the 25th anniversary of our operation of 2,000 hotels. Yes, I think the management team can help us distinguish between brands and regions to understand which brands and regions will be opened by these 2,000 hotels. It is best to help us understand how we set this goal and how to achieve this goal. Okay, let me translate my question into English. Thank you, Benjamin, for taking my question. My question is regarding the opening targets of 2,000 hotels by 2025. Could you please break down the opening targets by brands and by regions and help us understand how do you make this plan and how could you achieve the target? Thank you.
spk03: Okay, thank you, Yulian. We have introduced the experience and scale of the double engine development in this year It is to provide users with an excellent experience in Asia At the same time, we will open 2,000 high-quality hotels in 2025. So these 2,000 are divided according to different product lines That is, our medium and high-end brands Because I have two One is Asia One is Asia X Their total amount is about 1,600 The whole of our medium-end brand is about 250 to 300 Our high-end brand, Yadoice, has about 150 companies. So this is a product division of 2,000 stores.
spk19: Thank you for your question. So let me provide the answer in this way. So this year, well, in the beginning of this year, actually, while we proposed the dual engine development strategy of combining experience and scale, we, at the same time, are providing a pleasant and comfortable living environment and personalized living environment experience to our customers. By 2025, we have also a strategic development goal of opening 2,000 high-quality hotels. So let me give you the report about the total structure of that 2,000. So breakdowns by the different level of our hotel brands. So among which, the upper mid-scale brands, including Ator and AtorX. we are going to have 1,500 to 1,600 of these two brands in the upper mid-scale by 2025, and also another 250 to 300 hotels of the mid-brand Ator Lite, and also the high-end brand Ator S, the number of which is going to become 150 to 200 also. So this is pretty much the structure of the 2,000 hotels.
spk03: So Yaduo is based on the commercial district of Xiecheng We run the whole brand or hotel layout Then we take an example of four first-tier cities There are a total of 150 commercial districts in the first-tier cities of these four cities So according to the plan of two thousand stores in 2025 By then, we will have an average of three hotels in each commercial district So the whole first-tier city is going to have 450 hotels So, second of all, I would like to say that the planning of the hotel opening of the tour
spk19: is pretty much based on the market planning of Ctrip and also the business district's distribution on Ctrip as well. So taking the first tier city as an example, so there are now four tier one cities here in China and the total number of business districts amounted to around 150 of them. So according to our plan, opening 2,000 hotels by 2025, And that means that on average, in each business district, there will be at least three hotels positioned there. So there will be around, in total, 450 hotels open in Tier 1 cities. So comparing with the planning of CITRA, for instance, 208 hotels that is bookable for each business district, our penetration rate compared with that is only 1.5%. And also, let alone in the new tier 1 and also the lower tier cities, the penetration rate is even lower.
spk03: According to the city level, we have about 450 hotels in the first line. In the new first line, we have about 650 hotels. In the second line, we have about 500 hotels. In the city below the third line, we have about 400 hotels. In other words, 80% of our hotels are in cities below the second line.
spk19: And second of all, let me tell you our detailed breakdowns. Around 450 hotels in the Tier 1 cities and 650 hotels in new Tier 1 cities and also emerging Tier 1 cities and 500 hotels in Tier 2 cities and another 400 in the third tier and lower cities. So that is to say that 80% of hotels open will be in at least Tier 2 cities and above.
spk03: As long as we have a very good branding differentiation strategy in place, and also as long as we could provide the users and customers with excellent and premium experience,
spk19: and also provide the franchisees with a very robust returns and rewards. That is speaking in each tier of the city and each location, we are going to have a very good and potential development room.
spk13: Thank you. Thank you. And that concludes the question and answer session. I'd like to turn the conference back to Queenie Chin for any additional or closing comments.
spk11: Thank you once again for joining us today. If you have any further questions, please feel free to contact us. Have a great day.
spk13: This concludes today's conference call. Thank you for participating. You may now disconnect. Thank you. you Thank you. Thank you. music music Thank you. music music Ladies and gentlemen, thank you for standing by and welcome to the Attour Lifestyle Holdings Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After speaker's presentation, there'll be question and answer session. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Queenie Chin, Senior Manager of Investor Relations. Please go ahead, ma'am.
