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

Hello, ladies and gentlemen. Thank you for standing by for GreenTree's third quarter 2023 financial results release. At this time, all participants are in 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 Van Gisten of Christensen, GreenTree's investor relations firm. Please proceed, Rene.

Thank you, MJ. Hello, everyone, and thank you for joining us. Green Freeze 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 Hsu, Chairman and Chief Executive Officer, Ms. Celina Yang, Chief Financial Officer, Ms. Megan Huang, Vice President of Sales and Marketing, and Ms. Ellen Zhao, Financial Director, stepping in for Mr. Bill Zhou, who is not available today. Mr. Hsu will present the company's performance overview for the third quarter of 2023. followed by Ms. Wang and Ms. Zhao, who will discuss business operations, and then Ms. Yang and Ms. Zhao will discuss financials and guidance. They will be available to answer your questions during the Q&A session which follows. 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. These forward-looking statements can be identified by terminologies 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 expectation 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 filing with the US 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 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.

Thanks, René. And hello, everyone, and thank you for joining us today. We had a good third quarter with a strong recovery in our hotel business year-over-year as tourism and business travel continued to rebound. Ropar increased 30.5% year-over-year, reaching as high as 110%. of its third quarter of 2019 levels in July and August, with a surge in the number of tourists during the summer vacation. The pace of recovery of raw power slowed slightly in September, but remained stable. We will continue to implement our long-term strategic development plan, focused on helping franchisees to maintain high-quality service and operation, and expand our hotel network and the sales channel, provide stable operating profitability, and maintain long-term stable growth. Please turn to slide five. Compared with the third quarter of 2022, hotel raw power was 156 RMB, up 30.5 percent, And the restaurant ADS, that is average daily sales per store, was 6,548 RMB, up 7.4 percent. Total revenues were 460.9 million RMB, up 15.3 percent. The increase was partially due to the recovery in RERPAR. The increase in the number of hotels and the increase in the ADS offset by the closure of 85 restaurants over the past 12 months. Income from operations increased to 137.8 million RMB with a margin of 29.9 percent. Net income was 117.4 million RMB with a margin of 25.5 percent. Adjusted EBITDA, that's non-GAAP, was 173.4 million RMB, that's up 215%, with a margin of 37.6%. Core net income, that's non-GAAP, was 127.2 million RMB, with a margin of 27.6%. Cash provided by operating activities was 154.8 million RMB, Slide six shows detailed numbers for hotel, total revenues, income from operations, net incomes, and adjusted EBITDA. On slide seven, operating performance was great. Raw power was 156 RMB. At the bottom of the slide, you can see the weekly rural power performance in the third quarter of 2023 compared with 2019. Rural power gradually recovered to more than 110 percent of its pre-pandemic levels in July and August, then slowed down gradually in early September. During the mid-autumn festivals and the National Day, we ushered in a new round of development and growth. Slide 8 shows the operating performance of restaurant with ADS continuing an upward trend and reaching the highest level in a long time. Now, starting with slide 10, we will review our strategic execution across our businesses. In our hotel business, We further expanded in the mid to upscale segment and increased our penetration in tier three on the lower cities in South China. As you can see on slide 11, we continue to grow our mid to upscale segment with 455 hotels. That is 10.9% of our total portfolio. at the end of the quarter up from only 50 in 2017. While the mid-scale segment remains the core of our hotel business with 70.8 percent, we continue our expansion into the higher-end segments. The economy segment remains stable at 18.3 percent. Please turn to slide 12. Over the past five years, Most of our new hotels have been in China's thriving tier three and the lower cities. As we pursue greater penetration in tier three and the lower cities, 73.7% of hotels in our current pipelines are in such cities, and we will further capitalize on the substantial opportunities in such locations. On slide 13, we continued to focus on increasing profitability in our restaurant business. We closed unprofitable stores, increased the proportion of franchised and managed restaurants, and expanded the number of street stores. On slide 14, during the third quarter of 2023, we closed 10 restaurants in areas of decreasing economic activities helping improving the profitability. On slide 15, you can see the growth in the proportion of our franchised and managed restaurants since the acquisition of Da Nang Dumplings and Bellagio during the first quarter of 2023. We opened six F&M restaurants in the third quarter of 2023. Slide 16 shows the restaurant breakdowns by location. Most of our restaurants are currently in shopping malls. However, we believe there is a substantial potential for street stores, and we intend to grow this segment. Now, let me turn the call over to Megan under Ellen Zhao. Megan.

