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

Good morning, good afternoon, and good evening, and welcome to the Green Tree Hospitality Group Limited fourth quarter and full fiscal year 2021 financial results release conference call. All participants will be in a listen-only mode. Should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Rene Vasquetine. Please go ahead.

Thank you, Mathieu. 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. Celina Yang, Chief Financial Officer, Ms. Megan Huang, Vice President of Sales and Marketing, and Mr. Nicky Jiang, IR Director. Mr. Hsu will present the company's Q4 2021 performance overview, followed by Ms. Wang, 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 Integration Act of 1995. These forward-looking statements can be identified by terminology such as may, will, expect, anticipate, aims, future, intends, plans, believes, 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 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, Rene. Hello, everyone, and thank you for joining us for today's phone call. First, we want to apologize for the accidental earlier termination of the phone call during the last quarter's running call. We hope this time the operator will not accidentally terminate the call earlier. 2021 was a full year of changes, challenges, and opportunities with a surge in COVID-19 cases and the emergence of new virus variants and the intermittent lockdowns. Facing the twists and turns of the pandemic, we seized the opportunity to further innovate our brand support our franchisees, and actively promote digital management. We believe that all these changes have paved the way for a strong recovery and the sustainable development of our business once this pandemic is finally over. Please turn to slide five. We are satisfied with our performance in the fourth quarter given the resurgence of COVID-19 in various parts of China. Compared with Q4 2020, raw power decreased 5.6% to 117 RMB. Total revenues increased 6.1% to 307.4 million RMB. It is worth mentioning that the total revenue for the full year increased 29.7% year-over-year to 1,206.1 million RMB meet our revenue guidance provided in previous quarter. Income from operations decreased 69.5% to 36.1 million RMB with a margin of 11.8%. Net income decreased 64.1% to 28.46 million RMB with a margin of 9.3%. Non-GAAP adjusted EBITDA decreased 48.4% to 67.5 million RMB with a margin of 21.9%. And earnings per share decreased 69.9% to 0.25 RMB. Slide six shows detailed numbers for total revenue, operating income, net income, and adjusted EBITDA. On slide 7, operating performance was impacted slightly to last quarter. Our occupancy rate and welfare recovered to 90.6% and 91.3% respectively of the 2019 levels, a better performance than the industry average. shows historical weekly raw power performance in the fourth quarter versus 2019. We actually charted all the way to May of this year. Raw power started to recover at the beginning of October, only to drop to 81.3% in the first week of November, with the resurgence of COVID-19 in several cities. It then gradually recovered as cases subsided to finish the year strongly at 98.5% in the last week of December. After a seasonal drop at the beginning of 2022, raw power recovered to 88% over the Chinese New Year due to family reunions and domestic tourism recovery, leading to a boom in the hospitality industry. However, the reintroduction of travel restrictions during the Winter Olympics and the increasing number of Omicron variant cases sent it down again. This downtrend was further affected by another round of COVID-19 outbreaks in March and April that resulted in some major cities being locked down and millions of residents confined at homes. Prolonged outbreaks that started in March in Jilin province and Shanghai have since caused the viral part to further decline to 56% earlier May. While China's domestic market remains under pressure due to a wave of Omicron-related infections, we believe we can continue to outperform the industry across business lines. Currently, around 800 of our hotels are under requisition by various governments, approximately 17.2% of our total portfolio. We bring our franchisees and partners stable customers and income. In addition, we support them in many ways, including reducing and eliminating recurring management fees, and providing franchisee loans at attractive interest rates. We are also supporting pandemic prevention measures with hotel staff volunteers delivering food and water supplies to pandemic prevention and control stations. Furthermore, our staff actively responded to the calls of the government and undertake quarantine and reception tasks including taking charge of the meals of quarantine observation and the pandemic prevention personnel. Now, starting with slide 10, let's talk about strategies and the execution with further expansion in the mid to upscale segment and the tier three and the lower cities in Southwest and the South China, as well as brand renovation. Let's take a look at slide 11. We have been continuously growing our mid to upskills on the luxury segment over the past few years. And by the end of the fourth quarter, hotels in these segments had increased to 552, 11.9% of our total portfolio, compared with only 50 in 2017. We plan to open more hotels in these segments this year. Please turn to slide 12. Over the past five years, most of our new hotels have been in China's sliding tier 3 and lower cities, where they have recovered faster than in other cities in most quarters. In addition, hotels in some lower tier cities are performing well, especially those with a smaller number of rooms. As we continue to execute our strategic plan, 68.4% of all new hotels in our current pipelines are in such cities, and we will further capitalize on the substantial opportunities in such locations. Let's have a look at slide 13. During recent quarters, we accelerated our expansion into the central, southeast, and southwest markets. The map shows our expansion footprint in provinces including Chongqing, Sichuan, Hubei, Jiangxi, Shanghai, and other provinces for both LO and FM hotels openings. Please turn to slide 14. Responding to a growing market trend, we have launched a new mid to upscale brand called eSports Hotels. These hotels allow us to step into the esports segment and answer the needs of local gamers and hotel guests for this type of experience. We now have 25 esports hotels in operation and target an additional 100 over the next 12 months. These hotels typically record ADR around 300 to 400 RMB with occupancy rates around 100%. The performance has been even better than usual during COVID-19. Furthermore, innovations in our renovation process have made it possible to complete renovation within 14 days, further reducing costs for the franchisees. We also introduced an innovative new brand, Ge Li Hotels, that embodies personality and vitality. Gurley Hotel is positioned in our mid-tier segment and currently has seven hotels in operation. The road to recovery lies ahead, but it is by no means straight. In a rapidly changing marketing environment, over the past two years, we have implemented strict cost control measures to improve the operating efficiencies of all brands. All these efforts have enabled us to adapt quickly to changes in our industry and put us in a strong position to grow faster post-COVID-19. Going forward, we will remain highly adaptable to emerging market trends and capture growth opportunities thanks to our resilient and flexible business model and experience that our team and franchisee have accumulated while combating COVID-19. Now, let me turn the call to Megan.