spk11: Thank you, operator. Good morning and good evening, everyone. Welcome to our fourth quarter and full year 2022 earnings call. Joining us today are our founder, chairman, and CEO, Mr. Wang Haijun, and our co-CFOs, Ms. Zhao Rui and Mr. Wang Shoudong. Before we start, please note the discussion today will include forward-looking statements made under federal securities laws. that are subject to numerous risks and uncertainties. Actual results may differ materially from those stated or implied by our comments today. The company does not undertake any obligations to update any forward-looking statements, except as required to applicable laws. During today's call, management will also discuss certain non-GAAP financial matters for a comparison purpose only. For definition of non-GAAP financial measures and reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our website at ir.yadu.com. Now, I will turn the call over to Mr. Wang, our CEO.
spk03: Thank you, Xiangzi. Hello, everyone. Thank you for participating in Yadu Group's
spk19: Thank you, Kuni. Hello, everyone, and thank you for joining Ator's fourth quarter and four-year 2022 earnings call today.
spk03: Today is Ator's first financial call after Nasdaq's successful listing. Being a listed company is an important milestone for us. It also encourages us to never forget to try our best to bring good products and experiences to more users. Since its establishment in 2013, Yadot has always been positioned as a lifestyle brand that is based on accommodation. Starting from accommodation, we continue to deliver a warm and interesting way of life to users who pursue quality life, so that there is a warm connection between people.
spk19: This is our first earnings call following our successful listing on NASDAQ. Becoming a public company is not just an important milestone for us. It also encourages to continuously improve our products and customer experiences while building a stronger lifestyle brand. Since establishment in 2013, Ator has always been positioned as a lodging-centric lifestyle brand. We have endeavored to navigate a fashionable approach to meet the refined expectations of those who demand a high-quality lifestyle beyond accommodation and to create people-centered and hospital experiences full of joy for our customers by providing an intimate ambience where people can warmly connect.
spk03: 2022 is a year of extreme challenges. This year, we have experienced the outbreak of the epidemic in different parts of the country, and at the end of the year, we have entered a new phase of the epidemic. The three-year epidemic has brought a huge challenge to the entire accommodation industry. As the leader of the mid- and high-end hotel industry, Adore has always been actively responding, through diversified and individualized services, to meet the needs of users in special times, and bring them a comfortable and comfortable experience of living. At the same time, we continuously enrich our life-style products, and enhance the user experience. With the foundation of the method and the strong tenacity, we have endured this challenge. As the market gradually improves and quickly recovers, we are full of confidence in the continued growth of high-quality products in the future.
spk19: 2022 was a challenging year in which we experienced various degrees of pandemic outbreaks across the country. We were glad to see that new post-pandemic phase emerge at year-end. The three-year pandemic imposed great challenges on the hospitality industry as a whole. As a leading upper-mid-scale hotel chain in China, Ator proactively responded to these challenges enhancing Zephyrs to cater to customers' needs during such unusual times with memorable and personalized experiences in a safe and comfortable environment. By refining our lifestyle products and improving customer experiences across various scenarios, we weathered the challenge with fortitude and resilience. We're now in an even better position to pursue sustainable growth as market rebounds.
spk03: Today, we are very happy to announce We are delighted to announce a solid four-year performance as well as fourth consecutive year of profitability.
spk19: with total revenue for 2022 maintaining its growth momentum. I would like to take this opportunity to express our deep gratitude to our customers and franchisees for choosing and trusting Ator. Also, to our employees on the front lines who work tirelessly to ensure a safe and comfortable accommodation experience for our customers, we sincerely thank you for your perseverance and dedication.
spk03: At the beginning of 2023, Ator released a three-year development plan for 2,000 good stores in China. We will start a new year in a brand new way. Before the end of 2025, we will open 2,000 high-quality hotels to further upgrade Yaduo's fun, comfortable and individualized way of life experience. Under the guidance and drive of the experience and the double engine development plan, Yaduo aims to become the benchmark of Chinese experience.
spk19: To inaugurate 2023, we released a new three-year development plan that targets to expand our footprint as a total of 2,000 premier hotels by the end of 2025, each offering a host of standardized yet pleasant and personalized experiences. Aligned with our dual engine development plan that encompasses experience and scale, we are committed to becoming an industrial benchmark for the Chinese experience.
spk02: Next, I will introduce the specific situation of each business.
spk19: Now, let me go through the performance details across the business lines.
