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 GreenTree's second quarter 2021 earnings conference call. At this point, 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 call is being recorded. I would now like to turn the meeting over to your host for today's call, Mr. Rene Vengestein of Christensen, GreenTree'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. As a reminder, we also posted a PowerPoint presentation that accompanies our comments to the same IR website. On the call from Green Tree are Mr. Alex Xu, Chairman and Chief Executive Officer, Ms. Celine Hayang, Chief Financial Officer, Ms. Megan Huang, Vice President of Sales and Marketing, and Mr. Nicky Zhang, IR Director. Mr. Xu will present the company's Q2 2021 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 Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. The forward-looking statements can be identified by terminology, such as may, will, expect, anticipate, aims, future, intent, 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 the 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 any forward-looking statements 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 Hsu. Mr. Hsu, please go ahead.

Thanks, everyone, for joining our call today. Before we begin, Let me mention that because of the impact of the COVID-19 on our operations during the second quarter of 2020, for this reason, we will occasionally during this call provide Q2 2019 numbers where we believe they provide a meaningful comparison. Please turn to slide five. We are glad to report that our strong performance continued in the second quarter. Compared with Q2 2020, growth power increased 49% to 134 RMB. Total revenues increased 60.7% to 347.1 million RMB. Income from operations increased 42.5% to 89.3 million RMB with a margin of 25.7%. Net income decreased 14.4% to 80.3 million RMB with a margin of 23.1%. Non-GAAP. Adjusted EBITDA increased 44% to 111.2 million RMB with a margin of 32.1%. And the earnings per share decreased 22.1% to 0.79 RMB. Total revenues exceeded Q2 2019, however, income from operations, net income, and adjusted EBITDA were around two-thirds of Q2 2019. This is due to the fact that for this year, during the first half, we opened 23 LO hotels, generating a loss of RMB 33.7 million during this ramp-up period. Twenty of these new LO hotels were added during the second quarter and are mostly located in Chengdu and Chongqing. As both cities are key development areas and our hotels are in premium locations, we expect that they will turn profitable in the not too distant future. Slide six provides more detailed numbers for total revenues, income from operations, net income, and adjust the EBITDA. Now, let's turn to slide seven. The second quarter saw a robust recovery in occupancy rate and the raw power compared with Q2 2020. This performance has been helped greatly by our continuous expansion into third-tier cities. In addition, the tireless efforts of our franchisees and employees and our local partners have helped us gain even more loyal customers who value and trust our brands. During the second quarter, our occupancy rate and world power had recovered to 96.9% and 96.2%, respectively, of their 2019 levels, a better performance than the industry average. Slide 8 reflects historical weekly vol-par performance and compares with 2019. During the second quarter, Travel demand gradually resumed as the pandemic was better contained and the life returned to normalcy. Especially during the Tom's Weekend Day and the Labor Day Festival, raw power recovered substantially month over month in April, May, and June. However, the recovery and the business moment Momentum were negatively impacted during the third quarter and in October. There were some resurgence of COVID-19 cases in Nanjing City and Jiangsu Province at the end of July lead to tightened travel restrictions, which inevitably negatively impacted the travel in the region. As a result, during the first week of August, Floral Park dropped to about 60.7% of its 2019 level, down from 106% of 2019 levels at the end of June. Recent COVID-19 outbreaks in several cities in China have similarly impacted domestic travel again. resulting in a drop in flow power during the first week of November to about 81.3% of its 2019 level, down from 99.9% of the 2019 levels in the second week of September. Now, starting with slide 10, let's talk about strategy and execution. First, We are adding more MED to upscale LO hotels in the strategic locations. Secondly, we are further expanding our hotel network into Tier 3 and the lower cities. Thirdly, we are investing in information technology innovation, creating smarter hotels. And finally, as we mentioned, we are also trying to penetrate to the fast-developing regions such as Southwest and the southern part of the China. Now, let's take a look at the slide 11. During the quarter, we accelerated our expansion into the mid-range and higher-end market in Central, Southeast, and Southwest China. We opened 20 OO hotels. This year, like previous year, we were able to secure choice locations at economically attractive rent price. All of these L.O. hotels are situated within popular transportation hubs, central business districts, or government centers. We believe they will act as anchor hotels and will attract new franchisees to our network, and they will act in the future as our model hotels. Now please turn to slide 12. We have been continuously growing our high-end segment over the past few years, and by the end of the second quarter, hotels in this segment had increased to 9.9% of our total portfolio, compared with only 2.2% in 2019. We plan to open even more hotels in the mid to upscale and the luxury segment this year. Please turn to slide 13. Over the past four years, the vast majority of our new hotels openings have been trying to slide into tier three and the lower cities with 70.6% for all new hotels in our current pipelines located in such cities. As a testament to the soundness of this strategy, the pace of recovery at our hotels in such cities has been faster than in other cities in most quarters. The combination of our existing footprint and our strong performance in these cities have given us a real competitive advantage to capture future opportunities in China's booming hospitality industry. Slide 14 highlights our innovative IT process. We are in earlier movers. We are earlier movers in our industry in upgrading to an integrated cloud-based management and AI-driven platform. I strongly believe that this is a solid foundation we need moving forward to ensure that personal data is securely managed in accordance with privacy laws and regulations. We are fully focused on developing smart and digital hotels to improve operating efficiencies for our hotel general managers and staff, ensure the reliability of our booking system, and deliver excellent customer service. The esports industry is now coming to China. We have established a strategic cooperation partnership with Tencent Games to further diversify our esports business. I believe that we have now more than 10 esports hotels in operation and also growing. Slide 15 shows higher growth in both our individual and corporate membership programs, which accounted for most of our 91.1% in direct sales in the second quarter. Individual memberships grow to 62 million, up from 49 million year-over-year, and the corporate memberships grow to 1.8 million. up from 1.6 million year over year we have one of the highest the percentage of room lag booked by corporate and the individual members in response to china's five-year plan for social and economic development initiatives we're exploring how the concept of wellness and the royal revitalization might be applied in our business, especially in terms of the senior cares and community care. We are determined to have a positive impact and contribute to communities by creating employment opportunities and raising the standard of living in these developing regions. In closing, I would like to thank our team franchisees, and the shareholders for their support. I would like to especially thank our local partners. Many of them have worked very hard during the pandemic period. They are Argyle, Urban, Kyrie, Manly, and all their team efforts. We have a strong pipeline and expect our positive recovery continue as effective government measures contain the resurgence of COVID-19. Moving forward, we are well positioned with our resilient business model to meet the renewed demand for domestic travelers. I will now pass the call to Megan, who will summarize our business operations in the second quarter. Megan, please go ahead.