H World Group Limited

Good day and thank you for standing by. Welcome to the H-World Third Quarter 2022 Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. And now I'd like to hand the conference over to Mr. Jason Chen, investor relations director. Thank you. Please go ahead, sir.

Thank you. Good morning and good evening, everyone. Thanks for joining us today. Welcome to Edgeworth Group third quarter 2022 earnings conference call. Joining us today is our chairman, Mr. Jiqi, our CEO, Mr. Jinghui, our President, Ms. Liu Xingxing, our CFO, Ms. Cheng Hui, our Deputy CFO, Ms. Ye Fei, and our CEO of International Business, Ms. He Ji Hong. Following their prepared remarks, management will be available to answer your questions. Before we continue, please note that the discussion today will include forward-looking statements. made under the safe harbor provisions of the United States Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public findings with the SEC. Edgeworth Group does not undertake any obligations to update any forward-looking statements except as required and applicable laws. On the call today, we will also mention adjusted financial measures during the discussion of our performance. Reconciliation of those measures to comparable GAAP information can be found in our earnings release that was distributed yesterday. As a reminder, this conference call is being recorded. The webcast of this conference, as well as supplementary slide presentation, is available at ir.edgeworld.com. With that, now I will turn the call over to Mr. Ji Qi. Mr. Ji, please.

Good morning and good evening, everyone. Thank you for joining us today. We are happy to report that our China business will pop in the third quarter. recovered to 90% of 2019 level thanks to ending up leisure travel demand, as well as the gradual recovery of business travel. This recovery is closely associated with the relaxation of COVID policy this third quarter. However, with the recent increase of COVID cases, we may face more uncertainties. and the negative impact on our business recovery as a consequence of tightened control measures. In the third quarter, we reported that we carried out organizational restructuring and established six regional headquarters to focus on economic and middle-scale segments. In the third quarter, without further implementing regionalization strategies and strengthening our regional organizations. At the same time, we re-aligned the structure for upscale and luxury brands in China to provide more efficient management and oversight. With our long-term sustainable quality growth strategy we have been further emphasizing on improvement of products and service quality. We accelerated the exit from low-quality soft brands in economic segment. Moreover, we continuously upgraded our major brands such as Han Ting and Ji Hotel to renew into a new version with better design and quality. Looking back in the last three years, COVID has brought tremendous challenges to the Chinese lodging market. However, branded chain hotels were showing higher resilience than independent hotels. In fact, over the last three years, chain hotels were continuously and gaining more market shares and leading the recovery of the industry. We believe that the shift from independent hotels to branded hotels will further gain momentum and will help branded hotel chains to further consolidate the market. We were confident that we will benefit from this trend with our strong brands and quality products. With the recovery of many international travel markets, our Deutsche hospitality business achieved another good quarter with a further real-power improvement. Real-power in third quarter recovered to 102% compared to 2019 in this quarter. With the cost management and the organizational opening structure in place, we are in a good position to continuously improve our portability. Due to recent large sporadic resurgence of COVID in many provinces and cities in China, we see strict COVID measures continue to be carried out in order to cope with short-term turbulences. and preserve dry powder. We will further streamline operations, be prudent on capital spending, and allocate resources in a disciplined way. We will also work closely with our franchisees and partners to help them cope with the challenges during this special period. Together with friends and partners in our ecosystem, we will further strengthen the foundation and build the resilience of our company. With this, I will turn the call to Jinghui to discuss our STEM business development in detail. Thank you, Ji.