spk03: First of all, the hotel business. In the fourth quarter, our roll-up has returned to a level of about 80% in 2019. In November 2022, with the gradual relaxation controlled by the domestic epidemic, everyone experienced COVID-19 infection. Our business was also affected. In the beginning of 2023, the travel and accommodation demand that was suppressed quickly rebounded. The trend predicted for this market change Our hotel business development. During the fourth quarter of 2022, our ref bar achieved approximately 80% of 2019's level for the same period.
spk19: Following the lifting of pandemic restrictions in China in November 2022, a large portion of our population contracted COVID, which also disrupted our business operations. However, since the beginning of 2023, pandemic demand for travel and accommodation has started to rebound rapidly. In response to involving market conditions, we took initiative to reduce our number of requisition hotels, which is a forward-thinking move that proved very effective. Accordingly, the percentage of requests in the hotels in our hotel network decreased to 6% as of the end of December 2022 from 32% at the beginning of the month.
spk03: We saw the rapid rebound of the first quarter of the second and third years. During the seven-day holiday period of the Spring Festival, our Rollerpop returned to the leading industry, reaching 105% of the same level as in 2019. As we have progressed through the first quarter of 2023, our REVPAR has increased rapidly. As seen during the seven-day spring festival holiday, when the REVPAR attained 105% of its level for the comparable period in 2019, exceeding the overall industry level.
spk19: Consequently, We forecast that the RevPower for the first quarter of 2023 will achieve 115% of its level for the same period in 2019. As this growth momentum builds, we are confident that the company will continue to pick up in the coming quarters.
spk03: As China's leading chain of high-end hotels, Asia has gained a very good reputation for its high-end hotels, We will expand the network to focus on the core business circle of the first line, the first line and the second line cities. It not only reflects our rich industry experience and deep market insight, but also led Asia to achieve high-speed development in the past 10 years. At present, we have successfully built a high-efficiency hotel network, and completed the core of the high-end brands, from the middle to the luxury six brands.
spk19: As a leading upper MISCO hotel chain in China, Atul has earned broad recognition and a sterling brand reputation by virtue of its premium experiences and holistic comprehension of customers' preferences and desires. Our strategic decision to develop our hotel network mainly in core business districts in first- to second-tier cities not only highlights our extensive experience and deep market insight, but also empowered our rapid growth and development over the past decade. Today, we have established an effective hotel network with a distinct portfolio of six brands centered on Atour and AtourX, our two Upper Misco Hotel Brands.
spk03: In 2022, in an extremely challenging environment, we have opened 191 hotels throughout the year, with only four closed. By the end of 2022, we have hosted 932 hotels, with a total of 10.8 million rooms, with a total growth of 25%,
spk19: In 2022, we opened 191 new hotels while experiencing only four hotels closed or closures from our existing portfolio under the challenging conditions. As of December 31st, 2022, our hotel network encompasses 932 hotels with a total of 108,000 rooms, representing a rapid increase of 25% year-over-year in both hotels and rooms.
spk03: Our pipeline project is fully prepared and is still expanding, providing very good conditions for future growth. By the end of 2022, we have 363 hotels in the pipeline. At the same time, we see that single hotels are clearly emerging in the epidemic. After the epidemic, the demand for industry storage and integration has increased. We will actively grasp the opportunity to turn the tables and further consolidate our leadership position in the high-end hotel industry.
spk19: Furthermore, we manage a rich and ever-evolving pipeline of hotels under development, positioning the company to seamlessly capture and maximize future growth opportunities. As of year-end 2022, we had 363 hotels under development. On the related note, we are currently seeing high demand for industry integration as many independent hotels suffered a survive during the pandemic, offering great opportunities to augment our development pipeline. As we identify and acquire suitable properties, we will actively expand our coverage even further and solidify our leadership in the upper mid-scale segment.
spk03: Our product development base was established in Shanghai's Fengxian District in 2022. We are focused on the development and upgrade of hotel products. After months of hard work, we officially released the QingJu 3.0 water-free blue product on February 22, 2023. We have made a new upgrade to the QingJu brand. Finally, we completed our product R&D base in Shanghai in 2022
spk19: a dedicated facility specializing in the research and development of our hotel products. Following several months of persistent effort, we officially launched the Tourlite $3 version on February 22nd of 2023. This revolutionary product upgrade delivers a high-quality, more relaxed experience for Tourlite customers while offering franchisees a less capital-intensive investment opportunity. As a MISCO hotel brand in our portfolio, Atorlite is an important strategic segment that primarily centers or cases to young urban travelers seeking premium experiences. Through continuous improvements and iterations based on our keen understanding of shifting market demand, we believe we can grow an Atorlite family into our next 1,000-hotel brand.
