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spk15: ladies and gentlemen thank you for standing by and welcome to a tour lifestyle holdings first quarter 2024 earnings conference call at this time all participants are in the listen only mode after this week's presentation there will be a question and answer session today's conference is being recorded at this time i'd like to turn the conference over to miss allison zhang director of investor relations please go ahead ma'am
spk13: Thank you, operator. Good morning and good evening, everyone. Welcome to our first quarter 2024 earnings conference call. Today, you will hear from our founder, chairman, and CEO, Mr. Wang Haijun, and our co-CFO, Mr. Wu Jianfeng. Before we continue, please be aware that today's discussion will include forward-looking statements under federal securities laws. These statements are subject to various risks and uncertainties. and actual results may differ significantly from what is stated or implied in our comments today. The company is not obligated to update any forward-looking statements except as required by applicable laws. Additionally, during this call, our management will discuss certain non-GAAP financial measures solely for comparison purposes. For a clear understanding of these measures and a reconciliation of GAAP to non-GAAP financial results, please refer to the earnings release issued earlier today. Furthermore, a webcast replay of this conference call will be accessible on our website at ir.yaduo.com, where a copy of the results presentation is also available. Now I will turn the call over to Mr. Wang, our CEO.
spk03: Thank you, Allison.
spk16: Hello, everyone, and thank you for joining Tours' first quarter 2024 earnings call today.
spk03: In the first quarter of 2024, the demand for market travel has declined. Business travel has been affected by uncertainties and other factors, and has been recovering relatively slowly. Experience-based leisure travel has continued to perform well for two or three years on holidays and weekends. During the first quarter of 2024,
spk16: the travel market witnessed contrasting demand patterns. While the recovery of business travel was relatively subdued due to macro uncertainties, experience-driven leisure tourism during holidays and weekends maintained its growth momentum from 2023. As a leading upper-mid-scale hotel brand, Atul remains dedicated to advancing the comprehensive upgrade of its experience strategy amid the ever-evolving external environment. By delivering exceptional accommodation experiences, we unleashed a greater value across our unique deep sleep scenarios. We also continued to enhance and upgrade our products and services, solidifying a tour's leading position in the industry.
spk03: Now, I would like to provide more details on our performance for the first quarter of 2024. 首先是住宿业务,请大家翻到 我们PPT的第四页。 一季度,我们的RAWRPA达到328元,为23年同期的97.4%。 Let's begin with our hotel business.
spk16: please turn to slide four of our first quarter 24 results presentation. Our REVPAR reached RMB 328 grand in the first quarter, representing 97.4% of its level in the same period of 2023. Notably, we achieved a sustainable OCC growth reaching 101.1% of 2023's level for the same period, demonstrating a tour's resilient demand and a leading competitiveness. However, due to a high comparison base resulting from the explosive demand for both business and leisure travel in the same period of 2023, Our ADR faced some pressure in the first quarter and decreased by 2.9% year-over-year. Please turn to page 5.
spk03: To eliminate the structural impact of new electricity, we support the stable performance of more than 18 months of mature electricity. In the first quarter, the same power and same ratio of RORPAR reached 99.7% of the same level in the same period of 23 years.
spk16: Please turn to slide 5. Excluding structural impacts such as the ramp-up of new hotels, our mature hotels in operation for more than 18 months performed well during the quarter. Their same hotel, RAF Park, was 99.7%. of 2023's level for the same period, while OCC reached 102%, and ADR stood at 98.4%, both compared to the same period in 2023. Please turn to the sixth page.
spk03: With the continuous improvement of brand influence, our hotel network continues to expand in the first quarter and achieve high quality growth. The first quarter continued the trend of fast opening in the fourth quarter of last year, with a total of 97 hotels in the new business. By the end of the first quarter, the number of hotels in Yaduo has reached 1,302, which is 34.5%. Last month, the number of hotels in Yaduo's single brand also reached 1,000.
spk16: Please turn to slide six. Supported by Ator's increasing brand influence, our hotel network continued to expand and achieved high-quality growth in the first quarter. We maintained our rapid pace in network expansion with 97 new hotel openings. By the end of the first quarter, we had a total of 1,302 hotels in operation, representing a 34.5% increase year-over-year. Notably, our flagship Attour brand reached the 1,000-hotel milestone last month, underscoring our leading position in the upper-mid-scale hotel market.
spk03: Please turn to page 7. Please turn to slide 7. Moreover, franchisees' confidence remained robust in the first quarter, with a continuous increase in new signings and steady pipeline growth.
spk16: As of March 31st, the number of hotels under development reached 674.
spk03: with the opening of QingJu 3.0 Hotel reaching 36. The mature store is performing well. In the first quarter of the traditional season, the roll-up of 3 months of QingJu 3.0 Hotel was more than 290 yuan, and quickly increased to more than 300 yuan in April, revealing the strong product competitiveness of QingJu 3.0 in the mid-end market. We believe that in the coming summer,
spk16: Please turn to slide 8. Thanks to its unique positioning and immense growth potential, Attourlite 3.0 continued to gain favor among franchisees. A total of 30 new Attourlite 3.0 hotels were signed in the first quarter, accounting for more than 15% of our total new signings for the period. As of March 31st, we had a total of 36 Atorlite 3.0 hotels in operation, with mature hotels' performances thriving. Despite the traditional off-season, the rev par of Atorlite 3.0 hotels in operation for more than three months exceeded RMB 290 in the first quarter and surged to over RMB 300 in April. highlighting Attourlite's strong competitive edge in the mid-scale segment. We anticipate that the operational performance of Attourlite 3.0 will continue to excel during the upcoming summer holiday season.
spk03: Please turn to page 9. Surrounding the concept of self-sufficient new life, we continue to refine and launch the service of Greenhouse Specialty. Our goal is to build every Greenhouse 3.0 hotel In the city of Haizhong, the first quarter of the city of Qingzhu, the new line leads users to explore the food and play around the hotel, so that users can enjoy and live in Qingzhu. In addition, we also launched a special service product in the gold field of Qingzhu to create exclusive membership benefits. As of now, all services in Qingzhu 3.0 are leading in the middle-class hotel brand.
spk16: Please turn to slide nine. Building upon our ethos of life at ease, we are consistently introducing and refining distinctive services at Attouralight 3.0 hotels, striving to transform each hotel into an intimate oasis within its city. In the first quarter, we launched the new city guide feature. which helps customers explore nearby dining, entertainment, and other attractions, immersing them in the captivating lifestyle and the beautiful, enjoyable, and comfortable experiences that are unique to Attouralight 3.0 hotels. Furthermore, we unveiled special platinum privileges in our Attouralight 3.0 hotels, offering our members exclusive benefits. Presently, Atorlite 3.0's comprehensive range of superior services sets the brand apart in the mid-scale market.
spk03: Furthermore, we expanded Atorlite 3.0's co-branded collaborations. For the post-Chinese New Year return to work period and the peak interview season,
spk16: We partnered with a fashion clothing brand to introduce the Suit Up Station event. This initiative, offering convenient suit rental services to a tour light's customers, garnered widespread praise. It not only boosted a tour light's brand visibility, but also addressed the needs of young business travelers during their trips. conveying a distinctive lifestyle and further strengthening the quintessential Attour Signature experience.
spk03: Next is our retail business. Please turn to page 10. Retail business continues to grow strongly in the first quarter. GMV reached 4.95 billion, which is a 277% increase. The performance of online channels is still strong.
spk16: Moving now to our retail business. Please turn to slide 10. Retail sustained its strong performance in the first quarter with quarterly GMV up by 277% year over year to RMB $495 million. Sales from online channels continued to flourish accounting for over 90% of the total GMV in the first quarter.
spk03: Ator's deep sleep products
spk16: continued to attract high market recognition, we are devoted to understanding the deep sleep scenarios, identifying customers' sleep pain points, and continuously developing and launching new products. Through the expansion of our product categories, we aim to provide customers with enhanced solutions for an optimal deep sleep experience.