Thank you, Alex. Please turn to slide 18. to start reviewing the operating and financial highlights. Slide 18 shows the trend in our quarterly operating performance. In the third quarter of 2023, REPA for our LO hotels increased to 212 RMB. REPA for our FM hotels increased to 155 RMB. ADR for our LO hotels increased to 268 RMB. and ADR for our FM hotels increased to 190 RMB. Occupancy at our LO hotels increased to 79%, and occupancy at our FM hotels increased to 81.3%. Slide 19 highlights the growth in our membership programs, which accounted for most of our direct sales. Individual memberships grew to 88 million. up from 77 million a year ago. And corporate membership grew to 2.02 million, up from 1.92 million a year ago.

Now, please turn to slide 20. In the restaurant business, the number of individual members grew to 2.67 million, up 1.6% year-over-year. ADS increased 7.4% to 6,548 RMB in the third quarter of 2023 compared to one year before. With that, I will pass the call over to our CFO, Selina Yang.

Thank you, Ellen. First, I will review our hotel business. Please turn to slide 21. In the third quarter, total hotel revenues increased 40.4 percent year-over-year to 339.1 million RMB. The increase was primary due to the recovery in RAPA and the increase in the number of hotels. Total hotel revenues increased 9.2 percent to 339.1 million RMB compared to the second quarter of 2023. Total revenues from FM hotels were 186 million RMB, up 20.8% year-over-year, while total revenues from ARO hotels increased 83.1% to 151.8 million RMB. On slide 22, total hotel operating costs and expenses decreased 14.7%, year-over-year to 212.4 million RMB. And the total hotel operating costs and expenses decreased 0.5 percent compared to the second quarter. Total costs and expenses are composed of hotel operating costs, selling and marketing expenses, general and administrative expenses. Operating costs were 159.9 million RMB increased 12.1% year-over-year. The increase was mainly due to higher personnel costs, higher consumables, and higher utilities as business rebounded, as well as higher depreciation and amortization with increase in assets, partially offset by the consolidation of Argyle and Urban. Operating costs increased 6.5% to 159.9 million RMB, compared to the second quarter of this year. Selling and marketing expenses were 14.3 million RMB, a year-over-year increase of 24.9%. The increase was mainly attributable to higher sales channel commissions and higher sales staff salaries. Selling and marketing expenses increased 3.7% compared to second quarter of this year. General administrative expenses were 26.7 million RMB, down 50.9% compared with same quarter of last year. The decrease was mainly due to lower bed debts, lower staff-related expenses, and lower consulting fees. General administrative expenses decreased 40 percent compared to the second quarter of this year. Turning to slide 23, income from hotel operations increased from 1.3 million to 127.5 million year-over-year. Net income of hotels turned positive year-over-year at 108.5 million RMB. Adjusted EBITDA increased 221.1% to 164.3 million RMB, and core net income increased from 5.4 million to 118.1 million RMB year-over-year. Next, let me turn this call over to Ellen, the financial director. Please turn to slide 24. In the third quarter of 2023, total restaurant revenues

or 121.8 million RMB. You can also see the revenue breakdown for FM restaurants and LO restaurants. On slide 25, total operating costs and expenses decreased 29.6% year-over-year to 111.8 million RMB. and decreased 2.6 percent sequentially. You can also observe the downtrends in materials costs, personal costs, and rents. Turning to slide 26, income from restaurant operations was 10.3 million RMB. Net income was 8.8 million RMB. Adjusted EBITDA increased 134.4 to 9.1 million RMB year-over-year. Core net income was 9.1 million RMB. Next, Selina, please introduce the profitability of our group.