spk03: Next, I will introduce our hotel membership plan and central booking channels. Next, let me share more details on the development of our loyalty program and our central reservation system or CRS.
spk19: Driven by our quality services and enjoyable customer experiences, our membership base has grown rapidly. By the end of 2022, we had over 35 million members, and our members' repurchase rate for 2022 further increased to 58% from 53% for 2021. Users' thickness continues to improve.
spk03: In order to return the trust of our members, we continue to enrich the rights of our members. In order to build a system that focuses on accommodation, The membership ecosystem that covers the rich lifestyle features such as culture, consumption, and social media. In June 2022, we launched a new membership plan for the new lifestyle of a card. Only in the appearance of their own brand service ability to provide more than the unique individual experience of the hotel. We will also continue to expand through a wide range of channels, including cooperation with the third party to launch joint cards and other ways to help our members.
spk19: To reward our members for their trust, we have constantly enriched our loyalty program. Our goal is to develop a scenario-based membership ecosystem offering rich lifestyle privileges covering culture, consumption, and social interactions. In June of 2022, we launched our ACART loyalty program, a new lifestyle membership brand providing unique perks and personalized experiences extending beyond hotel services. We will also amplify our efforts to attract and engage new members through extensive promotion channels, including co-memberships with third parties.
spk03: Personal members and business members have become our core members. The continuous improvement in the coverage of personal and business members has also accelerated the growth of CIS's overall revenue contribution. In 2022, our straight-line channels have accounted for more than 80%, CIS has accounted for 60%, With regards to CRS, the increasing coverage of both individual memberships and corporate customers has accelerated the growth of our CRS contribution to the overall sales. In 2022,
spk19: The percentage of our nights sold through our direct sales channels and CRS was more than 80% and close to 60% respectively. Driven by our continuously updated lifestyle products and customer experiences, we expect CRS' contribution to sales to maintain its growth momentum in the coming quarters.
spk03: Last but not least, our retail business. While we provide comfortable and personalized accommodation for our customers, to make the hotel into an exhibition space for the trend of life. We have established a new retail business model based on the scene, to make it possible for users to purchase from discovery, from accommodation to retail. In addition, we also integrate the offline scene, including our Yaduo App and WeChat small program, as well as online channels within the third-party e-commerce platform, and take advantage of the two-wheel drive on and off the line to expand our business.
spk19: Moving to our retail businesses, in addition to offering superb accommodations and pleasant and personalized customer experiences, we have designed our hotels to display and highlight lifestyle products, establishing an innovative scenario-based retail business that guides customers from discovery to purchase, creating a closed loop from lodging to retail. We also integrate our offline scenarios with online channels, including our mobile app and Weixin mini program, as well as other third-party platforms.
spk03: Lingzhou's business has achieved good results in the past two years due to the second wave of COVID-19. GMV achieved RMB 3.24 billion this year, which is 42% of the total growth. Among them, the third-party online platform has made significant breakthroughs, gmv increased by 71% during the double 11 period our adobe planet flagship store in several major e-commerce platforms are all included in the top 8 hot sales brand list of pillow products at the same time our adobe planet r90 deep sleep pillow since the launch on October 5, 2022 has quickly become a tiktok payment the daily sales volume has exceeded 1 million As our second growth driver, our retail business performed well in 2022 despite frequent COVID outbreaks. The full-year GMV reached RMB324 million, representing a 42% year-over-year growth.
spk19: Online third-party platforms achieved breakthrough growth with an impressive 71% year-over-year increase in GMB. During the Double Eleven Shopping Festival, our Tour Planet flagship store was included in the top eight best-selling pillow brands on renowned e-commerce platforms. Furthermore, our Tour Planet R90 Deep Sleep Pillow has quickly become a blockbuster on Douyin since its launch on October 5, 2022. with peak daily GMV exceeding 1 million RMB. Going forward, we will continue to explore customers' diverse demands in sleeping scenarios with exclusive product offerings, delivering a comfortable sleep environment for our customers while creating incremental value for our franchisees.
spk03: In 2023, we will continue to expand the hotel network, continuously enhance the operating efficiency of our business, ensure the full range of experience in Asia, Let China experience become the world landscape, consolidate our leading position in the high-end hotel industry. At the same time, it will continue to expand the sales business on brand promotion and channel expansion on the basis of guaranteeing profitability. And continue to discover and promote the company's overall business development. Create greater value for our users, partners, partners and shareholders.