spk03: Please turn to page 11. After a wide range of popular sponsored products such as Yaduo's deep sleep pillow Pro and deep sleep cooling quilt, we use the product self-explanatory model to dig into the core needs of users for cooling quilt. On March 10 this year, Zhongbang launched another new product of the deep sleep series, deep sleep cooling quilt. Our quilt uses imported breathable and damp fiber, which can support heat dissipation and naturally produce coolness for user creation. In addition, in order to create a more comfortable and skin-sensitive deep-sleeping experience for users, we abandoned the traditional quilt and quilt design and used a double-sided material with different cold-sensitive values on the deep-sleep cooling quilt. The A and B sides are made of natural cold-sensitive fabric and naked fabric that is close to the skin's water-coating rate, allowing users to adjust the cold-sensitive texture at any time according to their needs. Please turn to slide 11. Following the success of our popular products like Deep Sleep Pillow Pro and the Deep Sleep Temperature Control Quilt,
spk16: We leveraged our proprietary product development process to delve deeper into customers' fundamental needs for lightweight bedding during the summer season. On March 10th of this year, we proudly introduced another standout addition to our DeepSleep series, the DeepSleep Lightweight Comforter. Crafted from imported breathable and moisture wicking fibers, the core of our lightweight comforter enables efficient heat dissipation, fostering a natural sense of coolness for customers. Moreover, to elevate the deep sleep experience with superior comfort and touchability, we departed from the conventional design of a comforter with a removable cover. Instead, our one-piece comforter is reversible, with A and B side made from distinct materials. The A side features natural cooling fabrics while the B side is fashioned from a cozy fabric with moisture content akin to human skin, allowing customers to quickly switch from cooling to warmth. Because the integrated cover design imposes heightened cleaning and maintenance requirements, Our deep sleep lightweight comforter is machine washable and it can be air or machine dried at low temperatures, bringing customers an easy care, minimalist deep sleep experience.
spk03: 亚朵星球深睡夏凉被上市后获得广泛的消费者好评。 上市21天,GMV便快速突破千万,并继续保持强劲的增长势头。 Since its debut, the Atul Deep Sleep Lightweight Comforter has garnered widespread acclaim. Its GMV sword passed RMB 10 million just 21 days after its release and continues to maintain robust growth momentum.
spk16: In April, the DeepSleep Lightweight Comforter topped the sales charts for comforters on both Douyin and JD.com and ranked among the top 10 in sales on Tmall.
spk03: The sales of DeepSleep Lightweight Comforter once again confirmed Yaduo's profound insight and understanding of DeepSleep, as well as its effective product development capabilities. We will continue to provide users with better sleeping conditions,
spk16: The surgeon sales of our DeepSleep Lightweight Comforter are yet another testament to Ator's profound insights and exceptional understanding of DeepSleep, as well as our efficient product research and development capabilities. We are passionate about enhancing customers' sleep experience and remain dedicated to crafting innovative, upgraded solutions to amplify customers' recognition of the Attour Planet Deep Sleep series.
spk03: It has attracted more and more users to join the A-Card membership system in Asia. The membership size is rapidly expanding. As of March 31, our registered membership has exceeded 71 million, with an increase of 86%. In addition, our CIS channels have maintained a steady growth in the first quarter. The CIS channel sales and business ratio is 65.1%, with an increase of 2.6%.
spk16: Transitioning to our membership business, please turn to slide 12. Our thriving brand recognition, coupled with our top-tier products and services, has inspired a growing number of customers to join the ACARD membership program, leading to a rapid expansion of our membership base. As of March 31st, Our registered individual members increased by 86% year-over-year, surpassing 71 million. Additionally, our CRS channel experienced steady growth in the first quarter, with a 65.1% contribution to the total room nights sold in the first quarter, increasing by 2.6 percentage points from the same period of last year.
spk03: In addition, we will continue to promote the integration of the AADO dormitory member and retail member system, and further build a fully unified AADO A-Card member ecosystem. Please turn to page 13. We plan to open a multi-channel member's points and rights, and immerse all users in a unified A-Card member system, and continue to strive to dig into the opportunity of product and service innovation, In addition,
spk16: We have continued to promote the integration of both accommodation and retail members, further solidifying the foundation of our comprehensive and unified ACARD membership ecosystem. Please turn to slide 13. We plan to offer multi-scenario membership points and benefits, thus funneling customers from different scenarios into the unified ACARD membership system. We will also identify and push the boundaries of product and service innovation. Together, these initiatives will create an integrated membership experience for our customers while enhancing ACAR's brand recognition, ultimately empowering us to create a virtual cycle and achieve greater synergies between the accommodation and retail business. Meanwhile, We will leverage our growing customer insights to provide our customers with more tailored product recommendations and personalized offline accommodation experiences, thereby strengthening Ator's experiential advantages.
spk03: Finally, I am very proud to announce that we have officially released Ator's first ESG report. Please turn to page 14. As the leader of quality of life, the founder of the experience of China, ADO always upholds the business concept of ecological coexistence, working hard to integrate the best practice of ESG into our daily business. In 2023, we will further strengthen the ESG management of the company, only to promote a more warm connection between people and people and people and nature. We work hard to establish efficient, efficient and responsible management mechanisms, Last but not least,
spk16: I am delighted to announce that Ator has published its inaugural ESG report. Please turn to slide 14. As a leader in providing a quality lifestyle and an advocate for the Chinese experience, Ator consistently pursues win-win outcomes for the environment. Our industry and society as a whole by integrating ESG best practices across our business operations. In 2023, we further enhanced our ESG governance to help build warm connections between people as well as between people and nature. We strove to establish an efficient, orderly, and responsible management mechanism and foster mutual growth among and toward our employees, franchisees, and partners. Through a broad array of charitable projects, eco-friendly operational upgrades, diversity and inclusion initiatives, and green development efforts, we upheld our original aspirations while assuming our corporate social responsibility. Moving forward, we will holistically deepen our commitment to ESG, augmenting our contributions to society and the industry's sustainable development. Now, I will turn the call over to our co-CFO, Mr. Wu Jianfeng, to discuss our financial results.
