Hello, ladies and gentlemen. Thank you for standing by for GreenTree's first half 2022 earnings conference call. 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 Vanguestaine of Christensen, GreenTree's investor relations firm. Please proceed, Rene. Thank you, Andrea. 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 services. 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. Alan Wang, IR Officer. Mr. Xu will present the company's performance overview of the first half of 2022, 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 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, expect, anticipate, aims, future, intend, plan, 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 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, Rene. Hello, everyone. Thank you for joining us today. The first half of 2022 was extremely challenging as COVID-19 outbreaks in many parts of the country drastically limited the mobility in many regions. Nonetheless, we continued to execute our long-term strategic growth plan to deliver continued operating profitability, maintain healthy and stable cash flow, open our all hotels in new strategic locations, and assist franchisees in maintaining quality operations. With the efforts of staff and the cooperation of the franchisees, we believe that the winter will pass eventually. The spring of the hotel industry's recovery is coming quickly. Please turn to slide 5. Compared with the first half of 2021, RevPAR decreased 20.78% to -RMB 92. Total revenues decreased 22.3% to RMB 457.4 million. Income from operations decreased 403.7% to - RMB 457.7 million with a margin of - 100.1%. The sharp decrease was due to the other general expenses, which included one-time impairments and provisions for other assets. We took impairment charges for Argyle as a result of disputes with its management as to the performance of relevant transaction documents and/or compliance with the guarantees in the agreements and Urban in connection with the sales of our interest in that company. We also took a provision for other assets related to two properties in the Hongqiao Business Center, which we intended to buy from Evergrande affiliate for our headquarters and the two flagship hotels, as well as for loan receivables related to franchisee loans. Excluding these, income from purely operating activities was RMB 32.9 million, with a margin of 7.2%. The net income was RMB 68.3 million, with a margin of 14.9%. Non-GAAP core net income decreased 13.7% to RMB 105.9 million, with a margin of 23.2%. The core net income per ADS, that's basic and diluted, non-GAAP decreased 13.7% to RMB 1.03. Slide 6 shows detailed numbers for total revenue, operating income, net income, and core net income. On Slide 7, operating performance was seriously impacted in the first half of 2022. RevPAR was at 72.6% and 65.5% of the 2019 levels in the first and second quarter, respectively, exceeding the industry's average. In the third quarter, we continued to outperform the industry, with RevPAR recovering to 80.3% of the 2019 level. Slide 8 shows the weekly RevPAR performance in 2022 compared with 2019. After dropping initially, RevPAR recovered to 88% over the Chinese New Year, thanks to family reunions and recovery in domestic tourism. However, COVID-19 outbreaks in March and April led to some restrictions in many cities and lockdowns in some major cities, sending RevPAR all the way down to 56% during Golden Weeks. As lockdowns ended, RevPAR rebounded gradually to 92.9% by the last week of June, and 91.2% at the beginning of August. October and November brought a fresh wave of outbreaks, slowing down our recovery once again and negatively impacting travel during the National Day holiday, one of the most active travel period in China. During this period, according to the Ministry of Culture and Tourism, the number of tourists dropped to 61.7%, and the domestic tourism revenues dropped to 44.2% of the levels in the same period of 2019. Our RevPAR dropped to 68%. As I said again, our performance, well exceeded the industry average during the entire period. However, with the flexible anti-pandemic measures released by the government early December, RevPAR recovered this month to more than 85% of its pre-pandemic levels. Starting with slide 10, let's talk about strategy and execution with a further expansion in the mid to upscale segment on the tier 3 and the lower cities in Southwest and Southeast China, as well as the opening of new LO hotels. Let's take a look at the slide 11. We have been continuously growing our mid-upscale segment over the past few years. By the end of the first half of 2022, we had 528 hotels, 11.3% of our total portfolio in this segment, up from only 50 in 2017. We plan to open more this year. Please turn to slide 12. Over the past 5 years, most of our new hotels have been in China's thriving tier 3 and the 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. As we continue to execute our strategic plan, 68.4% of our hotels in our current pipeline are in such cities, and we'll further capitalize on the substantial opportunities in these locations. Let's have a look at slide 13. Since 2021, we have started to build flagship LO hotels in strategic locations, especially in the southeast and the southwest markets. In 2022, despite the stress from COVID-19, we opened two mid to upscale LO hotels. The remaining four in the pipeline are expected to open in 2023 at Haikou East Railway Station, Chongqing North Railway Station, Chongqing Jiangbei International Airport, and Fuzhou