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 Vanguestaine of Christensen, GreenTree's investor relations firm. Please proceed, Rene. Thank you, Matt. Hello, everyone, and thank you for joining us. GreenTree's earnings release was distributed earlier today and is available on our IR website at ir.998.com, as well as on PR Newswire. As a reminder, we also posted a PowerPoint presentation that accompanies our comments to the same IR website. On the call from GreenTree are Mr. Alex Xu, Chairman and Chief Executive Officer, Ms. Selina Yang, Chief Financial Officer, Ms. Megan Huang, Vice President of Sales and Marketing, and Mr. Nicky Zheng, 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, 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 by 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 Xu. Mr. Xu, 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 5. We are glad to report that our strong performance continued in the second quarter. Compared with Q2 2020, RevPAR increased 49% to RMB 134. Total revenues increased 60.7% to RMB 347.1 million. Income from operations increased 42.5% to RMB 89.3 million with a margin of 25.7%. Net income decreased 14.4% to RMB 80.3 million with a margin of 23.1%. Non-GAAP adjusted EBITDA increased 44% to RMB 111.2 million with a margin of 32.1%. 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. 20 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 adjusted EBITDA. Now, let's turn to slide seven. The second quarter saw a robust recovery in occupancy rate and the RevPAR 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 RevPAR had recovered to 96.9% and 96.2% respectively of 2019 levels, a better performance than the industry average. Slide eight reflects historical weekly RevPAR performance and compares with the 2019. During the second quarter, travel demand gradually resumed as the pandemic was better contained and life returned to normalcy, especially during the Tomb Sweeping Day and the Labor Day festival. RevPAR recovered substantially month-over-month in April, May, and June. However, the recovery and the business 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, leading to tightened travel restrictions, which inevitably negatively impacted the travel in the region. As a result, during the first week of August, RevPAR 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 the domestic travel again, resulting in a drop in RevPAR 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 mid to upscale L&O hotels in the strategic locations. Secondly, we are further expanding our hotel network into tier three and the lower cities. Thirdly, we are investing in information technology innovation, creating smarter hotels. Finally, as we mentioned, we are also trying to penetrating through 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 LO hotels, because this year, unlike previous year, we were able to secure choice locations at economically attractive rent price. All of these LO 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 2017. 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 hotel openings have been trying to thrive in tier-three and the lower cities, with 70.6% of 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 the early movers. We are early 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 the staff, ensure the reliabilities of our booking system, and deliver excellent customer service. As the esports industry is now coming to China, we have established a strategic cooperation partnership with the Tencent Games to further diversifying 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 percentage of room nights booked by corporate and 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 rural 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 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, Kai Rui, Simalu, and all their team efforts. We have a strong pipeline and expect our positive recovery to 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. Thank you, Alex. Please turn to slide 17, which highlights the year-over-year rebound in our operating metrics from the impact of COVID-19. Landed ADR increased 20.2% to 171 RMB. Occupancy rate increased 13.2% to 78.6%, and the RevPAR increased 49% to 134 RMB. We accelerated the expansion of our footprint across China, opening 201 new hotels in the second quarter. Moving to slide 18. At the end of the second quarter, we had 4,542 hotels in operation, 11.8% more than the year before. 