spk05: Thank you, Haijun. Good morning and good evening, everyone. Now, I would like to present the company's financial performance for the first quarter of 2024. Please turn to slide 16 of the results presentation. Our net revenues for the first quarter of 2024 grew by 89.7% year-over-year and decreased by 2.5% quarter-over-quarter to RMB $1,468 million. The year-over-year increase was driven by robust growth in both the hotel and retail businesses. The quarter-over-quarter decrease was caused by the decrease in RAPA, which was RMB $328 for the first quarter of 2024, compared with RMB 358 for the previous quarter, and also was due to the renovation of one of our least hotels. Revenue from our miniaturized hotels for the first quarter of 2024 were RMB 836 million, up by 87.1% year-over-year, while decreasing 1.8% quarter-over-quarter. The year-over-year increase was primarily fueled by the ongoing expansion of our hotel network and the rapid growth of the supply chain business. The total number of monetized hotels increased to 1,271 as of March 31, 2024, up by 35.9% year-over-year. The quarter-over-quarter change was due to the decrease in REPA. REPA of our miniaturized hotels was RMB 324 for the first quarter of 2024, compared with RMB 353 for the previous quarter. Revenues contributed by our leased hotel for the first quarter of 2024 were RMB 168 million, representing a decrease of 10.3% year-over-year and 13.8% quarter-over-quarter. This decline was mostly driven by the renovation of one of our least hotels into our first 204.0 hotel, as well as the decrease in repa. Repa of our least hotels was RMB 455 for the first quarter of 2024, compared with RMB 464 for the same period of 2023. and RMB 495 for the previous quarter. Revenues from our retail business for the first quarter of 2024 were RMB 417 million, up by 268.9% year-over-year and 1.1% quarter-over-quarter. The increases were attributable to the widespread recognition of our retail brands and the compelling product offerings. as well as improved product development and distribution capabilities. Revenues from other for the first quarter of 2024 will be 48 million, up by 76.8% year-over-year and 1.7% quarter-over-quarter. The increases were driven by the fast-growing membership business. Now let's move to cost and expenses. Please turn to slide 17. Operating costs and expenses for the first quarter of 2024 were RMB 1,154 million, including RMB 3 million share-based compensation expenses, compared with RMB 719 million, including RMB 142 million share-based compensation expenses for the same period of 2023. Hotel operating costs for the first quarter of 2024 increased by 73.5% year-over-year, and decreased by 9.7% quarter-over-quarter to RMB 662 million. The year-over-year increase was mainly due to the increase in variable costs, such as supply chain costs associated with the ongoing expansion of our hotel network. The gross margin of our hotel business was 34.1% for the first quarter of 2024, compared with 39.8% for the same period of 2023. This decrease was attributable to a decreased RAPA and an increased share of revenue generated by the lower margin supply chain business. Retail cost for the first quarter of 2024 increased by 235.0% year-over-year and decreased by 11.2% quarter-over-quarter to RMB 206 million. The year-over-year increase was associated with the rapid growth of our retail business The growth margin of our retail business was 50.5% for the first quarter of 2024, compared with 45.5% for the same period of 2023. The increase in growth profit margin of retail business was attributable to an increasing contribution from higher margin online sales. Now please turn to slide 18. For selling and marketing expenses for the first quarter of 2024 were RMB 175 million, compared with RMB 56 million for the same period of 2023. The increase was mainly due to our increased investment in brand awareness and effective online channel development, along with the growth of retail business. Setting and marketing expenses accounted for 11.9% of net revenues for the first quarter of 2024, compared with 7.2% for the same period of 2023. General and administrative expenses for the first quarter of 2024 were RMB 77 million, including RMB 3 million share-based compensation expenses, compared with RMB 193 million including RMB 141 million share-based compensation expenses for the same period of 2023. Excluding the share-based compensation expenses, the increase was primarily due to the increase in labor cost. General and administrative expenses, excluding the share-based compensation expenses, accounted for 5.0% of revenue for the first quarter of 2024, compared with 6.7% for the same period of 2023. Technology and development expenses for the first quarter of 2024 were RMB 24 million, compared with RMB 17 million for the same period of 2023. The increase was mainly due to the increased investment in technology systems and infrastructure to support our expanding hotel network and retail business. as well as improve the customer experience. Technology and development expenses accounted for 1.6% of net revenues for the first quarter of 2024, compared with 2.2% for the same period of 2023. Now please turn to slide 19. Adjusted net income for the first quarter of 2024 was RMB 261 million. up by 63.4% year over year. Adjusted net profit margin for the first quarter of 2024 was 17.8%, a decrease of 2.9 percentage points year over year. Adjusted EBITDA for the first quarter of 2024 was RMB 354 million, up by 53.1% year over year. Adjusted EBITDA margin for the first quarter of 2024 was a decrease of 5.8 percentage points year-over-year. The decreases in both margins were primarily due to the decrease in RAPR and the increased revenue contribution from lower-margin supply chain business, as well as organic growth of selling and marketing expenses amid the retail business development. Now please turn to slide 20 and 21. Notably, we have maintained a healthy cash position with stable growth momentum. As of March 31, 2024, our cash and cash equivalents totaled RMB 3,048 million. Among them, net cash was RMB 2,956 million. That concludes our financial highlights for the first quarter of 2024. With that, that's open for Q&A.
spk15: Thank you. We will now begin the question and answer session. To ask a question, please press star 11 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. For the benefit of all participants on today's call, if you have raised 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. Once again, that's star 11 for questions. Our first question comes from the line of CICC's Sijie Lin. Please go ahead, Sijie.
spk10: I'll translate my question into English. So thank you, management. Congrats on the very fast hotel opening into one. The 97 new openings almost achieved the highest quarterly level last year, and the revenue growth is also big. So will we adjust the full year opening revenue and profit guidance accordingly? Thank you.
spk05: Okay, thank you, Siqi. Let me answer your question. Although we see some fluctuations in the rep part of the industry in the first quarter, from the point of view of businesses, we still have a lot of confidence in the hotel industry. Thank you, Sijie.
spk16: Let me try to answer your question. Although we saw some fluctuations in the rev part of the entire industry in the first quarter this year, but from the franchisee's level, confidence in the hotel industry is still sufficient. And our signings in the first quarter also maintained rapid growth. And the projects in our pipeline continued to expand, reaching 674.
spk05: From the opening of the store, we opened 97 stores in the first quarter, which continued our rapid trend in the fourth quarter of last year. This year, based on our strategic goal of 2,000 good stores in 2025, we will raise the quality of the stores to a higher level and increase the quantity of good stores. In terms of new openings, in this first quarter, we opened 97 new hotels, continuing the trend in fourth quarter last year. This year, based on the strategic targets of having 2,000 premier hotels by 2025,
spk16: we will put forward higher requirements for quality and consider quality as a prerequisite for quantity growth. Based on this, we would like to maintain our target of 360 new openings for the full year, and we stay fully confident about achieving that.
spk05: In terms of revenue, although we see some fluctuations in RAPA, we expect the company's revenue in 2024 to maintain a high-quality growth. In terms of revenue, despite some fluctuations in REVPAR we saw, we still expect the group's 2024 revenue to maintain a high-quality growth
spk16: And based on the outstanding performance in the first quarter, especially in our retail business, we would like to raise this year's revenue guidance from what we announced the last quarter. The original 30% year-on-year growth to a new growth of 40% year-on-year, maintaining a growth rate leading the industry. This is mainly due to the continued expansion of our hotel network and the contribution of our rapidly growing retail business. At the profit level, the fluctuation of the overall REVPAR and the change of the company's revenue structure this year will bring certain pressure on our profit margin level. However, we will continue to optimize our cost structure, improve the efficiency of management and operations, and we expect to keep a relatively stable profit margin level. Thank you.
spk15: okay thank you thank you let's take next question thank you our next question comes from the line of dan chi from morgan stanley please ask your question dan uh thank you thank you uh
spk06: Please allow me to translate my questions. Can the management share the recent blended REFPA trend in second quarter and in particularly occupancy and ADR's respective performance? And what's the company's most updated view on your blended REFPA for full year 2024? Thank you. Okay, thank you, Dan.
spk03: Let me answer this question. The company's first quarter REFPA was 328 yuan. Last year, it fell by about 9 yuan. Thank you, Dan. Let me try to answer your questions. Our rev par in first quarter was RMB 328 yuan, which was down by RMB 9 yuan compared to the same period last year.
spk16: OCC was 73.3%, 0.8 percentage point higher than the same period last year. ADR was RMB 430, down by RMB 13 from the same period last year.
spk03: If we look at our 843 companies, we have data of the same power and same ratio over 18 months. The performance of the same power and same ratio and the same period last year is basically the same.
spk16: If we narrow down to our 843 mature hotels in operation for more than 18 months, the same hotel ref pod performance in first quarter this year stood at 99.7%, which was basically unchanged from last year. 那么拆分这个OCC和ADR的各自表现来看,
spk03: To separate OCC and ADR performances,
spk16: Last year's concentrated bursts of business and leisure travel to a certain extent drove the price base higher and imposed relatively more pressure on this year's price. Since April, including the Labor Day holiday, we have also seen such a situation. According to QTD data, our Q2 RevPar might have bigger pressure than in Q1.
spk03: For the year-round RORPA prediction, the performance of RORPA will be affected by a variety of factors. It may be a little difficult to give a relatively accurate prediction. From the current perspective, we believe that the uncertainty of the year is beyond our previous expectations. Under the current environment, our gene strategy will primarily stabilize the basic version of OCC, but at the same time, we will also capture some key revenue opportunities. Thank you.
spk16: As for the forecast on 2024 whole-year RevPar, due to multiple factors affecting its performance, it is rather difficult to give a relatively accurate RevPar forecast. Seeing from now, the uncertainty of this year exceeds our previous expectation, and in this current environment, our strategy is to prioritize stabilizing our OCC base while also sees the core opportunities in revenue.
spk13: Thank you, Dan.
spk15: Next question, please. Thank you. Our next question comes from the line of Xin Chen from UBS. Please ask your question, Xin.