Railway Station. Let me now say a few words about the acquisition of affiliated food and restaurant business. Since our announcement of signing of the SPA in May of 2022, the company has been working on the closing of the food and the restaurant acquisition transactions. Due to the resurgence of COVID-19, we experienced significant delays in the delivery of various documents to various agencies. While China removed many COVID-related restrictions in December, and the company is speeding up the closing process, we expect the formal closing will be completed in January 2023, a bit later than we originally planned. We will inform the market when the transaction formally closes. Over the past 3 years, we have adopted strict cost control measures to enhance operating efficiencies. Our adaptable business strategy as well as insights our team and franchisee have gained from facing COVID-19, have given us the ability to quickly adjust to changes in our industry, setting a solid foundation for future growth. The journey ahead may be difficult, but with the support of our shareholders, franchisees and staff, we are confident to pull through and embrace a bright future. Let me turn the call over to Megan. Thank you, Alex. Please turn to slide 15, which highlights the growth in the number of hotels and the year-over-year rebound in our operating metrics from the impact of COVID-19. Blended ADR of the second quarter in 2022 decreased 14% to RMB 147. Occupancy rate decreased 16.4% to 62.2%, and the RevPAR decreased 31.9% to RMB 91. Moving to slide 16. At the end of the second quarter of 2022, we had 4,669 hotels in operation, 2.8% more than a year before. 67 of these hotels were leased and operated, or LO hotels, and 4,602 were franchise and manage 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 hotels accounted for 11.3% of our total portfolio, while the economy segment remained stable at 24.5%. We solidified our already dominant position in tier 3 and the lower cities, where 67.8% of our hotels were located at the end of June 2022. On slide 17, you can see that we opened 201 hotels in China, less than planned due to COVID-19, compared to 402 in the first half of 2021. 43 were in the mid to upscale segment, 108 in the midscale segment, and 50 in the economy segment. 21.4% of these new hotels were in the mid to upscale segment of the market. 13 were in tier 1 cities, 52 in tier 2 cities, and the remaining 136 in tier 3 and lower cities. We closed 140 hotels. 54 due to non-compliance with our brand and operating standards. The remaining 86 were closed due to property related issues. We added a net 61 hotels to our portfolio. Slide 18 shows the trend of our quarterly operating performance. In the second quarter of 2022, RevPAR for our LO hotels increased to RMB 124. RevPAR for our FM hotels decreased to RMB 90. ADR for our LO hotels increased to RMB 217, and ADR for our FM hotels decreased to RMB 145. Occupancy at our LO hotels increased to 67.1%, and occupancy at our FM hotels increased to 62.3%. Entering the third quarter, RevPAR continues to recover for both LO hotels and FM hotels. Slide 19 highlights the growth in our membership programs, which accounted for most of our direct sales in the first half of the year. Individual members grew to 74 million, up from 62 million a year ago, and corporate members grew to 1.9 million, up from 1.8 million a year ago. We have one of the highest percentage of room nights booked by corporate and individual members in the industry. With that, I'll pass the call over to our CFO, Selina Yang. Thank you, Megan. Please turn to slide 20. In the first half of 2022, total revenues decreased 22.3% year-over-year to RMB 457.4 million. Total revenues for FM hotels were RMB 275.5 million, down 30.4% year-over-year. While total revenues for LO hotels decreased 1% to RMB 171.3 million. On slide 21, you can see that total hotel operating costs and expenses were RMB 919 million, a 100.8% year-over-year increase, which is mainly attributable to one-time provisions for other assets and higher rents and increase of other costs resulting from the expansion of our LO hotels. In the first half of the year, hotel operating costs were RMB 307.8 million, up 7.4% year-over-year. The increase was mainly attributable to the opening of 34 LO hotels since 2021, which resulted in higher rents, higher utility costs, higher staff head count and compensation, and higher depreciation and amortization. Excluding the impact for our newly opened LO hotels, our hotel operating costs decreased 14.1%. Selling and marketing expenses were RMB 18.9 billion, a year-over-year decrease of 52.7%. The decrease was mainly attributable to lower advertising expenses and staff-related expenses due to less business travels caused by the pandemic. General and administrative expenses were RMB 99.7 million in the first half of 2022, down 21.5% compared with the first half of 2021. The decrease was mainly attributable to the reduction of travel expenses and consulting fees. Other general expenses were RMB 490.6 million in the first half of 2022, which included one-time impairment charge for Argyle and Urban, one-time provisions of other assets and loan receivables, as mentioned earlier. Turning to slide 22. Income for operations was - RMB 457.7 million, down 403% year-over-year, with a margin of - 100.1%. Excluding other general expenses mentioned above, income for operating activities was RMB 32.9 million with a margin of 7.2%, and net income was RMB 68.3 million with a margin of 14.9%. Adjusted EBITDA decreased 