63 of these hotels were leased and operated, or LO hotels, and the 4,479 were franchised and managed, or FM hotels. While the midscale segment remains the core of our business with 64.2% of all our hotels. We continued our expansion into the higher end segment. By the end of the second quarter, mid to upscale and luxury hotels accounted for 10% of our total portfolio, while the economy segment remained stable at 25.8%. As Alex mentioned, we also solidified our already dominant position in tier three and lower cities, where 67.7% of all our hotels were located at the end of the second quarter. These strategic advantages significantly enhanced our cross-market efforts. On slide 19, you can see that in the second quarter, we opened 201 hotels in China, compared to 111 in the second quarter 2020. Two hotels were in the luxury segment, 43 in the mid to upscale segment, 137 in the midscale segment, and 19 in the economy segment. Ten were in Tier One cities, 49 in Tier Two cities, and the remaining 142 in Tier Three and lower cities. 22.4% of hotels opened in the second quarter were in the mid to upscale and luxury segment of the market. The company closed 123 hotels. 83 due to non-compliance with the company's brand and operating standards. The remaining 40 were closed due to property-related issues. The company added 78 hotels to its portfolio. The number of hotel closures increased due to hotels' non-compliance with the company's brand and license standards. Slide 20 shows the trend of our quarterly operating performance. In the second quarter, RevPAR for our LO hotels increased to RMB 160. RevPAR for our FM hotels increased to RMB 133. ADR for our LO hotels increased to RMB 219. ADR for our FM hotels increased to RMB 169. Occupancy at our LO hotels increased to 78.8%, and occupancy at our FM hotels increased to 72.9%. As Alex mentioned earlier, performance in the second quarter was positively impacted by gradually resuming travel demand as the pandemic was better contained and life returned to normalcy, especially during the Qingming Festival and the Labor Day festival. With that, I'll pass the call over to our CFO, Selina Yang. Thank you, Megan. Please turn to slide 21. Total revenues increased 60.7% year-over-year to RMB 347.1 million. The increase was primarily due to the sustained recovery in hotel operations from the impact of COVID-19, and our newly opened LO hotel. Total revenue for FM hotel increased 37.3% to RMB 217.7 million, while total revenue from LO hotels increased 132.2% to RMB 116.9 million. On slide 22, total hotel operating costs were RMB 259.9 million, a 67.6% year-over-year increase, and a 92.4% increase compared with second quarter 2019. In the second quarter, hotel operating costs were RMB 164.4 million, up 108.3% compared with second quarter 2019. The increase was mainly attributable to the opening of 20 LO hotels since the beginning of 2021, which resulted in higher rents, higher staff headcount and compensation, higher depreciation and amortization, higher utilities and consumables, and higher ramp-up costs. Besides, hotel operating costs in the second quarter 2021 included costs from Urban that were not consolidated in the second quarter 2019 numbers. Excluding the impact from newly opened LO hotels in 2021, our hotel operating costs increased 21.9% year-over-year. Selling and marketing expenses were RMB 21.7 million, a year-over-year increase of 18.9%. An increase of 32.7% compared with second quarter 2019. The increase was mainly attributable to higher staff headcount and compensation, as well as the opening of 23 LO hotels since the beginning of 2021, which resulted in higher advertising expenses and travel expenses. General and administrative expenses were RMB 71 million, up 78.6% compared with second quarter 2019. The increase was mainly attributable to the opening of 23 LO hotels since the beginning of 2021, increased one-time consulting fees for exploring financial or investment alternatives, as well as for capital market advice, and G&A expenses from Urban, which were not consolidated in the second quarter of 2019. Excluding the impact from newly opened LO hotels and one-time consulting fees, general and administrative expenses increased 0.5%. Turning to slide 23, income from operations defined as revenue minus total operating costs and expenses was 89.3 million RMB, representing a year-over-year increase of 42.5%. The increase was mainly attributable to the sustained recovery RevPAR, but was partially offset by the operating loss of our newly opened L&O hotels in 2021. As they were ramping up operations. Operating margin was 25.7% compared to 29% a year ago. Compared with second quarter of 2019, income from operations decreased by 35.7%, and operating margin decreased from 51.4% to 25.7%. On the same slide, net income is 80.3 million RMB, with margin of 23.1%. Adjusted EBITDA increased 44% to 111.2 million RMB. Adjusted EBITDA margin decreased to 32.1% year-over-year. Core net income decreased to 78.5 million RMB with margin of 22.7%. This decrease in net income, adjusted EBITDA and core net income are mainly attributable to the increased number of L&O hotels, both newly opened and in the pipeline. Please turn to slide 24. Net income for ADS was 0.79 RMB, that's $0.12. Core net income for ADS basic and diluted non-GAAP was 0.77 RMB, that's $0.12. Let's now take a look at slide 25. As of