spk07: My question is about our retail. I saw that in the first quarter, which is a relatively short-lived quarter, the company's retail revenue has remained very strong. Can you share with the management team the expectations for retail business revenue throughout the year, as well as the investment expectations in retail sales? And on the product level, I would also like to ask about the sales of the company in March. It looks very good. Can you share with the company about the subsequent product planning? We noticed that in Q1, relatively, more often than not, the company's revenue from V2 business still maintained a very strong growth. Would the company mind sharing your expectations on V2 revenue over the whole year and your expectations on sales expenditure in V2 business? The next question is that on the product level, a quick launch that you much achieved good results. Could you share about some follow-up planning on products?
spk03: Thank you. Okay, thank you, Chen Xin. I will now talk about the overall business and product planning of retail. I will add to the financial situation later. I think retail is an action based on the real need for sleep for users. Today, we will see that the deep-sea products of Ador Planet can continue to gain the likes and recognition of users. I think these also promote the continuous bright performance of our retail business. Based on the research and development ability of the products that users need, I think the outstanding performance of the new product of Xia Liangbei this time, I think it has been verified again. So this year, we will continue to focus on our deep-sea products. Thank you, Chen Xin.
spk16: Let me first talk about the overall retail business and product planning, and then I'll pass it on to Jianfeng to add on retail financials later. I think based on our insights into the real sleep needs for users, our strategy with Atorplanet's deep sleep products has been kept on becoming known to people outside of the hotel industry and continued to gain users' fondness and recognition. and that promoted the excellent performance of our retail business. Our product R&D capacity based on user needs has been verified once again by the outstanding performance of our new product this quarter, Deep Sleep Lightweight Comforter. This year and the next quarters, we will continue to focus on Deep Sleep products and carry on launching the next generation of Deep Sleep pillows, or deep sleep temperature control quote in the next coming quarters. While continuing to expand the sleep categories, we will also be continually deepening and solidifying our advantages categories. Now, Jianfeng, could you please add some more onto the retail financials?
spk05: Okay. Regarding the performance of retail finance, our first quarter retail revenue reached 4.17 billion yuan, which is still a fast-growing trend. Based on the strong performance of the whole retail business in the first quarter, we expect that our retail business's annual income will achieve a high double-digit growth. At the same time, our retail business is still in a fast-growing period. We will deepen our investment in the construction of its basic capabilities, including brand promotion and channels. According to the sales cost mentioned just now, the retail business in the first quarter has still achieved a relatively high-efficiency investment and promotion. In the next few seasons, its sales costs will fluctuate with the pace of our entire new product, including some of these brand promotion plans, but it is expected that it will remain at a relatively stable level throughout the year. We also believe that with the growth of our retail business scale, our retail business profit rate level is also continuing to improve. We are confident that our retail business can bring more and more of this kind of increase in revenue and ecological value to the group.
spk16: Thank you, Chengxin. Our retail revenue in the first quarter reached RMB 417 million, maintaining a rapid growth momentum. Based on that strong retail performance, we do expect our retail business to achieve high double-digit year-over-year revenue growth for the full year. Meanwhile, our retail business is still in a process of rapid development. And that means we will continue to deepen investment in building a solid foundation for longer-term growth, branding, and channels. In terms of the sales expenditures you mentioned in your question, Chenxin, our retail business in first quarter coordinated campaigns and promotions with high efficiency. The sales expenses in the next few quarters will fluctuate slightly. echoing to our rhythm in new product launches and plans on branding campaigns, but it is expected to maintain a relatively stable level for the full year. Now that with our grown scale of retail business, its margin level has been continually improving, and we are confident that the retail business will bring more incremental earnings to the group and more value to our ecosystem. Thank you.
spk13: Thank you. Next question, please.
spk15: Thank you. The next question comes from Ziwei Liu from Citix. Please ask your question, Ziwei.
spk01: Hi, everyone. I'm Liu Ziwei.
spk08: Regarding the hotel business, I would like to ask you about it. As Haijun mentioned, the current business of Qindy 3.0 is very good. So I would like to ask you about the opening targets of Qindy 3.0 this year. In addition, do you have any progress or detailed details to share with us about the 4.0 hotel in Asia? I just did my question. About the hotels, could you please share the opening goals for Tour Life 3.0 this year, and also an update on how the Tour 4.0 hotels are coming along? Thanks.
spk05: Okay, Jiwei, I'll answer your question. For 3.0, we signed 30 hotels in the first quarter, which is more than 15%. Thank you, Jiwei. Let me answer that question of yours. In first quarter, there was a total of 30 signings for a tour like 3.0, accounting for more than 15% of our total new signings. As of the end of March,
spk16: 36 Atollite 3.0 hotels are in operation. We expect that by the end of this year, the number of Atollite 3.0 hotels in operation will reach about 100.
spk05: As Haijun mentioned in the introduction, we have a concept of self-sufficiency in 3.0. We are constantly refining and upgrading the services of the features of QingJu to better meet the needs of young business owners and to gain the recognition of users. Therefore, the performance of QingJu 3.0 is very outstanding. In the first quarter of the traditional third quarter, the wrap-up of 3.0 in three months is more than 290 yuan.
spk16: Like Haijun just now have mentioned, we focus on the concept of life at ease and consistently introducing and refining distinctive services at Atorlite 3.0 hotels to better meet the needs of young business travelers and want their recognition. Atorlite 3.0 hotels have had eye-catching performances, In the first quarter, a commonly off-season, the REV part of those tour-like 3.0 hotels in operation for three months above had exceeded RMB 290,000 in the first quarter and quickly rose to above RMB 300,000 in April, far exceeding the expectations from those franchisees.
spk05: At the same time, based on the operation status and user feedback we gathered from those Atualight 3.0 hotels in operation,
spk16: We are gradually refining the Attourlite 3.0 model to bring better and better experience to users while also bringing sustainable and stable returns to the franchisees. 另外你也提到了亞洲的4.0,那自去年年底發布以來,目前我們已經在重點城市的核心商圈圈定了超過30個的標端項目。
spk05: And you mentioned our Atul 4.0. Since Atul 4.0's launch at the end of last year, we have secured more than 30 benchmark projects in the core business areas of key cities.
spk16: The opening of the first Atua 4.0 hotel is also in busy preparation and will happen soon. It will be worth your waiting. Thank you.
spk13: Thank you, Jiwei. And operator, we can take one more question. Thank you.
spk15: Thank you. Our final question comes from the line of Lydia Lin from Citi. Please ask your question, Lydia.
spk09: Hello, Manager Chen. Thank you for giving me the last chance to ask a question. I would like to ask Manager Chen if there are any new plans that you can share with us in terms of shareholding. Thank you, Manager Chen. I would like to ask if the management has any plans in terms of the returns to shareholder. Thank you.
spk05: Okay, Lydia. Thank you for your question. In terms of shareholding, it is also a point that we have always paid great attention to. Last August, we made a one-time shareholding. Thank you, Lydia. In terms of shareholder returns, we have always attached importance to and practiced continuous returns to shareholders. In August last year, we announced a one-time dividend
spk16: This year, we will continue to act upon the overall operating performance, cash position, future business development plan, industry common practices, and to consider plans to increase shareholder returns, including dividends. We are committed to sharing the benefits of development with our shareholders. Thank you.
spk12: Thank you, Lydia.
spk15: Thank you. And that concludes the question and answer session. I'd now like to turn the conference back to Alison John for any additional or closing comments.
spk13: Thank you all for joining us today. If you have any further questions, please feel free to contact our IR team. We look forward to reconnecting with you next quarter. Thank you and goodbye.
spk15: This concludes today's conference call. Thank you for participating. You may now disconnect. Thank you. Bye. Ladies and gentlemen, thank you for standing by and welcome to Attour Lifestyle Holdings first quarter 2024 earnings conference call. At this time, all participants are in the listen-only mode. After this week's presentation, there will be a question and answer session. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Alison Zhang, Director of Investor Relations. Please go ahead, ma'am.