46.8% to RMB 93.9 million, and the adjusted EBITDA margin decreased to 20.4%. Core net income was RMB 105.9 million with a margin of 23.2%. These decreases were mainly attributable to the increased number of LO hotels, both newly opened and in the pipeline. Excluding the impact of newly opened and pipeline hotels, adjusted EBITDA non-GAAP for the first half of 2022 was RMB 139.3 million, with a margin of 34.9%. Core net income non-GAAP was RMB 163.9 million with a margin of 41.1%. Please turn to slide 23. Net income per ADS was - RMB 3.8. That's $0.47. Core net income per ADS, basic and diluted non-GAAP was RMB 1.3. That's $0.15. Let's now take a look at slide 24. As of June 30, 2022, the company had total cash and cash equivalents, restrict cash, short-term investments in equity securities, and time deposits of RMB 1,079.5 million compared to RMB 1,235.9 million as of December 31st, 2021. The decrease from the end of 2021 was primarily attributable to the repayment of bank loans and the loan to an affiliate for their restaurant business, which is to be merged with the comp-company in January 2023, offset by cash from operating activities. On slide 25, given the large number of COVID outbreaks in many parts of China throughout 2022, business didn't improve as we initially expected until the easing of the restrictions early December. Consequently, we have adjusted our RevPAR guidance for the full year of 2022 to 81%-84% of the 2021 level. 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 1 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 2. Once again, that was star then 1 to ask a question. At this time, we will pause momentarily to assemble our roster. That was star, then the number 1 on your telephone keypad to ask a question. I am showing no questions at this time. I would like to turn the conference back over to Selina Yang for any closing remarks. Okay. operator and Renee, are we able to make sure that our analyst got our message and so the phone call has no problems and we're making sure all of our audience and including our analysts have listened, have been able to hear what we have discussed? I think so, Alex. There are a number of participants on the line, and everybody has been invited a few times to submit questions. Operator, can you just re-prompt one last time, please? Certainly. Once again, if you would like to ask a question on your telephone, please press the star key followed by your number 1 key on your telephone keypad. Now we have a question from Alpha Wang of Goldman Sachs. Please go ahead. Thank you. Can you hear me? Yes. Hello? Yeah. Thank you. Thank you management for the sharing. This is Alpha Wang calling from Goldman Sachs. Can management provide the raw of RevPAR and? The second, in relation to the potential conflicts with the hotel groups acquired before, do you expect any other similar incidents going forward? Thank you. Alpha, thank you so much for raising the question. The first question I couldn't hear clearly. I think the reception isn't very clear. The second, I want to repeat. You said that do we expect the similar situations like with the one or two of the groups we have acquired before? We got that. What about the first question? Yeah. Sorry for the bad signal. Can you hear me now? Yes. The first question is, could you kindly share the RevPAR and hotel ADR guidance for FY 2023, the next year? Okay. Got it. Thank you. For the RevPAR and hotel, number of hotel openings, I think that We plan to open about 600 hotels during the 2023. We still believe The first few months will be impacted by the recovery of the COVID. The operation will not be, especially on the development side, will not be, you know, recover to the full potential. In terms of RevPAR, at this moment, it's really difficult to project the RevPAR. We hope the RevPAR will minimum achieve over-overall 90% above the pre-pandemic levels during the 2023. That's considering the numbers we also received and from other industry related to the travels, related to the hotels, in terms of their projections of the recovery of the tourism market. That's for the 2023. Later Selina may add. In terms of the deconsolidation, also I want to bring to attention to everybody the reason we have a late first half of 2022's result is also because of this deconsolidation process is, you know, we did not anticipate the, you know, the delay of that cost. Looking at some of the issues, we don't think, you know, we were experiencing similar ones for others. We, the company, have enjoyed great relationships with all the partners and, because we respect and also work closely with all of our joint venture partners, with our franchisees. I think that the, you know, the conflict dispute is a one-time and we don't expect that will continue in other areas. That's why in the new year, we will continue. We have ample still capital available. We'll still plan to place them strategically at the growth of the company. Thank you, Alex. This is Selina. Yeah, Alex, maybe you can enlarge your voice so that we can hear you so more clearly. This is Selina. Thank you, Mr. Wang, for the question. We will also provide our revenue guidance for the year of 2023 at our fourth quarter performance report, earnings call. Thank you. Thank you. Thank you. You know, Selina and Oscar, why, you know, was I clear in the past? That... Sorry about that. It seems to you're a little far away from the microphone so that your voice is lower than before. Okay. All right. I move to a little closer. Okay. Thank you. we ask that you- Next question. Go