spk19: In conclusion, as we look into 2023, we will continue to expand our hotel network and improve our operating efficiency, ensuring that we constantly deliver a tour's distinctive blend of high-quality accommodations and pleasant, personalized lifestyle experiences to each and every customer. As we reinforce our leading position in China's Upper Misco Hotel Market, we are also becoming ambassadors for the Chinese experience setting a new benchmark for ambience, comfort, and style worldwide. For our retail business, we will continue to invest in brand awareness and sales channel development following the rationale of enhanced profitability. We will also seek new opportunities with promising prospects of our comprehensive growth and development. We remain deeply committed to creating incremental value for our customers, franchisees, employees, as well as our shareholders for the long term.
spk03: Now, I would like to turn the call over to our co-CFO, Mr. Wang Shoudong, to discuss our financial results. Thank you, Mr. Wang.
spk19: Now, I would like to present to you the company's financial performance for the fourth quarter and full year 2022.
spk05: Our net revenues for the fourth quarter of 2022 grew by 5.8% year-over-year to 626 million RMB.
spk19: Net revenues for the full year 2022 increased by 5.4% year-over-year to 2,263 million RMB. These increases were mainly driven by the escalating revenue contribution from both managed hotels and our retail and other businesses.
spk05: In the fourth quarter of 2022, the revenue of the hotel management is 3.65 billion yuan, which is 5.4% of the total growth. The revenue of the hotel management Revenues from our managed hotels for Q4 were 365 million RMB, up 5.4% year-over-year.
spk19: For full year 2022, revenues from our managed hotels increased by 11.5% from last year to 1,361 million RMB. These increases were primarily driven by the rapid expansion of our hotel network. The total number of our managed hotels increased from 712 as of December 31st of 2021 to 899 as of December 31st of 2022.
spk05: Revenues contributed by our leased hotels for Q4 were 139 million RMB, down 10.1% year-over-year.
spk19: For full year 2022, revenues from our leased hotels decreased by 12.3% to 553 million RMB year over year. Both decreases were primarily due to the diminished customer traffic and weakened consumption demand amid the resurgence of COVID-19 across China in 2022. The fourth quarter of 2022.
spk05: The sales and other income of 1.82 billion yuan increased by 34%. The sales and other income of 3.49 billion yuan increased by 17.6%. The main reason is that the product sales business has developed rapidly. This is due to the expansion of the Asian hotel network and the improvement of the sales brand influence and product ability.
spk19: Revenues from retail and others for the fourth quarter increased by 34% year-over-year to 122 million RMB. Full-year revenues from retail and others were 349 million RMB, an increase of 17.6% year-over-year. These increases were attributable to the rapid growth of our scenario-based retail business driven by our hotel network expansion, as well as growing recognition of our retail brand and our increasing capabilities in private label product offerings.
spk05: 接下来我们进入成本及费用部分。 Now let's move to costs and expenses. Our hotel operating costs for the fourth quarter are decreased 9.8% to 356 million RMB year-over-year. Hotel operating costs for the full year were 1,391 million RMB and decreased of 1.9% year-over-year.
spk19: These decreases were mainly attributable to our effective control of both expenses and labor costs amid the pandemic's resurgence, along with pandemic-related lease concessions we received from landlords during the period.
spk05: In the fourth quarter of 2022, the total operating cost of 68 million yuan increased by 32 percent, Other operating costs for Q4 were 68 million RMB, an increase of 32% year-over-year. Other operating costs for the full year were 187 million RMB, up 14.3% year-over-year.
spk19: These increases were mainly driven by increased costs alongside the rapid growth of our scenario-based retail business. Selling and marketing expenses for Q4 increased by 30.7% to 54 million RMB. Selling and marketing expenses for the full year 2022 were 140 million RMB, an increase of 12.7% year-over-year. These increases were mainly driven by the increased investment in brand promotion and channel development for our scenario-based retail business. 2022第四季度管理费用2.17亿元
spk05: General and administrative expenses for the fourth quarter were RMB217 million,
spk19: The full year's general administrative expenses were 350 million RMB. Excluding share-based compensation expenses of 160 million RMB, adjusted general administrative expenses decreased by 9.5% year-over-year to 57 million RMB for the fourth quarter and decreased by 3.8% year-over-year to 190 million RMB for the full year. 二零二二年第四季度研发费用一千六百万元
spk05: Our technology and development expenses for Q4 were 16 million RMB, down 8.4% year over year.
