GreenTree Hospitality Group Ltd. American depositary shares, each representing one Class A ordinary share

Hello, ladies and gentlemen, and thank you for standing by for Green Tree's third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. As a reminder, today's conference is being recorded. I would like now to turn the meeting over to your host for today's call, to Mr. Rene Vangestein of Christensen, Green Tree's investor relations firm. Please proceed, Rene.

Thank you, Matt. Hello, everyone, and thank you for joining us. Green Tree's earnings release was distributed earlier today and is available on our IR website at ir.998.com, as well as on PR Newswire services. We also posted a PowerPoint presentation that accompanies our comments on the same IR website. On the call from Green Tree, Mr. Alex Xu, Chairman and Chief Executive Officer, Ms. Celina Yang, Chief Financial Officer, Ms. Megan Huang, Vice President of Sales and Marketing, and Mr. Nicky Zheng, IR Manager. Mr. Xu will present the company's third quarter 2020 performance overview, followed by Ms. Huang, who will discuss business operations, and Ms. Yang will then discuss financials and guidance. They will be available to answer your questions during the Q&A session, which will follow. Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminologies such as may, will, expect, anticipate, aims, future, intends, plans, beliefs, estimates, continue, target, is or are likely to, going forward, confident, outlook, and similar statements. Any statements that are not historical facts, including statements about the company and its industry, are forward-looking statements. Such statements are based upon management's current expectations and current market and operating conditions. and relate to events that involve known and unknown risks, uncertainties, and other factors, all of which are difficult to predict, and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievements to differ materially from those in the forward-looking statements. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks uncertainties or factors is included in the company's filings with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made during this conference call, are current as of today's date. The company does not undertake any obligation to update the forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law. It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Alex Xu. Mr. Xu, please go ahead.

Thank you, Rene, and thanks everyone for joining our third quarter earning call today. Let's start with the highlights on slide number five. Our business continued to recover during the third quarter despite some resurgence of the infections in certain regions. Compared with the second quarter 2020, raw power increased 32.9% to 120 RMB. Total revenues increased 23.6% to 266.9 million RMB. Non-GAAP adjusted EBITDA increased 46.6% to 134 million RMB with margins improved to 50.2%. Core net earnings non-GAAP increased 23.8% to 92.4 million RMB with margin 34.6%. We expanded our need for upskills and the Luxie brand further. Of all new openings this quarter, 28.4% were made to upscale and luxury hotels. That's a historical high for quarterly new hotel openings. This year has been like no other in the history of the Green Tree. While year-over-year comparisons are always important, a look at a few key metrics for the first three quarters will help to realize to considerate progress we have made since the pandemic hit our businesses back in January. Let's take a look at slide number six. Total revenues, income from operations, adjusted EBITDA and non-GAAP, and the core net earnings. Non-GAAP all increased consistently for three consecutive quarters since the lows in Q1 with improving margins. Let's look at slide seven. Our blended ADR decreased 12.9% year over year to 151 RMB. Occupancy dropped to 79.1%. And raw power decreased 19.8% to 120 RMB. If we exclude hotels being used for quarantine, Ropar for same hotels decreased 16.3% to 125 RMB. Nevertheless, we continued to extend our market presence across China. We opened 162 new hotels during the third quarter for a total of 4,195 hotels in operation. We ended the quarter with 1,110 hotels in our pipeline, up 70.2% year over year. Total revenues for the quarter were 266.9 million RMB, a 8.6% decrease compared to the third quarter of 2019. Gross profit decreased 22.5% to 158.8 million RMB. Net income decreased 16.2% to 85.6 million RMB. A non-GAAP adjusted EBITDA decreased 24.3% to 134 million RMB. Net income per ADS that's basic and diluted decreased 20% to 0.81 RMB and the core net income per ADS decreased 32.1% to 0.90 RMB. Let's now turn on slide number nine for an update on the impact of the COVID-19. China has been balancing pandemic controls and the economic recovery with targeted measures introduced to help the company safely restart the business and the people get back to their normal daily lives. As a result, we have seen a sustained recovery in domestic tourism and business, leading to improved occupancy rate, ADR, and well-parl during the third quarter. Thanks to the tireless work and dedication of our staff and franchisees, and the strong support of our loyal members. In third quarter, Green Tree again outperformed the hospitality industry in China, and our operating performance continued to recover. Further, thanks to government policies designed to encourage domestic consumptions, China showed a strong signs of economic rebound in fourth quarter. For an example, The October Golden Week saw over 637 million domestic tourists, or 79% of the last year's level, which generated $466.6 billion in revenue, a 69.9% of last year's level, according to China's Ministry of Culture and Tourism. These figures point to a considerable improvement compared to June's three-day Dragon Boat Festival, which brought only 48.8 million tourists, or roughly half of last year's level. Let's turn to slide number 10. Riding on the recovery, we continued to optimize our brands, products, and technology to capture domestic travel demand. we focused on better serving our guests and supporting our franchisees. We strengthened our cooperation with travel management companies and expanded the joint promotions with the local merchants. As a result, our occupancy rate approached 85% during the October Golden Week, nearly the same level as last year. In November, our occupancy rate rebounded to nearly the same level as of last year. And the growth part recovered to almost 95% of last year's level. That's for both October and continued recovery till November. In summary, we were glad to see a meaningful improvement in the third quarter of 2020. As we returned to our more normal economic activities and living conditions in mainland China, we continued to serve and protect our guests, our employees, constantly adapting our operations and marketing campaigns to the evolving conditions, while still managing to increase income from operations, net income, and adjust EBITDA. Our margin continues to rise thanks to our flexible cost structure and the measures we have implemented since the outbreak of COVID-19. Having gone through the challenges of the first nine months of 2020, we believe we continue to execute our growth strategy and further enhance our partnership with our franchisees because we have accumulated extensive experience We are well prepared should the pandemic last much longer, and we are more confident in our ability to consistently achieve a profitable growth and create long-term value for our shareholders. I will now pass the call over to Megan Huang, who will summarize our business operations for the third quarter. Megan, please go ahead.