Please turn to slide 27. Group net income per ADS, basic and diluted, was 1.15 RMB. Group core net income per ADS, basic and diluted, non-GAAP, was 1.25 RMB. Let's now take a look at slide 28. As of September 30, 2023, the company had total cash and cash equivalents, restricted cash, short-term investments, investments in equity securities, and time deposits of 1,331.4 million RMB, compared to 1,440.1 million RMB as of June 30, 2023. The decrease was primarily due to repayment of bank loans and investment of property, partially offset by cash from operating activities and repayment from franchisees. On slide 29, based on our performance in the first nine months of this year, we revised our full year 2023 guidance for the total revenues of our organic hotels upwards. We now expect them to grow 36% to 38% year over year. We expect total combined revenues from our restaurant and organic hotel business for the full year of 2023 to grow 17% to 19% over the 2022 levels, reflecting the impact of the closure of restaurants. Finally, a word about our share repurchase program. In October this year, the company repurchased 554,000 1,158 of its ADS from a single investor at price of USD 4.40 per ADS. For a total consideration of USD 2,438,295.20 in a private negotiated transaction, the repurchase was made under the expenses of the company's share repurchase program for a total of US dollars 10 million authorized by its board of directors for two years on October 13, 2023. This concludes our prepared remarks. Operator, we are now ready to begin the Q&A session.

Great. Thank you very much. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Dan Chee with Morgan Stanley. Please go ahead.

Hi, good morning. Thank you for the presentation, Alex, and management. It's good to hear from you again. I have two questions. Maybe let me present my first question. My first question is about our REFPA outlook. From slide seven, I observed that since the beginning of, since mid-autumn festival, there was a very linear decline in terms of the REF part as a percentage to 2019. And I think by beginning of November, it went to around 95%, which was back to, I think, April level. I'm just wondering, is this a big What was happening in the beginning of November? Was it due to low season or weakness of business? Was it due to timing, calendar differences? And what is the management's outlook for the remaining of the fourth quarter? And possibly, if you can, any outlook for 2024, please. Thank you. That was my first question.

Okay, thank you, Dan. Thank you for your question. For the first question about the RAPA comparison for the national holiday, actually this year we have eight days for the national holiday, and for the year of 2019 we have seven days. So when we compared with the RAPA with the year of 2019, compared since the very beginning of the holiday to the last day and also compared since the third of the holiday to the last day. So when we compare the third date of the holiday to the end, we find our RAPR increased by 20% over the year of 2019. But if we compare the whole period, that means from the first day to the end, we find the increase over 2019 is about 7%. Thank you, Selena. How about for November?

Early November, it seems that it has weakened a little bit to below 100% for the weekly data. Do you think that was a one-off or was there any calendar event also going on just like Golden Week?

Okay. And then, more words about your first question. So the wrap-up for the October compared with the 19, that is a 5% decrease compared with the 2019. Okay. So for the next question, for the second question, why the whole period for the national holiday, the increase is less than 10%? Because we observed the first holiday of this year, and that is less than that first day of 2019.

Let me continue to add on the comments then to Selina's comments. After the national holidays, we typically experience a slowdown period, and then the business travels and work will resume before the end of the year. But on the November, we do see a slightly downward trend on the rural part. Traditionally, our business model has been more resilient than the downward or upward challenges of the fluctuation of the hotel market. So we will observe and to see whether before the year end, whether there is going to be a major shift in upward trend. But at this moment, our November trend, we do see a slightly below the 2019 levels. So that is our projection at this moment. Because we have a relatively higher occupancy to begin with, so we may be able to adjust our pricing structure and to offset this downward pressure. Okay. So with the regarding to the 2024, we believe the economic recovery will continue, but maybe, you know, a little bit uncertain. We do not know. It might be uncertain. So our business model in the past, then you have, you know, we have observed that. and dealt with to deal with future changes. So we will report in the next quarter what we observed for the earlier part of next year. Thank you.

Thank you so much, Alex and Selena, for your detailed explanation. My last question is regarding your share repurchase program or share repurchase transaction. Can you share a little bit more of the details or rationale on this transaction in October? We know that our daily trading volume and liquidity has been relatively lower compared to our peers. So I'm just wondering, is this a one-off? transaction to just one time or does the company actively seeking from investors to do share repurchase in this sort of transaction. And is there any concern on our liquidity from the management perspective. Thank you so much.

Uh, with regard than the, um, uh, purchase of this privately negotiated transactions thinks it is not an open market transaction so it has not impacted the daily volume of our hotels of hotel you know ads the we have a relatively lower volume because the number of floating shares the percentage of things is much smaller And besides, I think that our shares has also concentrated. We are making efforts to increase, trying to structure so that we may be able to help to increase the volume of the shares. And that's as far as the... this transaction, the board believe this private investor that a block sales would benefit the entire shareholders. And so that's all I can share with you.