spk19: Technology and development expenses for the four-year 2022 were 66 million RMB, an increase of 27% year-over-year. The year-over-year increase was mainly attributable to our increase in investments in systematic construction in order to better support our expanding hotel network and improve customer experience.
spk05: In the fourth quarter of 2022, the net profit after adjustment is 8,100 million yuan, which is 199.8% of the total growth. Adjusted net income for the fourth quarter increased by 199.8% year-over-year to RMB 81 million.
spk19: Adjusted net income for full year 2022 was RMB 259 million, an increase of 85.6% from the previous year.
spk05: Adjusted EBITDA for Q4 was 116 million RMB, up 82.2% year-over-year. Adjusted EBITDA for the full year 2022
spk19: was 424 million RMB, up 41.9% year-over-year. 此外,亚洲保持了充足的现金流。 截止2022年底,我们的现金及现金等价物, 15.89亿元,净现金14.15亿元,同比增长52%。 Meanwhile, we have maintained a healthy cash position. As of December 31, 2022, Our cash and cash equivalents totaled 1,589 million RMB, with net cash of 1,415 million RMB, an increase of 52% year-over-year. This concludes our financial highlights for the fourth quarter and full year of 2022. With that, let's open for Q&A.
spk13: Thank you. We will now begin the question and answer session. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. For the benefit of all participants on today's call, if you raise your question in Chinese, please immediately repeat your question in English. Please limit your questions to one at a time. If you wish to have follow-up questions, please rejoin the queue again. So once again, let's start 1-1 for questions. Our first question comes from the line of Xin Chen from UBS. Please ask your question, Xin.
spk08: Thank you, everyone. Thank you, everyone for giving me a chance to ask questions. I am very happy to see the good performance of Q4 announced by the company. And just now, Mr. Ye Lv has said that the Q1 repart in 2023 has returned to 115% in 2019. Now, customers are becoming more and more concerned about China Hotel, especially after the company was listed on November 11 last year. I now have two questions. The first question is, well, I actually have one question now. How much space does the Chinese high-end hotel industry have? How big is the market share of the entire industry? Another question is, after everyone pays attention to the Chinese high-end hotel industry, what will happen to the economy of the industry? What will happen to the market share of our company in the next five years? This is my question. I will ask you again. Investors are increasingly focused on the upper-middle-scale hotel segment, especially after Ito is listed company in the U.S. market. What is the growth potential of the upper-middle-scale hotel segment? How much market share can the upper-middle-scale segment take in China's hotel industry? As we know, H-World and Jingjiang are also entering the upper-middle-skill hotel segment. What will the competition landscape be like? And how much market share will H-World take in the upper-middle-skill hotel segment after five years? Thank you.
spk03: Thank you, President Chen. I would like to share with you our views on the development space of the entire industry. Thank you very much for this question.
spk19: So first of all, I'd like to share with you some of my opinions related to our development space and potential. First of all, the upper mid-scale segment is actually among the quickest growth segment in the Chinese lodging industry. And also in 2022, there were 6,100 upper and mid-scale hotels. And it is estimated that this number by 2025 will become 10,000.
spk03: The second one, from the Chinese hotel industry, according to the room dimension, the chain rate of Chinese hotels will continue to increase. From 2021, it is about 34%, and it will increase to about 45% in 2025. This chain rate is a big trend, which means that all hotel chain companies will have a relatively large profit.
spk19: And also, second of all, I'd like to say that talking about the hospitality industry here in China, from a standpoint of rooms, we are going to see more and more train hotels here in China emerge. So the percentage of the train hotel in 2021 was 34.4%. This number will be growing to approximately 45% in 2025. And this is going to be a beneficial trend for the whole industry.
spk03: Then let's look at the schedule of this high-end hotel. It should be said that the brand of the high-end hotel is high and everyone's standards are not strong. So it is also leading internationally. In our industry, we usually divide the competition team of the entire high-end hotel according to several dimensions. Then there are three dimensions. The first dimension is the brand and scale. The second dimension is the recognition of users, including your satisfaction and return rate. The third is the return rate of the partner. According to these dimensions, Yaduo is the first of the domestic high-end hotel brands.