ahead, sorry. The next question comes from Dan Xu of Morgan Stanley. Please go ahead. Hi. Good morning. Thank you for the presentation, Alex, Megan and Selina. I have two questions. The first question is just to clarify that we will start to deconsolidate the Argyle and Urban's numbers in our P&L starting second half, according to the announcement. When you provide the guidance for 2022, that was excluding, just to clarify, excluding Argyle and Urban. If that's so, can you kindly remind us in the first half revenue, how much of, especially Argyle's revenue was already consolidated in the first half so we know the, what kind of impact will it have for full year? That's my first question. Thank you. Okay. Thank you, Dan. Alex, may I answer the question. Sure. Of, Dan? Sure. Okay. The consolidation of Argyle since the June will result in a 2.5% decrease in our revenue if compared with the year of 2021. Also the consolidation of Urban since the fourth quarter will result in a 3% decrease in the revenue. Thank you. Thank you. Thank you, Selina. My second question was about right now, after the consolidation of Urban and Argyle, what will be our strategic partnership with, especially with Argyle, since we currently have only the Argyle brand as our luxury segment. Does it mean that we will move away from luxury segment and just focus on our Eastern and Deep Sleep and also our three GGV brands for mid and upscale? Just more about mid to upscale and also luxury strategy going forward. Thank you. Selina, I'll pick up his question. Okay. Thanks, Dan. I want to add a couple of clarifications. One more comments to the previous. I think that with the deconsolidation, we hope that we'll see a improvement of the bottom line and even though with small loss of the revenue on the top line with the deconsolidation. The decision, the board and we're making, is going to be, you know, for the benefit of everybody. With regarding to the deconsolidation of Argyle and our focus are continuing to develop our own brands, including what you just said, the five brands we have currently. I think they're all doing improving rapidly. In addition, we are also developing a higher end brands with our joint venture partners, and that we have several regional joint venture partners, and who, you know, they have experience and expertise along with us, along with our systems and focus on growing those full service 4-star or above hotel brand. We'll continue trying to expand to cover the full range of the brands in the hotel segment, which including, you know, the business and, you know, the leisure and also from the economy all the way to a 4 or 5 star. That's our long-term strategy. The current immediate focus on, we have to capitalize on the experience and the insight we have gained during the last three years operation, you know, during the COVID period, and utilize that and to actually improve our system and operating efficiencies. We think that 2023, the first half of the, six months are going to be still, you know, challenging. We are also going to utilize the time to work closely with many of our regional joint venture partners to improve our products and their products and service quality. We still have capitals available even during the three years challenging time. I think to explore more strategic investment to benefit our, you know, partners and shareholders. That's our mid to long-term strategy. Thanks Dan, for listening. Thank you. Thank you, Alex. That's it for me. Thank you. The next question comes from Peter Yang of Goldman Sachs. Please go ahead. Hi, morning Alex. Hi management. Alpha has already helped me to ask one question. Maybe just a follow-up and to confirm that the other general expenses in the second half of 2022, so there will be no more, like one time, impairment that we can expect. Is that, is my understanding correct? Thank you. Selena, would you like to pick up that question? Uh- Hi. Hi, Mr. Yang. This is Selena. I repeat your question. You want to know more detailed information about the general expenses for the year of 2022. Am I correct? Yes, for second half and, if for next year is possible. Okay. Okay, thank you. For the second half. I think for Peter's questions, whether, you know, we have this one-time impairment major for the first half of 2022. Do we expect more in the second half? Do we have any in the second half of the year or the future? We discussed, we took this very seriously, Peter, because we want to make sure all of our investments are made prudently. We set the, you know, utmost responsibility. The past 3 years, the pandemic period and really last longer than we originally expected. There are issues related to that period. We take abundant caution and I think took as much as possible, I think, for the first half of 2022. Personally, I don't expect any major impairment during the second half of the year or the future. The only thing that we indicated in the first half of 2022, because we took also care, you know, that precautions in terms of the franchisee loans, because certain product franchisee loans that we want to give our franchisee flexibility to maintain their financial health. That our accounting standard may treated that okay. Potentially there should be a provision for the loan receivables. That's the one area that we took also abundant caution for the first half of the year. Yeah, yeah, correct, Alex. Actually the other general expenses included mainly one-time provisions for the other assets just mentioned by Alex related to our two properties. Also as