spk13: Thank you, operator. Good morning and good evening, everyone. Welcome to our first quarter 2024 earnings conference call. Today, you will hear from our founder, chairman, and CEO, Mr. Wang Haijun, and our co-CEFO, Mr. Wu Jianfeng. Before we continue, please be aware that today's discussion will include forward-looking statements under federal securities laws. These statements are subject to various risks and uncertainties. and actual results may differ significantly from what is stated or implied in our comments today. The company is not obligated to update any forward-looking statements except as required by applicable laws. Additionally, during this call, our management will discuss certain non-GAAP financial measures solely for comparison purposes. For a clear understanding of these measures and a reconciliation of GAAP to non-GAAP financial results, please refer to the earnings release issued earlier today. Furthermore, a webcast replay of this conference call will be accessible on our website at ir.yaduo.com, where a copy of the results presentation is also available. Now I will turn the call over to Mr. Wang, our CEO.
spk03: Thank you, Allison.
spk16: Hello, everyone, and thank you for joining Tours' first quarter 2024 earnings call today.
spk03: In the first quarter of 2024, the demand for market travel has declined. Business travel has slowed down due to the impact of uncertainties and other factors. Experience-based leisure travel has continued for two or three years on holidays and weekends. During the first quarter of 2024,
spk16: the travel market witnessed contrasting demand patterns. While the recovery of business travel was relatively subdued due to macro uncertainties, experience-driven leisure tourism during holidays and weekends maintained its growth momentum from 2023. As a leading upper-mid-scale hotel brand, Atul remains dedicated to advancing the comprehensive upgrade of its experience strategy amid the ever-evolving external environment. By delivering exceptional accommodation experiences, we unleashed greater value across our unique deep sleep scenarios. We also continued to enhance and upgrade our products and services, solidifying a tour's leading position in the industry.
spk03: Now, I would like to provide more details on our performance for the first quarter of 2024. 首先是住宿业务,请大家翻到我们PPT的第四页。 一季度,我们的roll-up达到328元,为23年同期的97.4%。 Let's begin with our hotel business.
spk16: please turn to slide four of our first quarter 24 results presentation. Our rough par reached RMB 328 grand in the first quarter, representing 97.4% of its level in the same period of 2023. Notably, we achieved a sustainable OCC growth reaching 101.1% of 2023's level for the same period, demonstrating a tour's resilient demand and a leading competitiveness. However, due to a high comparison base resulting from the explosive demand for both business and leisure travel in the same period of 2023, Our ADR faced some pressure in the first quarter and decreased by 2.9% year-over-year. Please turn to page 5.
spk03: To eliminate the structural impact of new electricity climbing, we support the stable performance of mature酒店 for more than 18 months. In the first quarter, the roll-up of the same electricity and the same ratio reached 99.7% in the same period of 23 years.
spk16: Please turn to slide 5. Excluding structural impacts such as the ramp-up of new hotels, our mature hotels in operation for more than 18 months performed well during the quarter. Their same hotel, Rav Park, was 99.7%. of 2023's level for the same period, while OCC reached 102%, and ADR stood at 98.4%, both compared to the same period in 2023. Please turn to the sixth page.
spk03: With the continuous improvement of brand influence, our hotel network continues to expand in the first quarter and achieve high quality growth. The first quarter continued the trend of fast opening in the fourth quarter of last year, with a total of 97 new hotels. By the end of the first quarter, the number of hotels in Yaduo has reached 1,302, which is a 34.5% increase. Last month, the number of hotels in Yaduo's single brand also reached 1,000.
spk16: Please turn to slide 6. Supported by Ator's increasing brand influence, our hotel network continued to expand and achieved high-quality growth in the first quarter. We maintained our rapid pace in network expansion with 97 new hotel openings. By the end of the first quarter, we had a total of 1,302 hotels in operation, representing a 34.5% increase year-over-year. Notably, our flagship Attour brand reached the 1,000-hotel milestone last month, underscoring our leading position in the upper-mid-scale hotel market.
spk03: Please turn to page 7. Please turn to slide 7. Moreover, franchisees' confidence remained robust in the first quarter, with a continuous increase in new signings and steady pipeline growth.
spk16: As of March 31st, the number of hotels under development reached 674. Please turn to page 8.
spk03: Due to its unique brand positioning and huge growth potential, QingJu 3.0 continues to gain the trust of its partners. The first quarter has a total of about 30 hotels, with a contract ratio of more than 15%. As of March 31st, with the opening of QingJu 3.0 Hotel reaching 36 awards. The performance of mature stores is strong. In the first quarter of the traditional season, the roll-up of QingJu 3.0 Hotel, which is full for three months, exceeded 290 yuan, and quickly increased to more than 300 yuan in April, revealing the strong product competitiveness of QingJu 3.0 in the mid-end market. We believe that in the coming summer,
spk16: Please turn to slide 8. Thanks to its unique positioning and immense growth potential, Attourlite 3.0 continued to gain favor among franchisees. A total of 30 new Attourlite 3.0 hotels were signed in the first quarter, accounting for more than 15% of our total new signings for the period. As of March 31st, we had a total of 36 Atorlite 3.0 hotels in operation, with mature hotels' performances thriving. Despite the traditional off-season, the RAVPAR of Atorlite 3.0 hotels in operation for more than three months exceeded RMB 290 in the first quarter and surged to over RMB 300 in April. highlighting Attourlite's strong competitive edge in the mid-scale segment. We anticipate that the operational performance of Attourlite 3.0 will continue to excel during the upcoming summer holiday season.
spk03: Please turn to page 9. Surrounding the concept of self-sufficient new life, we continue to refine and introduce the service of green housing features. The goal is to build every green housing 3.0 hotel In the city of Haizhong, the first quarter of the city of Qingzhu, the new line leads users to explore the food and play around the hotel, so that users can enjoy and live in Qingzhu. In addition, we have also launched a special service product in the gold field of Qingzhu to create exclusive membership benefits. As of now, all services in Qingzhu 3.0 are in the leading position among the Chinese hotel brands.
spk16: Please turn to slide nine. Building upon our ethos of life at ease, we are consistently introducing and refining distinctive services at Attouralight 3.0 hotels, striving to transform each hotel into an intimate oasis within its city. In the first quarter, we launched the new city guide feature. which helps customers explore nearby dining, entertainment, and other attractions, immersing them in the captivating lifestyle and the beautiful, enjoyable, and comfortable experiences that are unique to Attouralight 3.0 hotels. Furthermore, we unveiled special platinum privileges in our Attouralight 3.0 hotels, offering our members exclusive benefits. Presently, Atorlite 3.0's comprehensive range of superior services sets the brand apart in the mid-scale market.
spk03: In addition, we continue to expand our cross-border cooperation with other brands such as QingJu 3.0. For the return season and face-to-face gold season after the Spring Festival, we co-operate with fashion and clothing brands to create a clothing stand. We provide convenient suit and clothing services to business owners who enter QingJu. Furthermore, we expanded Atorlite 3.0's co-branded collaborations. For the post-Chinese New Year return to work period and the peak interview season,
spk16: We partnered with a fashion clothing brand to introduce the Suit Up Station event. This initiative, offering convenient suit rental services to a tour light's customers, garnered widespread praise. It not only boosted a tour light's brand visibility, but also addressed the needs of young business travelers during their trips. conveying a distinctive lifestyle and further strengthening the quintessential Attour Signature experience.
spk03: Next is our retail business. Please turn to page 10. Retail business continues to grow strongly in the first quarter. GMV reached 4.95 billion. The same growth rate is 277%. The performance of online channels is still strong.
spk16: Moving now to our retail business. Please turn to slide 10. Retail sustained its strong performance in the first quarter with quarterly GMV up by 277% year over year to RMB $495 million. Sales from online channels continued to flourish. accounting for over 90% of the total GMV in the first quarter.
spk03: Ator's deep sleep products
spk16: continued to attract high market recognition. We are devoted to understanding the deep sleep scenarios, identifying customers' sleep pain points, and continuously developing and launching new products. Through the expansion of our product categories, we aim to provide customers with enhanced solutions for an optimal deep sleep experience.