spk19: And third of all, I would like to talk about some of the competitive landscapes. So now you can see that, you know, the upper mid-scale hotel and also the brands are having a very high concentration level. And also in China, this is also leading the rest of the world. And I would like to talk to you about this particular question in terms of three dimensions. The first one is about the brand and also scale. And the second one is about the user recognition, including satisfaction level and repurchase rate. And third of all, the reward and return to franchisees. So, according to these three standards, Ator always belongs to the top-notch category in the upper mid-scale segment here in China.
spk03: So, the current market share rate of Asian high-end hotels is 12%. At the current stage, the Upper Minsko Hotel of Batur had the market share of 12%, and it is estimated that this figure is going to be increased to 16% by 2025,
spk19: which means that by then we're going to have 1,600 hotels. So that is making a tour as the biggest chain hotel brand in the segment of Upper Misco. Thank you. Next question, please.
spk13: Right, thank you. Our next question comes from the line of Linggang Zhang from CICC. Please ask your question, Linggang.
spk10: Hello, Mr. Ye, Mr. Zhao, and Mr. Wang. Thank you for giving me the opportunity to ask a question. I'm Jiang Linggang from China. First of all, congratulations on the successful completion of the IPO of Meigu last year. The business also saw a very strong recovery in 2023. I would like to ask two questions here. The first is to share with management customers how the recovery of the confidence of the homeowner we observed in the current market environment is. The second is to ask about the progress of the new contract and the new opening of the company as of now, I will ask these questions again in English. I'm Linggang from CICC. I really appreciate this opportunity to ask questions. First of all, congratulations again for successfully completing the IPO last year. And we can see the business has shown a strong recovery in the early 2023. I have two short questions. First, what is the recovery of the franchisees sentiments based on the current observation on the market? Second, would you please illustrate the pace of new hotel openings and the number of newly signed hotels since 2023? Is there a guidance for the target hotel openings for the whole year? Thank you.
spk03: Thank you, President Jiang. From our current situation, it is very clear that the confidence of the joint venture owners is recovering, especially the mature joint venture owners in the Asia-Pacific system. In the first quarter, our contract progress exceeded our expectations.
spk19: Thank you, Mr. John, for your question. First of all, talking about the situation that we are having, we have been observing a very obvious sentiment recovery of our franchisees, and especially those mature franchisees from the system of a tour. So in Q1, we've been actually seeing a very good progress of the contract signing, which is exceeding our expectation. So we can see that among those newly signed contracts, we had about 40% of them repeatedly from our existing franchisees.
spk03: And the second point is that talking about the progress of our store opening or hotel opening in Q1,
spk19: because of the pandemic and relaxation of the control policy, and almost all the population got contracted the COVID, and also when they got recovered in terms of their health, many people just went back to their hometown to celebrate the holiday of the Spring Festival as well. So this actually did have a big impact on many different cycles, for instance, the construction cycle or the new hotel opening cycle as well.
spk03: Having that said, still we are confident because of our sufficient and also increasing number of hotels in the pipeline.
spk19: And also because of this particular opportunity that brought by this integration of existing markets and especially enjoyed by those projects with a very short term of construction. So this is pretty much supportive to our hotel opening target for the full year of this year, which is 280 new, which is also an increase of 30%. Thank you. Next question, please.
spk13: Thank you. Our next question comes from the line of Ronald Leung from Bank of America. Please ask your question, Ronald.
spk09: Good evening. I'm Ronald Leung from Bank of America. Thank you for giving me the opportunity to ask a question. Actually, I only have one question. I want to see if the management team I will ask my question in English. Good evening, management. I would just like to ask about management outlook for 2023. What is management outlook for RAFPA recovery, revenue, and also profit? Thank you very much.
spk05: Thank you very much for this question.
spk19: First of all, Ator is positioned as the category of chain hotel in the segment of upper mid-scale. So, without the situation of a structuralized benefit and also dividend, REVPAR of Ator still maintains a very strong growth. So, as for Q1, We can't actually take a look at the recovery of the single month like January or February independently because, you know, the timing of celebrating the Chinese New Year is just different in different years.
spk05: Based on our current calculation, in general, the recovery rate of the first quarter of 2023 is expected to reach 115%. The income of the first quarter is the same as that of 2022. So according to what we have now and according to our estimation and forecast as a whole,
spk19: In Q1, our REFPA recovery is going to be reaching 115%. And also in Q1, the expected revenue is going to have a year-on-year increase of 63% to 67% or so. And in 2023, for the full-year REFPA recovery, it is going to reach to the growth of high single-digit And also the expected revenue for the full year is going to be experienced at 57% to 61% of the growth. And also, on the profit front, benefited from the economy of scale, which is going to be showing up gradually, and also due to the change in structure of our revenues, as well as the very effective cost control methods and measures, our profitability is expected to have a continuous improvement. Next question, please.