June 30, 2021, the company had total cash and cash equivalents, restricted cash, short-term investments in equity securities and time deposits of 1.3 billion RMB, compared to 1.7 billion RMB as of March 31, 2021. The decrease from the prior quarter was primarily attributable to acquisition costs for our L&O hotels, loans to our franchisees and property investments, offset by drawing down bank facilities. We will continue to execute our growth strategy, including potential acquisitions and further support to our franchisees. On slide 26, we didn't expect the significant impact which COVID-19 has had on our business in the second half of this year. We expect total revenues for the full year of 2021 to grow 25%-30% over 2020 levels and 7%-10% over the level of 2019. This concludes our prepared remarks. Operator, we are now ready to begin the Q&A session. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Billy Ng with Bank of America. Please go ahead. Good morning, everyone. I just have one question. First of all, congratulations on the results. I'm just curious in terms of profitability, as some of the slides suggest that the leased and operated hotels have dragged the profitability, when we compare our earnings back to 2019 level, even though revenue and number of hotels and RevPAR are already back to 2019 level or in terms of number of hotels already exceeding 2019 level, our earnings is still lower than that. It seems like it's mainly because of the leased and operated hotels. My question is like, for those newly opened leased and operated hotels, what stage are they in? Are they still in the ramp up? How much improvement can we expect in the next one to two years to see the margin and RevPAR and profitability to be positively contribute to the bottom line? Billy, thank you so much. I want to give you a general guide, your direction of the status of those hotels and the reason we added, and I think that, the ramp-up period, will be, likely affected by also the COVID as well as our further. We need to make even further some improvement to those hotels. Now, in the 2017 to 2019, all the way to 2020, the hotel market has been very hot. It is very difficult to secure great locations with affordable price to set up our model hotels, especially in those area where we are having a lower penetration, such as the Southeast and the southern part of China. These newly added hotels and with a very affordable and attractive rental price. Most of them are in existing hotels that we needed to convert into our standard hotels. Whenever you take over those hotels and there is a change of the operation and the staffing and all of those necessary so-called preparation work. We expected typically those will be six to nine months, and some of them could be, you know, up to a year. We are doing the improvement in operation and CapEx and also the repositioning at the same time. We expect that in the six months to a year, those hotels were back into you know that creating a positive impact to the bottom line and also creating a model hotels in those cities. For instance, we added hotels in Shanghai, Nanjing Road, which is very difficult to find in the past. We also added a few in Chengdu, such as the busiest road, Chunxi Road. Those are great locations, I think can in the future use as a showcase for our development. One last question is, if we use RevPAR, what's the RevPAR number for those newly opened leased-and-operated hotels? What's the target of those RevPAR, let's say if we are talking about one year from now? Hi, Billy. This is Selina. Actually, you can find this quarter, our RevPAR for L&O hotels was higher than the RevPAR of our franchise FM hotels. For the newly opened hotels, the average RevPAR for them was RMB 116.1. Okay. Thank you. Our next question will come from Yogesh Modak with ClearBridge. Please go ahead. Hi there. Can you hear me? Yes. Very clearly. Hi. Why is the reporting so late? Like, I was checking when Q2 of 2020 was announced, and I think it was announced a good two months before you're announcing this Q2. Why is the reporting so late? Thank you. Thank you for your question. Actually, in the second quarter, we spent more time completing the audit process due to the acquisition of our newly opened hotels. We acquired 20 single hotels. That's the major reason. Accordingly, we plan to complete our third quarter's earnings call by the end of this year. We will try our best. Thank you. Okay. The next question I have is, you know, in a year's time, the current investment in L&O hotels is supposed to be break even or profitable. By then, you might acquire many more. Is the company entering an investment phase? You have a lot of capital available on the balance sheet, and it sounds like you think the opportunity to invest is good. Are you going to enter an investment phase where there will be a protracted period of couple of years, let's say, or more, of depressed margins as you