spk03: Please turn to page 11. After a wide range of popular voucher products such as Yaduo's deep sleep pillow Pro and deep sleep cooling quilt, we use the product self-publishing model to dig into the core needs of users for cooling quilt. On March 10th of this year, Zhongbang launched another new product of the deep sleep series, deep sleep cooling quilt. Our quilt uses imported breathable fiber, which can support heat dissipation and naturally produce coolness for user creation. In addition, in order to create a more comfortable and skin-sensitive deep sleep experience for the user, we abandoned the traditional quilt and quilt design and used different cold-sensitive double-sided materials on the deep sleep cooling quilt, including natural cold-sensitive fabric on the A and B sides and naked fabric that is close to the skin and cold water. It allows users to adjust the temperature and temperature at any time according to their needs. Please turn to slide 11. Following the success of our popular products like Deep Sleep Pillow Pro and the Deep Sleep Temperature Control Quilt,
spk16: We leveraged our proprietary product development process to delve deeper into customers' fundamental needs for lightweight bedding during the summer season. On March 10th of this year, we proudly introduced another standout addition to our DeepSleep series, the DeepSleep Lightweight Comforter. Crafted from imported breathable and moisture wicking fibers, the core of our lightweight comforter enables efficient heat dissipation, fostering a natural sense of coolness for customers. Moreover, to elevate the deep sleep experience with superior comfort and touchability, we departed from the conventional design of a comforter with a removable cover. Instead, our one-piece comforter is reversible, with A and B side made from distinct materials. The A side features natural cooling fabrics while the B side is fashioned from a cozy fabric with moisture content akin to human skin, allowing customers to quickly switch from cooling to warmth. Because the integrated cover design imposes heightened cleaning and maintenance requirements, Our deep sleep lightweight comforter is machine washable and it can be air or machine dried at low temperatures, bringing customers an easy care, minimalist deep sleep experience.
spk03: 亚朵星球深睡夏凉被上市后获得广泛的消费者好评。 上市21天,GMV便快速突破千万,并继续保持强劲的增长势头。 Since its debut, the Atul Deep Sleep Lightweight Comforter has garnered widespread acclaim. Its GMV sword passed RMB 10 million just 21 days after its release and continues to maintain robust growth momentum.
spk16: In April, the DeepSleep Lightweight Comforter topped the sales charts for comforters on both Douyin and JD.com and ranked among the top 10 in sales on Tmall.
spk03: The sales of DeepSleep Lightweight Comforter has once again confirmed Yaduo's profound insight and understanding of DeepSleep, as well as its effective product development capabilities. We will continue to provide users with better sleeping conditions,
spk16: The surge in sales of our DeepSleep Lightweight Comforter are yet another testament to Ator's profound insights and exceptional understanding of DeepSleep, as well as our efficient product research and development capabilities. We are passionate about enhancing customers' sleep experience and remain dedicated to crafting innovative, upgraded solutions to amplify customers' recognition of the Attour Planet Deep Sleep series.
spk03: It has attracted more and more users to join the A-Card membership system in Asia. The membership size is rapidly expanding. As of March 31, our registered membership has exceeded 7,100 million, with an increase of 86%. In addition, our CIS channels have maintained a steady growth in the first quarter. The CIS channel sales and business ratio is 65.1%, with an increase of 2.6%.
spk16: Transitioning to our membership business, please turn to slide 12. Our thriving brand recognition, coupled with our top-tier products and services, has inspired a growing number of customers to join the ACARD membership program, leading to a rapid expansion of our membership base. As of March 31st, Our registered individual members increased by 86% year-over-year, surpassing 71 million. Additionally, our CRS channel experienced steady growth in the first quarter, with a 65.1% contribution to the total room nights sold in the first quarter, increasing by 2.6 percentage points from the same period of last year.
spk03: In addition, we continue to promote the integration of the AADO resident members and the retail member system, and further build a fully unified AADO A-Card member ecosystem. Please turn to page 13. We plan to open a multi-channel member's points and rights, and immerse all users in the AADO A-Card member system, and continue to strive to dig into the opportunity of product and service innovation, In addition,
spk16: We have continued to promote the integration of both accommodation and retail members, further solidifying the foundation of our comprehensive and unified ACARD membership ecosystem. Please turn to slide 13. We plan to offer multi-scenario membership points and benefits, thus funneling customers from different scenarios into the unified ACARD membership system. We will also identify and push the boundaries of product and service innovation. Together, these initiatives will create an integrated membership experience for our customers while enhancing ACAR's brand recognition, ultimately empowering us to create a virtual cycle and achieve greater synergies between the accommodation and retail business. Meanwhile, We will leverage our growing customer insights to provide our customers with more tailored product recommendations and personalized offline accommodation experiences, thereby strengthening Ator's experiential advantages.
spk03: Finally, I am very proud to announce that we have officially released Ator's first ESG report. Please turn to page 14. As a leader of quality of life, a guide of Chinese experience, Ado always upholds the business concept of ecological coexistence, and strives to integrate the best practice of ESG into our daily business. In 2023, we will further strengthen the ESG management of the company, only to promote a more warm connection between people and people and people and nature. We strive to establish efficient, efficient and responsible management mechanisms, Last but not least,
spk16: I am delighted to announce that Ator has published its inaugural ESG report. Please turn to slide 14. As a leader in providing a quality lifestyle and an advocate for the Chinese experience, Ator consistently pursues win-win outcomes for the environment. Our industry and society as a whole by integrating ESG best practices across our business operations. In 2023, we further enhanced our ESG governance to help build warm connections between people as well as between people and nature. We strove to establish an efficient, orderly, and responsible management mechanism and foster mutual growth among and toward our employees, franchisees, and partners. Through a broad array of charitable projects, eco-friendly operational upgrades, diversity and inclusion initiatives, and green development efforts, we upheld our original aspirations while assuming our corporate social responsibility. Moving forward, we will holistically deepen our commitment to ESG, augmenting our contributions to society and the industry's sustainable development. Now I will turn the call over to our co-CFO, Mr. Wu Jianfeng, to discuss our financial results.