Thank you so much, Alex. That's it for my questions. Thank you.

Thank you. As a reminder, to ask a question, you may press star then 1. And again, to ask a question, that's star 1. The next question comes from Bruce Emmy with UBS. Please go ahead.

Thanks, Alex and Selena, for taking my questions. So I actually have two questions. And first one is regarding the hotel openings. So could you please share with us about your hotel opening plan for 2024 and your long-term hotel operation target? And the second question is still on the part. So actually, we have observed very strong leisure travel demand in the summer travel season, and also the National Day Golden Week. But some investors worry that it may be a one-off pent-up demand after China's reopening. So do you worry that this leisure travel demand could be sustainable in next year? And what's your assumption for 2024 and Q1 next year? Thank you.

Okay. Thank you for your question. Maybe I can answer the first question. Actually, for this year, we have shared the number of signed contracts last time. That is 600 till the end of this year. And we are likely to open more than 400 hotels this year. And for the next year, we plan to sign contracts to sign more than 650, that is about 650 to 680 hotels in the year of 2024. And we are likely to open 450 to 470 hotels in the next year. And that means about 12% increase of this year to 50 increase of this year. Okay.

So with regard to the raw power projection, as we discussed earlier, the remaining of the fourth quarter of 2023, we believe the pressure is there. And the raw power compared with the 2019, you know, we were trying to make the stable and reach the same level. And we do not see a significant increase that will be the same at the third quarter, like during the summer vacation, because that is driven by Alicia Tourism. And regarding the next year, because our hotels are primarily priced at the most affordable value-driven. And we do not believe that our system-wide RERPA will be impacted that much. There will be, I think, still continued demand in the leisure tourism segment, especially on the affordable segment due to the large you know portion and a larger percentage increase in the retirees and that there are you know their demand for the leisure travels and also we believe there will be gradually recovery of economic activities resulting more business travels but we certainly do not see the leisure travels will be as strong as the last summer. So in our own assumptions, the same store, the same hotel, RERPA, our goal is to maintain the same. And our system-wide RERPA increase will be an upward because we'll continue to open more mid to upscale segment hotels. And that's right now around 11% will continue to increase that percentage. And meanwhile, system-wise, we're closing down certain lease-expired hotels. And so because of the weighted change, we'll see the system-wide raw power continue to upward increase in trend for the 2024. Okay. Thank you, Selena.

Thank you, Alex, very much.

Thank you. And again, to ask a question, that's star one. The next question comes from Simon Chung with Goldman Sachs. Please go ahead. Mr. Chung, your line is open.

Hello, Simon. Sorry.

Can you hear me? Hi. Sorry. I have two questions. One is just on the hotel opening numbers that Celina was sharing. I kind of missed that. Is that $650 or $680? And then there were another $450 and $470. Was that one is gross and another one is net? That's for next year and this year? And perhaps, you know, maybe just more broadly, Given that you have given guidance for specifically the hotel as well as the restaurant segments overall for this year, perhaps you can give us a sense of your assumption for fourth quarter. What sort of rep are you expecting? What sort of hotel? And then similarly for restaurant. That's first question. And then the second question, when I look at your costs, particularly on a sequential basis, there's quite a bit of a cost saving across restaurant and hotel business. And then I've observed that your hotel EBITDA margin back to what, 47%, 48%, pretty much back to 50%. Just wanted to get a sense how you're thinking about scope for cost saving and the magnitude or potential for the margin expansion, if any. Thank you.

Thanks, Simon. I'll answer the first question. Regarding the margin, I'll leave that to Salimah. So, Simon, the 650 to 608, I believe that's what we shared with you. That's the signing up of the hotels. And the 450 to 408. 80 and so we have an internal uh projection that's the uh clo you know the opening of the hotels uh so that's the number i want to clarify uh with you um regarding the uh the uh the next quarter's raw power and we just uh uh reiterated i think that uh we continue to project and continue to work hard to achieve at least the same level of that of 2019. And so, that's on the fourth quarter of 2023. Okay. So, regarding the margin, I'll leave that to Selena.

