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

Good day and welcome to the Green Tree Hospitality Group third quarter 2024 financial results conference call. All participants will be in listen-only mode. Should you need 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. To ask a question, you may press star then one on your telephone keypad, and to withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Rene Vangerstein. Please go ahead.

Thank you, Rocco. Hello, everyone, and thank you for joining us. Green Trees 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, I'm Mr. Alex Hsu, Chairman and Chief Executive Officer, and Ms. Celina Yang, Chief Financial Officer. Mr. Hsu will present the company's performance overview for the third quarter of 2024, and Ms. Yang will then discuss financials and guidance. They will be available to answer your questions during the Q&A sessions 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 terminology such as may, will, expects, anticipates, 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 as well as 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 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 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, Renee. Hello, everyone, and thank you for joining us today. I'm pleased to report that our hotel business improved in the third quarter over the first two quarters of this year as the economy continued to recover. Travel patterns have normalized following last year's surge, which has influenced year-over-year comparisons. We're back to a more positive environment, focusing on growing our pipeline and upgrading numerous hotels across our portfolio. We are confident that we are on the right track and will benefit from the ongoing stimulus measures implemented by the government. Our restaurant business net income remained positive for a second consecutive quarter as we continued to grow the number of franchised three stores and stores with stable consumer traffic. Such stores now accounted for 55.5% of our store count, compared to 44.6% a year ago. Following the closing of unprofitable stores over the past year, the number of restaurants in operation had stabilized at 182 at the end of the quarter. We are now focusing on growing that number. Please turn to slide five. Compared with the third quarter of 2023, hotel raw power was 135 RMB, a decrease of 13.6. And the restaurant, ADS, was 4,891 RMB, a decrease of 25.6%. Total revenues were 357 million RMB, a decrease of 22.5%. Hotel revenues were 286.9 million RMB, a decrease of 15.4%, mainly due to a 13.6% year-over-year decrease in real power and the closure of all hotels. partially offset by new openings. Income from operations decreased to 106.4 million RMB with a margin of 29.8%. Net income was 65.2 million RMB, a decrease of 44.4% with a margin of 18.3%. Adjusted EBITDA non-GAAP was 122.5 million RMB, a decrease of 32.1% with a margin of 34.3%. Slide 6 shows detailed numbers for total revenues, income from operations, net income, and adjusted EBITDA. Slide 7 shows the trend in our quarterly operating performance. In the third quarter, compared to a year ago, raw power for our LO hotels decreased by 7.5% to 196 RMB. Raw power for our FM hotels decreased by 13.8% to 133 RMB. ADR for our LO hotels decreased by 3.6% to 258 RMB, and ADR for our FM hotels decreased by 6.1% to 179 RMB. Occupancy at our LO hotels decreased to 75.9% from 79%. And occupancy at our FM hotels decreased to 74.6% from 81.3%. Slide eight highlights the growth in our membership programs, which accounted for most of our direct sales. Individual memberships grow to $100 million, up from $88 million a year ago. And corporate memberships grow to $2.1 million, up from $2 million a year ago. Slide nine shows the operating performance of restaurant with ADS decreased year-over-year to RMB 4,891, but increased sequentially from quarter two. Starting with slide 11 to slide 13, I will review our strategic execution across our businesses. In our hotel business, we further expanded in the mid to upscale segment and in Tier 3 and the lower cities, especially in South China. We also added more hotels in the Tier 2 cities. As you can see on slide 12, we continued to grow our mid to upscale segment with 527 hotels. That's 12.1% of our total portfolio at the end of the quarter. While the mid-scale segment remains the core of our hotel business at 68.4%, we continue our expansion into the higher end segments. We also continue to grow our economy segment, ending the quarter at 19.5%. Please turn to slide 13. Both of our current pipeline and the hotel operations are growing in the tier two cities. On slide 14, we continued to turn around our restaurant business to ensure that it is sustainably profitable going forward by focusing on areas with greater food traffic. We have closed all stores and opened the FM stores, completing the strategic transformation to our new business model. As a result, FM restaurants accounted for 87.9% at the end of the quarter compared to 74.8% a year ago. And the street stores accounted for 48.9% compared to 38.6% a year ago. Next, Selena will review operating and financial highlights.