spk05: Thank you, Haijun. Good morning and good evening, everyone. Now I would like to present the company's financial performance for the first quarter of 2024. Please turn to slide 16 of the results presentation. Our net revenues for the first quarter of 2024 grew by 89.7% year-over-year and decreased by 2.5% quarter-over-quarter to RMB 1,468 million. The year-over-year increase was driven by robust growth in both the hotel and the retail businesses. The quarter-over-quarter decrease was caused by the decrease in RAPA, which was RMB 328 for the first quarter of 2024, compared with RMB 358 for the previous quarter, and also was due to the renovation of one of our leased hotels. Revenue from our miniaturized hotels for the first quarter of 2024 were RMB 836 million, up by 87.1% year-over-year, while decreasing 1.8% quarter-over-quarter. The year-over-year increase was primarily fueled by the ongoing expansion of our hotel network and the rapid growth of the supply chain business. The total number of monetized hotels increased to 1,271 as of March 31, 2024, up by 35.9% year-over-year. The quarter-over-quarter change was due to the decrease in rent power. Rent power of our miniaturized hotels was RMB 324 for the first quarter of 2024, compared with RMB 353 for the previous quarter. Revenues contributed by our leased hotel for the first quarter of 2024 were RMB 168 million, representing a decrease of 10.3% year-over-year and 13.8% quarter-over-quarter. This decline was mostly driven by the renovation of one of our least hotels into our first 204.0 hotel, as well as the decrease in red path. Red path of our least hotels was RMB 455 for the first quarter of 2024, compared with RMB 464 for the same period of 2023. and RMB 495 for the previous quarter. Revenues from our retail business for the first quarter of 2024 were RMB 417 million, up by 268.9% year-over-year and 1.1% quarter-over-quarter. The increases were attributable to the widespread recognition of our retail brands and the compelling product offerings. as well as improved product development and distribution capabilities. Revenues from other for the first quarter of 2024 will be 48 million, up by 76.8% year-over-year and 1.7% quarter-over-quarter. The increases were driven by the fast-growing membership business. Now let's move to cost and expenses. Please turn to slide 17. Operating costs and expenses for the first quarter of 2024 were RMB 1,154 million, including RMB 3 million share-based compensation expenses, compared with RMB 719 million, including RMB 142 million share-based compensation expenses for the same period of 2023. Hotel operating costs for the first quarter of 2024 increased by 73.5% year-over-year, and decreased by 9.7% quarter-over-quarter to RMB 662 million. The year-over-year increase was mainly due to the increase in variable costs, such as supply chain costs associated with the ongoing expansion of our hotel network. The gross margin of our hotel business was 34.1% for the first quarter of 2024, compared with 39.8% for the same period of 2023. This decrease was attributable to a decreased RAPA and an increased share of revenue generated by the lower margin supply chain business. Retail cost for the first quarter of 2024 increased by 235.0% year-over-year and decreased by 11.2% quarter-over-quarter to RMB 206 million. The year-over-year increase was associated with the rapid growth of our retail business The growth margin of our retail business was 50.5% for the first quarter of 2024, compared with 45.5% for the same period of 2023. The increase in growth profit margin of retail business was attributable to an increasing contribution from higher margin online sales. Now please turn to slide 18. For selling and marketing expenses for the first quarter of 2024 were RMB 175 million, compared with RMB 56 million for the same period of 2023. The increase was mainly due to our increased investment in brand awareness and effective online channel development, along with the growth of retail business. Setting and marketing expenses accounted for 11.9% of net revenues for the first quarter of 2024, compared with 7.2% for the same period of 2023. General and administrative expenses for the first quarter of 2024 were RMB 77 million, including RMB 3 million share-based compensation expenses, compared with RMB 193 million including RMB 141 million share-based compensation expenses for the same period of 2023. Excluding the share-based compensation expenses, the increase was primarily due to the increase in labor cost. General and administrative expenses, excluding the share-based compensation expenses, accounted for 5.0% of revenue for the first quarter of 2024 compared with 6.7% for the same period of 2023. Technology and development expenses for the first quarter of 2024 were RMB 24 million, compared with RMB 17 million for the same period of 2023. The increase was mainly due to the increased investment in technology systems and infrastructure to support our expanding hotel network and retail business. as well as improve the customer experience. Technology and development expenses accounted for 1.6% of net revenues for the first quarter of 2024, compared with 2.2% for the same period of 2023. Now please turn to slide 19. Adjusted net income for the first quarter of 2024 was RMB 261 million. up by 63.4% year over year. Adjusted net profit margin for the first quarter of 2024 was 17.8%, a decrease of 2.9 percentage points year over year. Adjusted EBITDA for the first quarter of 2024 was RMB 354 million, up by 53.1% year over year. Adjusted EBITDA margin for the first quarter of 2024 was a decrease of 5.8 percentage points year-over-year. The decreases in both margins were primarily due to the decrease in RAPR and the increased revenue contribution from lower-margin supply chain business, as well as organic growth of selling and marketing expenses amid the retail business development. Now please turn to slide 20 and 21. Notably, we have maintained a healthy cash position with stable growth momentum. As of March 31, 2024, our cash and cash equivalents totaled RMB 3,048 million. Among them, net cash was RMB 2,956 million. That concludes our financial highlights for the first quarter of 2024. With that, let's open for Q&A.
spk15: Thank you. We will now begin the question and answer session. To ask a question, please press star 11 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. For the benefit of all participants on today's call, if you have raised 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. Once again, that's star 11 for questions. Our first question comes from the line of CICC's Sijie Lin. Please go ahead, Sijie.
spk10: I'll translate my question into English. So thank you, management. Congrats on the very fast hotel opening into one. The 97 new openings almost achieved the highest quarterly level last year, and the revenue growth is also big. So will we adjust the full year opening revenue and profit guidance accordingly? Thank you.
spk05: Thank you, Sijie. Let me answer your question. Although we see some fluctuations in the rep part of the industry in the first quarter, from the point of view of the joiners, the confidence in the hotel industry is still very abundant. Thank you, Sijie.
spk16: Let me try to answer your question. Although we saw some fluctuations in the rep part of the entire industry in the first quarter this year, but from the franchisee's level, confidence in the hotel industry is still sufficient. And our signings in the first quarter also maintained rapid growth. And the projects in our pipeline continued to expand, reaching 674.
spk05: In terms of opening, in the first quarter, we opened 97 stores, which continued our rapid trend in the fourth quarter of last year. This year, based on our strategic goal of 2,000 good stores in 2025, we will raise the quality of our stores to a higher level and increase the quantity of our stores. In terms of new openings, in this first quarter, we opened 97 new hotels, continuing the trend in fourth quarter last year. This year, based on the strategic targets of having 2,000 premier hotels by 2025,
spk16: we will put forward higher requirements for quality and consider quality as a prerequisite for quantity growth. Based on this, we would like to maintain our target of 360 new openings for the full year, and we stay fully confident about achieving that.
spk05: In terms of revenue, although we see some fluctuations in RAPA, we expect that the company's revenue in 2024 will remain a high-quality growth. And based on our performance in the first quarter, especially in the retail business, we will increase our company's annual revenue guidance from 30% of the same growth in the previous quarter to 40% of the same growth in the previous quarter. This also maintains an industry-leading increase. This is mainly due to our continuous expansion of the hotel network and the contribution of the retail business to rapid development. In terms of profits, In terms of revenue, despite some fluctuations in REVPAR we saw, we still expect the group's 2024 revenue to maintain a high-quality growth,
spk16: And based on the outstanding performance in the first quarter, especially in our retail business, we would like to raise this year's revenue guidance from what we announced the last quarter. The original 30% year-on-year growth to a new growth of 40% year-on-year, maintaining a growth rate leading the industry. This is mainly due to the continued expansion of our hotel network and the contribution of our rapidly growing retail business. At the profit level, the fluctuation of the overall REVPAR and the change of the company's revenue structure this year will bring certain pressure on our profit margin level. However, we will continue to optimize our cost structure, improve the efficiency of management and operations and we expect to keep a relatively stable profit margin level. Okay, thank you.
spk14: Thank you, Sijie. Let's take the next question.
spk15: Thank you. Our next question comes from the line of Dan Chee from Morgan Stanley. Please ask your question, Dan.
spk06: Thank you, Manager. I would like to ask if you can share with us the performance of the entire blended RedPAR group since April. Please allow me to translate my questions. Can the management share the recent blended REFPA trend in second quarter and in particularly occupancy and ADR's respective performance? And what's the company's most updated view on your blended REFPA for full year 2024? Thank you. Okay, thank you, Dan.
spk03: Let me answer this question. The company's first quarter REFPA was 328 yuan. Last year, it fell by about 9 yuan. Thank you, Dan. Let me try to answer your questions. Our rev par in first quarter was RMB 328 yuan, which was down by RMB 9 yuan compared to the same period last year.
spk16: OCC was 73.3%, 0.8 percentage point higher than the same period last year. ADR was RMB 430, down by RMB 13 from the same period last year.
spk03: If we look at our 843 companies, we have data of the same power and same ratio over 18 months. The performance of the same power and same ratio and the same period last year is basically the same.
spk16: If we narrow down to our 843 mature hotels in operation for more than 18 months, the same hotel ref pod performance in first quarter this year stood at 99.7%, which was basically unchanged from last year.
spk03: To separate OCC and ADR performances,
spk16: Last year's concentrated bursts of business and leisure travel to a certain extent drove the price base higher and imposed relatively more pressure on this year's price. Since April, including the Labor Day holiday, we have also seen such a situation. According to QTD data, our Q2 RevPar might have bigger pressure than in Q1.
spk03: There are many factors that influence the performance of the whole year's RORPA. It may be a little difficult to give a relatively accurate estimate. From the current perspective, we believe that the uncertainty of the whole year is beyond our previous expectations. Under the current environment, our gene strategy will prioritize the basic version of OCC, but at the same time, we will also capture some key revenue opportunities. Thank you.