Okay. Thank you, Simon. Here, I wrote down two questions for you. The first one is about the hotel. The restaurant margin, why was it better than before? Because in this quarter, the net income of the restaurant was nearly zero. 10 million RMB, so that's much better than before, I think for several reasons. The first one is for the seasonality reason. As the recovery of the industry, the performance of the restaurants was better than before. Second reason for Da Niao, we closed 85 unprofitable stores over the past 12 months And the profitability of the remaining hotels was much better than before. And the third reason is that we changed the franchise model. We have already begun to change the franchise model. We began to open more street stores. And the CapEx, at the very beginning of the investment, and probability was much better than before. And for Lugang, we can see the trend, the probability trend was always stable. So that's why in the third quarter, we also, for the Lugang brand, it also make money. So your second question is about the fourth quarter. Yes, after entering October, yes, we can, find the profitability was a little downward than the third quarter. However, for Danyang Brand, just as I just explained, because of the model of our franchise model has begun to be adopted, so we can expect the profitability of Danyang Brand in the fourth quarter as well, although the revenues decreased significantly much year-over-year speaking.

The future margin assignment that we projected that will slightly, will continue to improve that margin. And we hope that the previous margin we generated will achieve that and will maintain that level with the increase of our brand quality overall in terms of products and services. We'll continue to do, I think, a better job in that area. And secondly, due to the market competition, we also lowered some of our fees to our franchisees, reservation fees, such as the supporting fees in other areas. And therefore, on the top level, will see a slight impact, which will also impact our margin, but will continue to improve the internal productivity and efficiency and also using the system and improve the management efficiency. So to go back to achieve the optimum, the margin. So that is our goal. So we have observed we still need, you know, I think considering the uncertainty, and we have to work really hard to achieve that.

Thanks, Alex and Selena. Can I just double check? One more follow-up question, I guess. The fact that you think that you have been lowering your fee for franchisee in order to get more sign-up, is that what you're saying? So that you are now expecting a step up on your new hotel sign-up? Because from our perspective, I thought that the market environment has actually been very conductive to new hotel signings. But yet, did you say that you lower your fee or something? How competitive is the market? Just more broadly.

We are not talking about the sign-up fees, the sign-up for new hotels. We're considering the supporting of our existing franchisees by lowering certain ongoing central reservation fees and various fees because a number of our franchisee restaurants they still have a fair amount of obligations accumulated from the past three years. So, in other words, they not only have their current obligations, the rents, the salaries, and their... you know, the current incurring you need this payment, they also have to go back to deal with the liabilities like most of the hotel and restaurants business accumulated from the past three years. So as you know, we have shared with you The strength and also the key value system of the green tree is to help our franchisees to achieve their profitability. So we feel it is still urgent for us to help them and to increase their own profitability by adjusting some of our ongoings while continuing to maintain our healthy profit margin. And with the sign-up initial application fees, I think that in the market overall, there is a downward trend in that area. So that is a given. So I think it's going to be a very, very, both the market has full of opportunities in this hotel segment. as well as there are also more brands and companies competing in this area. So that is current, our own assessment, Simon.

Sorry, can I just clarify? So you're saying that you lowered the fee? Is that only for restaurants? I pick up, was it restaurant only or is it in general? Wherever you see difficulty, whether it's hotel and restaurant, you generally have lower fees across the board.

And how does that... No, this is... We're only talking about the hotel sector for the central reservation. You know, the central reservation fees. For the restaurants, it is more... The market is more dynamic and fluent in a way because traditionally... A lot of our restaurants, for instance, like Danya Dumplings, are located in the supermarket anchored local shopping malls. And the traffic to those supermarket malls are down significantly. So the consumer... behavior i think trend in that area so as a result we are rebalancing the next so by focusing on opening in a more stable traffic area more street from store street stores And while, you know, that closing down, those, I think, are primarily the reason in the last 12 months we closed the 80 slow-down traffic areas restaurants. But we think that with the repositioning of the restaurant locations, increase the food quality of both of our brands. we will continue to achieve the profitability. I think that's very, very important in the restaurant sector. And then, you know, try to take advantage of the new market opportunities to provide healthy and value-driven tasty food for our customers.

Thanks a lot, Alex. Thanks for the thorough answer. Thank you.

Thank you. As a reminder, to ask a question, you may press star then 1. Again, that's star 1 to ask a question. The next question is from Mayan Ma with Fuel Capital. Please go ahead.