spk13: Thank you. Our next question comes from the line of Yulin Zhong from Hightown International. Please ask your question, Yulin.
spk12: Hello, thank you for your question. This is Yulin from Hightown International.
spk21: My question is about the 25th anniversary of Hightown International. We will operate 2,000 hotels. Yes, I think the management team can help us distinguish between brands and regions to understand which brands and regions will be opened by these 2,000 hotels. It is best to help us understand how we set this goal and how to achieve this goal. Okay, let me translate my question into English. Thanks, Benjamin, for taking my question. My question is regarding the opening targets of 2,000 hotels by 2025. Could you please break down the opening targets by brands and by regions and help us understand how do you make this plan and how could you achieve the target? Thank you.
spk03: Okay, thank you, Yulian. In the beginning of this year, we proposed the double engine development of experience and scale, which is to provide users with an excellent Asian experience. At the same time, in 2025, we will open 2,000 high-quality hotels. So these 2,000 are divided according to different product lines. That is, our medium and high-end brands, because we have two, one is Asian and the other is Asian X, their total number is about 1,600. Our entire medium-end brand, Qingju, is about 250 to 300. Our high-end brand, Yadu Ice, has about 150 stores. This is a division of 2,000 stores.
spk19: Thank you for your question. So let me provide the answer in this way. So this year, well, in the beginning of this year, actually, while we proposed the dual engine development strategy of combining experience and scale, we, at the same time, are providing a pleasant and comfortable living environment and personalized living environment experience to our customers. By 2025, we have also a strategic development goal of opening 2,000 high-quality hotels. So let me give you the report about the total structure of that 2,000. So breakdowns by the different level of our hotel brands. So among which, the upper mid-scale brands, including Ator and AtorX. we are going to have 1,500 to 1,600 of these two brands in the upper mid-scale by 2025, and also another 250 to 300 hotels of the mid-brand Ator Lite, and also the high-end brand Ator S, the number of which is going to become 150 to 200 also. So this is pretty much the structure of the 2,000 hotels.
spk03: As for Yaduo, it is based on the business circle of the city and the layout of the entire brand or hotel. Let's take a four-line city as an example. There are a total of 150 business circles in the four-line city. According to the plan of 2,000 stores in 2025, we will open three hotels in each business circle on average. In this way, the whole one-line city will open 450 hotels. So, first of all, I would like to say that the planning of the hotel opening of the tour
spk19: is pretty much based on the market planning of Ctrip and also the business districts distribution on Ctrip as well. So taking the first tier city as an example, so there are now four tier one cities here in China and the total number of business districts amounted to around 150 of them. So according to our plan, opening 2,000 hotels by 2025, And that means that on average, in each business district, there will be at least three hotels positioned there. So there will be around, in total, 450 hotels open in Tier 1 cities. So comparing with the planning of CITRA, for instance, 208 hotels that is bookable for each business district, our penetration rate compared with that is only 1.5%. And also, let alone in the new tier 1 and also the lower tier cities, the penetration rate is even lower.
spk03: According to the city level, we have about 450 hotels in the first line. In the new first line, we have about 650 hotels. In the second line, we have about 500 hotels. In the third line, we have about 400 hotels. In other words, 80% of our hotels are in the second line.
spk19: And second of all, let me tell you our detailed breakdowns. Around 450 hotels in the Tier 1 cities and 650 hotels in new Tier 1 cities and also emerging Tier 1 cities and 500 hotels in Tier 2 cities and another 400 in the third tier and lower cities. So that is to say that 80% of hotels open will be in at least Tier 2 cities and above.
spk03: As long as we have a very good branding differentiation strategy in place, and also as long as we could provide the users and customers with excellent and premium experience,
spk19: and also provide the franchisees with a very robust returns and rewards. That is speaking in each tier of the city and each location, we are going to have a very good and potential development room.
spk13: Thank you. Thank you. And that concludes the question and answer session. I'd like to turn the conference back to Queenie Chin for any additional or closing comments.
spk11: Thank you once again for joining us today. If you have any further questions, please feel free to contact us. Have a great day.
spk13: This concludes today's conference call. Thank you for participating. You may now disconnect.
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