H World Group Limited

Good day and thank you for standing by. Welcome to the H World Q4 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask questions 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. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I will now like to hand the conference over to your speaker today, Jason Chen, Investor Relations Director. Please go ahead.

Thank you. Good morning and good evening, everyone. Thanks for joining us today. Welcome to Edgeworth Group 2022 Fourth Quarter and Full Year Earnings Conference Call. Joining us today is our chairman, Mr. Jiqi, our CEO, Mr. Jinghui, our CFO, Ms. He Jihong, our President, Ms. Liu Xingxing. Following their prepared remarks, management will be available to answer your questions. Before we continue, please note that the discussion today will include forward-looking statements made under the Safe Harbor Provision of the United States Private Securities Litigation Reform Act of 1995. 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 filings with the SEC. Each board group does not undertake any obligations to update any forward-looking statements except as required under applicable laws. On the call today, we will also mention adjusted financial measures during the discussion of our performance. Reconciliation of those measures to comparable gap information can be found in our earnings release that was distributed yesterday. As a reminder, this conference call is being recorded. The webcast of this conference call, as well as supplementary slides presentation, is available at ir.edgeward.com. With that, now I will turn the call over to our chairman, Mr. Ji. Mr. Ji, please.

Good morning and good evening, everyone. Thank you for joining our call today. 2022 has been a very challenging year for our business in China. With strict COVID policies in place for quite a long period of time across the country, our business has been severely impacted, as many people expected. However, we have shown strong resilience throughout this difficult time and continued to expand new hotel network. I would like to use this opportunity to extend our sincere appreciation to our customers, franchisees, employees, and business partners for their support to go through this tough period together. No matter how difficult the business environment was, we did not stop developing our company future. Last year, we transformed our Chinese operations throughout through organizational restructuring and established a firm ground in key regional markets. With our six fully equipped regional companies in China, we are now well prepared for penetration in more regional markets. With China lifting the COVID restrictions and the few focus on economic development, we are embracing a strong recovery in the hotel market. We believe we are well positioned to capture the growth opportunity. This year, we will focus on three key areas. First, we will continue the high-quality extension of our hotel network. This will be largely driven by limited-service hotels, especially in low-tier cities and less-penetrated areas. Second, we will further develop and establish firm ground in mid-scale and upper-middle scale through multiple-brand strategy. Last but not least, we will continue to strengthen our organizational and operational capabilities to achieve high operational efficiency. and provide a better product and services to our customers as well as franchisees. In our international business, we are very glad to report that DH achieved an improvement in many operational areas over the last year. Four years adjusted EBITDA before impairment turned positive for the first time since our acquisition. In addition, we have achieved significant breakthrough in loyalty program, direct sales channel development, and digitalization of operational process. In 2023, we will focus on future margin improvement, digitalization, growth of direct sales, and expansion of hotel network. This world is full of uncertainties. as we cope with the consequences of international monetary policies and continued regional conflicts. We will further strengthen our core competence in operations and various platforms to build up our overall resilience. We are confident that with our continued innovation in business models and projects, we can drive through different challenges and generate sustainable quality growth for our investors as well as the entire ecosystem. With this, I would like to thank you. Thank you.