Hello, management. Firstly, congratulations on the excellent performance in the third quarter. Could you give a separate update on the recovery of the hotel and the restaurant business in the third quarter? Thank you.

Okay, thank you for the question, Mr. Ma. Actually, in the third quarter, yes, we can find our revenue has increased by 40.1% year-over-year, speaking for the hotel business. And for restaurant business, the total revenues decreased by 13% year-over-year, That's because the closure of 85 lesoperated stores over the past 12 years. But for the same-store speaking, the third quarter's average daily sales per store has increased by 5% compared with the year of 2019. So for the EBITDA margin, we can find for the hotel business, Actually, EBITDA margin has recovered above 40%, has reached to 48%. And for the total, that means including the hotel and the restaurant, the total EBITDA margin has increased more than 13%, has reached to 37.6%. Okay. Also, there is a negative impact from the negative probability of our least-operated hotels, because we have opened more than 20 hotels during the COVID-19, and most of our least-operated hotels turned negative to positive probability since this quarter. Due to the negative impact of the least operated hotels to our EBITDA margin, the impact was about 6.5% to our EBITDA margin. That means if our least operated hotels continues to recovery 10 to positive, our blended EBITDA margin will likely to increase the other 6.5%. So that's what we observed for the third quarter's performance.

Okay, thank you.

Seeing no further questions, this concludes our question and answer session. I would like to turn the call back to Selina Yang for closing remarks.

Before the operator, there is an earlier question regarding, I have looked at the question regarding the liquidity. I think I forgot to answer that question to Dan. Dan, we only discussed about the privately negotiated block sales in this stock repurchase. Regarding the liquidity, We have also the share price. We have implemented, the Board of Directors have implemented the share purchase, repurchase program because we think the share price is undervalued and due to various factors. Number one, after we became public traded companies, we made a few merger and acquisitions. And due to the various factors, especially due to the pandemics, some of the business are not performing, were not performing up to the standard. so triggered into various resolution dispute resolutions and which also interrupted the sum of our quarterly reports and the so and also and the consumed some of the management you know that the attention and the time I think those are pretty much all resolved and So in the new areas, we will continue to maintain a more frequent and dialogue with our investors and also to share our plan and the growth and the business operations more frequently with the various investors. So, secondly, that will continue to improve our core efficiencies and to improve the system-wide standard of our hotels and the restaurant in terms of basically the products and service consistent qualities improvement. And with a consistent growth and consistent profitability, we believe the performance and also our, you know, basically our company's liquidity will demonstrate the value of our companies. And the third, we'll continue to, you know, explore ways to benefit our shareholders by deploying our current, you know, cash positions by either by resuming the routine dividend and the share repurchase or the continued investment in new opportunities. And we learned, accumulated a lot of experience in this area. And so we have also demonstrated that we're able to make most of our units performing even under some of the challenging conditions. So the last point I want to make is the large shareholders and the About 90% of the GHDs is held by GTI, a privately held company. GTI has many shareholder units. So we're also trying to change the structure and so give our shareholders the direct access to the shares of the GHD. of the GHGs and to further increase the liquidity. And then lastly, when the opportunity comes, we may also considering follow-up. offering of the shares and to further increase, again, the liquidity. So overall, our board of directors have discussed many ways in the next few years and to increase the profitability of the company and increase the share, you know, that liquidity and we hope that the share price eventually will reflect the true value of the company uh we're pretty confident in the next two you know three years or so our without many many our new you know standardized branded hotels in the strategic located areas and in a fast-growing you know the second the third tier cities and was you know unleash the new potentials of the company so that is I think the answer I would like to address then is the first question regarding the liquidity, which I forgot earlier. So thank you for raising all those great questions. And thank you for all of you for your support and continued, you know, that guidance and continued advice to the company. Okay. With that, I pass the call, I pass the microphone to Selina.

Thank you, Alex. Again, on behalf of our entire Green Tree management team, we thank you for your interest in Green Tree and your participation in today's call. If you require any further information or have plans to visit, again, thank you. On behalf of our entire Green Tree management team, we thank you for your interest in Green Tree and your participation in today's call. If you require any further information or have plans to reach us, please feel free to contact us. This concludes today's call. Thank you.

Thank you all.

The conference is now concluded. Thank you for your participation. You may now disconnect your lines.