keep investing in properties? Associated with that, you know, in the past, you've had a very capital-light business. If you're going to start investing capital in L&O hotels, have you thought about what kind of returns you're expecting to generate? How long are the leases? I'd be interested in both those things as to, is there an investment phase coming? How low will margins go? How long will margins stay depressed? What kind of return hurdles, and lease lengths are you looking at? That's a great question. I would like to address to you that our current strategy has not been changed. That we'll continue to focus on the franchise and manage the business model. We'll continue to improve our products under the customer service experience, our franchisee support system, and as said, and also the smart and digital hotel concept, and also penetrating to the third and fourth tier city. That strategy and we'll be focused and continuing. In addition, we also found many local partners and that they're very great operating teams that we can work together, empower them to do great development. As I mentioned, our Argyle Group, our Urban Group, our Jiangxi Simalu Group. And our Wuhan's Kai Rui Group, those are our strategic partners. They are also developing, focusing on franchise and managed business model. We'll use the cash to just penetrating to those weak area where we need to showcase our brand and locations. That's our primary and the strategy on the going forward. That's our current focus. At the last quarter this year, we may have added some L&O hotels, and primarily because we find those transportation hub areas, those are great locations, and it's going to be very hard to find during the normal time, and the price and rent will be higher. I hope that answers your question regarding our future business plan. Thank you. Again, if you have a question, please press star then one. Our next question will come from Dan Xu with Morgan Stanley. Please go ahead. Thank you. Good morning, Alex and Selina and Megan. This is Dan from Morgan Stanley. Thanks for the presentation. I have two quick questions, both relating to the L&O hotel openings. I think the first question is for Selina. On page 22, management is trying to break down the costs related to the newly opened L&O hotels. My question is for the CNY 67 million this quarter that's relating to the newly opened L&O hotels, and does it mean that it accounts for all three months of operations for all these newly opened hotels? And is there any one-off? My question is more about how recurring is this CNY 67 million? Should we expect the number to go higher, in the next few quarters? That's my first question. Okay. Thank you, Dan. Actually, the CNY 67 million costs for the hotels will not keep increasing in the future for the already existing 23 L&O hotels. Because for the CNY 67 million, they included, including our depreciation and amortization for this hotel's rental and personnel costs for our lease-operated hotels. As well as some advertising fees for promotion of our newly opened hotels. When past the ramp-up period, all these hotel costs will keep stable, mainly include the rent and personnel costs. That's why we don't think the hotel operating costs will keep increasing for our existing in terms of L&O hotels. Thank you. Thank you, Selina. That's very clear. My second question is on page 25. So for the cash outflows for investment and hotel acquisition, that's around CNY 370 million. Does it mean that this is the cost that we use for the 20 hotels that we acquire? What are the valuations that you use for this hotel acquisitions? Can we get a rough idea on how do you value on the hotels? Is it by per room basis, or you look at other multiples? Thank you. Okay. Dan, we use different numbers in different locations. It depends also on the current hotels location, the property conditions, the remaining tenancy period, you know. For some very new hotels, we primarily use the cost base, the per room basis, instead of the future revenue because the last quarter, you know, we identified that most of those hotels during the first quarter of this year, and the operating performance was negatively impacted by the COVID-19. We are able to secure those hotels, you know, significantly below their cost replacement basis. Thank you. Thank you, Alex Xu. Thank you. That's it for me. Again, if you have a question, please press star then one. As there are no more questions, this concludes our question and answer session. I would like to turn the conference back over to Ms. Selina Yang for any closing remarks. Thank you. In closing, on behalf of the entire GreenTree management team, we thank you for your interest and participation in today's call. If you require any further information or have plans to visit us, please feel free to contact us. Thank you all. Thank you. Thank you all. Thank you. Bye-bye. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.