spk16: As for the forecast on 2024 whole-year REVPAR, due to multiple factors affecting its performance, it is rather difficult to give a relatively accurate REVPAR forecast. Seeing from now, the uncertainty of this year exceeds our previous expectation, and in this current environment, our strategy is to prioritize stabilizing our OCC base while also sees the core opportunities in revenue.
spk13: Thank you, Dan.
spk15: Next question, please. Thank you. Our next question comes from the line of Xin Chen from UBS. Please ask your question, Xin.
spk07: My question is about our sales. I saw that in the first quarter, which is a relatively short-lived quarter, the sales of the company's sales have remained very strong. Can you share with us the expectations for sales of the sales business throughout the year and the investment expectations for sales expenses? On the product level, I would like to ask about the sales of the company's sales in March. It looks very good. Can you share with us the subsequent product planning? We noticed that in Q1, relatively, the company's revenue from retail business still maintained a very strong growth. Would the company mind sharing your expectations on retail revenue over the whole year and your expectations on sales expenditure in retail business? The next question is that on the product level, a quick launch that you much achieved good results. Could you share about some follow-up planning products?
spk03: Thank you. Okay, thank you, Chen Yixing. I will now talk about the overall business and product planning of Lingshou. The financial situation will be added later. I think Lingshou is an action based on the real sleep demand of users. Today, we will see that the deep-sea products of Ado Planet can continue to gain the likes and recognition of users. I think this also promotes the continuous bright performance of our retail business. Based on the research and development ability of the products that users need, I want to highlight the performance of the new product of Xia Liangbei this time. I want to get confirmation again. So this year, we will continue to focus on our deep-sea products. Thank you, Chen Xin.
spk16: Let me first talk about the overall retail business and product planning, and then I'll pass it on to Jianfeng to add on retail financials later. I think based on our insights into the real sleep needs for users, our strategy with Atorplanet's deep sleep products has been kept on becoming known to people outside of the hotel industry and continued to gain users' fondness and recognition. and that promoted the excellent performance of our retail business. Our product R&D capacity based on user needs has been verified once again by the outstanding performance of our new product this quarter, Deep Sleep Lightweight Comforter. This year and the next quarters, we will continue to focus on Deep Sleep products and carry on launching the next generation of Deep Sleep pillows, or deep sleep temperature control quote in the next coming quarters. While continuing to expand the sleep categories, we will also be continually deepening and solidifying our advantages categories. Now, Jianfeng, could you please add some more onto the retail financials?
spk05: Okay. Regarding the performance of retail financials, our first quarter retail revenue reached 4.17 billion yuan, which is still a trend of rapid growth. Based on the strong performance of the whole retail business in the first quarter, we expect that our retail business's annual income will achieve a high double-digit growth. At the same time, our retail business is still in a fast-growing period. We are building its basic capabilities, including the promotion of brands and channels, which will increase investment. According to the sales cost mentioned just now, the retail business in the first quarter has still achieved a relatively high-efficiency investment and promotion. In the next few seasons, its sales costs will fluctuate with the pace of our entire new product, including some of these brand promotion plans, but it is expected that it will remain at a relatively stable level throughout the year. We also believe that as our retail business grows in scale, our retail business profit rate will continue to increase. We are confident that our retail business can bring more and more of this kind of increase in revenue and ecological value to the group.
spk16: Thank you, Chengxin. Our retail revenue in the first quarter reached RMB 417 million, maintaining a rapid growth momentum. Based on that strong retail performance, we do expect our retail business to achieve high double-digit year-over-year revenue growth for the full year. Meanwhile, our retail business is still in a process of rapid development. and that means we will continue to deepen investment in building a solid foundation for longer-term growth, branding, and channels. In terms of the sales expenditures you mentioned in your question, Chenxin, our retail business in first quarter coordinated campaigns and promotions with high efficiency. The sales expenses in the next few quarters will fluctuate slightly, echoing to our rhythm in new product launches and plans on branding campaigns, but it is expected to maintain a relatively stable level for the full year. Now that with our grown scale of retail business, its margin level has been continually improving, and we are confident that the retail business will bring more incremental earnings to the group and more value to our ecosystem. Thank you.
spk13: Thank you. Next question, please.
spk15: Thank you. The next question comes from Ziwei Liu from Citix. Please ask your question, Ziwei.
spk01: Hello, Mr. Guan. I'm Liu Ziwei from Pingxin Insurance.
spk08: Regarding the hotel business, I'd like to ask you about it. Because Haijun mentioned that the current business of Qingdi 3.0 is very good. So I'd like to ask you about the current business of Qingdi 3.0 this year. In addition, we have some progress and details to share with you before 4.09. I just did my question. About the hotel's business, could you please share the opening goals for Tour Life 3.0 this year? Also, an update on how the Tour 4.0 hotels are coming along. Thanks.
spk05: Okay, Jiwei, let me answer your question. We signed 30 new hotels in the first quarter of 3.0. Thank you, Jiwei. Let me answer that question of yours. In first quarter, there was a total of 30 signings for a tour like 3.0, accounting for more than 15% of our total new signings.
spk16: As of the end of March, 36 Atollite 3.0 hotels are in operation. We expect that by the end of this year, the number of Atollite 3.0 hotels in operation will reach about 100.
spk05: As Haijun mentioned in the introduction, we have a concept of self-sufficiency around 3.0. We continue to refine and upgrade the service of our special features to better meet the needs of young business users and gain user recognition. Therefore, the performance of our store in 3.0 is very outstanding. In the first quarter of the traditional period, the wrap-up of 3.0 in three months was more than 290 yuan.
spk16: Like Haijun just now have mentioned, we focus on the concept of life at ease and consistently introducing and refining distinctive services at Atorlite 3.0 hotels to better meet the needs of young business travelers and want their recognition. Atorlite 3.0 hotels have had eye-catching performances, In the first quarter, a commonly off-season, the REV part of those Tour Life 3.0 hotels in operation for three months above had exceeded RMB 290,000 in the first quarter and quickly rose to above RMB 300,000 in April, far exceeding the expectations from those franchisees.
spk05: At the same time, based on the operation status and user feedback we gathered from those Atualight 3.0 hotels in operation,
spk16: We are gradually refining the Atorlite 3.0 model to bring better and better experience to users, while also bringing sustainable and stable returns to the franchisees.
spk05: You also mentioned Atorlite 4.0. Since its release at the end of last year, Atorlite has set more than 30 benchmark projects in the core business circles of key cities. And you mentioned our Atul 4.0. Since Atul 4.0's launch at the end of last year, we have secured more than 30 benchmark projects in the core business areas of key cities.
spk16: The opening of the first Atua 4.0 hotel is also in busy preparation and will happen soon. It will be worth your waiting. Thank you.
spk13: Thank you, Jiwei. And operator, we can take one more question. Thank you.
spk15: Thank you. Our final question comes from the line of Lydia Lin from Citi. Please ask your question, Lydia.
spk09: Hello, Manager Chen. Thank you for giving me the last chance to ask a question. I would like to ask Manager Chen if there are any new plans that can be shared with you in terms of shareholding. Thank you. Lydia, thank you for your question. In terms of shareholding, it is also a point that we have always paid great attention to. Last August, we made a one-time shareholding.
spk05: Thank you, Lydia. In terms of shareholder returns, we have always attached importance to and practiced continuous returns to shareholders. In August last year, we announced a one-time dividend
spk16: This year, we will continue to act upon the overall operating performance, cash position, future business development plan, industry common practices, and to consider plans to increase shareholder returns, including dividends. We are committed to sharing the benefits of development with our shareholders. Thank you.
spk12: Thank you, Lydia.
spk15: Thank you. And that concludes the question and answer session. I'd now like to turn the conference back to Allison John for any additional or closing comments.
spk13: Thank you all for joining us today. If you have any further questions, please feel free to contact our IR team. We look forward to reconnecting with you next quarter. Thank you and goodbye.
spk15: This concludes today's conference call. Thank you for participating. You may now disconnect.
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