well as one-time impairments for the Argyle, charges for Argyle and the Urban related consolidation. Thank you. Once more, Alex, you may improve your voice a little bit higher so that otherwise we can hear. We cannot hear you very clearly. Thank you. Thanks very much. Would you mind sharing how much of the franchisee loans impairment were incurred in first half so that we know how much would roughly be carried forward in the second half? We believe that we have about 18% of our loan receivables, we don't expect any major impairments for the second half of the year for the loan receivables. Selina, again, please correct me. I'm bringing my phone a lot closer. Are you able to hear me this time clearly? Yeah. It is very clear. You are very, very, very clear. Okay, wonderful. Wonderful. Thanks. Thanks very much. That's all of my questions. Thank you. The next question comes from Bruce Mi of UBS. Please go ahead. Okay. Thanks, Alex and Selina. I have a general question on the sector overall. Given that China has lifted, significantly lifted the COVID restrictions, may I check what's your expectations on the travel demand and the franchisees' investment willingness in 2023? Because I do worry about travelers may have concerns on their health, they may, in the short term, they may be unwillingly to travel. How long will it take for the franchisees to be willing to reinvest in hotel sectors again? Thank you. Okay. Selina, I'll pick up this question. Okay. Again, remind me if I'm speaking too low or my voice too low. Okay. Thanks, Bruce, for your question. By the way, it's a great question because we're all looking at the numbers for this immediate holiday seasons, such as the New Year and the Chinese New Year. We have detected a pattern. Right, immediately right after the lift of the quarantine restrictions, our RevPAR pick up and recover very quickly to exceed the level of 2021. You know, with the wave of the COVID infections that even we experienced a lot among, you know, that even our own staff and our guests, we see our the industry, I think at least the travel industry is more cautious to travel during this period of time. We see a drop. You saw that in, I think in slide 8, I forgot. There's one page. You see a drop in the occupancy and RevPAR. I think with the wave of this re-recovery, we'll see the first two to three months, I believe should be up and down. The regions, certain regions will recover better during this holiday season. For instance, we, like Hainan and holiday destination area, we will see a big improvement on the product, you know, over the same period of last year. Business related, travels, I think year-end activities for the businesses, I believe will be probably more impacted during this season. We do expect, I think once this wave passed, everything we hope will resume to normal. Our immediate focus is also to improve the health of our staff and our guests. We're trying to implement a very strict sanitation programs and to also improve the health of employees so that we're making sure we are able to, you know, help both our people and our guests during this travel seasons. We also have implemented a program for our own travel during this holiday season. We think that different parts will be impacted differently, but after, when the spring comes, we expect that everything will be back to similar to the pre-pandemic. You know, hopefully they recover to close to pre-pandemic level. Okay. In terms of franchisees investment, we see a increase of confidence. On the other side, we all have a difficult, you know, the next 2-3 months. I think that both on the you know, our staff planning and also in terms of occupancy side, it's gonna be challenging, but we are, you know, confident and hopeful that this is a short period. I think that, with this wave of cases that we experienced. The long-term confidence of you know, of our franchisees are still there. We are, the second focus of our company is working even harder with our franchisees, with our hotel employees to, you know, to deal with this new challenge. Okay. Thanks, Alex. Very helpful. Bruce, that we do, because the reservation time in this time period is gonna be shorter and shorter, so people probably are not able to plan the holiday travel ahead of the time because they have to see the areas we've, you know, that, the impact. We looked at the numbers. I think towards the 2 weeks from now, we see the reservation numbers even better than the year of last year, than 2021. We cannot at this moment, detect to see whether this will continue, depend on the rest of the cities, the rest of the countries, how the cases are being managed. But I think that no matter how we looked at that, this is going to be a short-term phenomenon, and this will not be probably too our long term, especially China's new policy. We have a different, I think, a more prudent policy to deal with this COVID-19. We do see both of the franchisee side on the hotel and the restaurant side. I think the confidence level are much, much better, even than the past. Once again, if you would like to ask a question, please press star then 1. This concludes our question-and-answer session. I would like to turn the conference back over to Selina Yang for any closing remarks. Thank you, operator. 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 chance to reach us, please feel free to contact us. This concludes our prepared remarks. Thank you. Thank you, everyone. Our conference is now concluded. Thank you for attending today's presentation. You may now disconnect.