GreenTree Hospitality Group Ltd. Q2 FY2021 earnings call

• Strong Q2 2021 performance vs Q2 2020: RevPAR up 49%, total revenues 60.7% up. Income from operations up 42.5%, net income down 14.4%, adjusted EBITDA up 44%. • Opened 23 L&O hotels in H1 2021, mostly in Chengdu and Chongqing, expected to turn profitable. • Focus on adding mid to upscale L&O hotels, expanding into Tier 3 and lower cities. • IT innovation with cloud-based platform and AI, strategic partnership with Tencent Games for eSports hotels. • Growing membership programs, exploring wellness and rural revitalization.

Total revenues increased 60.7% to RMB347.1 million. Income from operations was RMB89.3 million (42.5% increase), net income RMB80.3 million (14.4% decrease), non-GAAP adjusted EBITDA RMB111.2 million (44% increase). L&O hotels had RevPAR of RMB160 and ADR of RMB219 with 78.8% occupancy. FM hotels had RevPAR of RMB133 and ADR of RMB169 with 72.9% occupancy. Direct sales accounted for 91.1%, with individual memberships at $62M (up from $49M) and corporate memberships at $1.8M (up from $1.6M).

• Expect total revenues for 2021 to grow 25%-30% over 2020 levels and 7%-12% over 2019 levels.

• Impact of COVID-19 resurgence on travel demand. • Hotel closures due to non-compliance with brand standards. • Challenges in ramping up L&O hotels to profitability.

Q: Profitability related to L&O hotels, stage of newly opened L&O hotels?

A: Billy Ng asked about profitability of L&O hotels. Alex Xu responded that newly opened L&O hotels are in ramp-up period, typically 6-9 months, expecting positive impact in 6 months.

Q: Reporting delay, investment phase?

A: Yogesh Modak asked about reporting delay and investment phase. Alex Xu responded that reporting was late due to audit of acquired hotels, and focus is on franchise model with some L&O for strategic locations.

Q: Costs related to new L&O hotels, recurring nature, valuations of hotel acquisitions?

A: Dan Xu asked about costs related to new L&O hotels. Selina Yang responded costs are non-recurring, and valuations are based on location, property conditions.