Hello, ladies and gentlemen. Thank you for standing by for GreenTree's second half and fiscal year 2022 Earnings Conference Call. At this time, 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, Andrea. Hello, everyone, and thank you for joining us. We have posted a PowerPoint presentation that accompanies our comments to our IR website at ir.998.com. On the call today from GreenTree are Mr. Alex Xu, Chairman and Chief Executive Officer, Ms. Selina Yang, Chief Financial Officer, and Ms. Megan Huang, Vice President of Sales and Marketing. Mr. Xu will present the company's performance overview of the second half and the full year 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 that 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. These forward-looking statements can be identified by terminology such as may, will, expect, anticipate, is, future, intense, plans, beliefs, 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 and 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, and thank you for joining us today. First, I do want to make apology to you. Because of the delays of the posting of the PPT, the meeting was delayed for the 15 minutes. We thank you for your understanding. 2022 was a year full of change and challenges. During the first half, COVID-19 outbreaks in many parts of the country resulted in lockdowns in many cities, especially in Shanghai. As we enter the Q3, transportation restrictions were relaxed and RevPAR recovered. However, October and November brought a fresh wave of outbreaks, slowing down of our recovery once again. To our relief, thanks to the lifting of the anti-pandemic measures early December, RevPAR recovered at the end of the year to more than 95% of its pre-pandemic levels. Regardless of these external environmental changes, we continued to execute our long-term strategic growth plan that strives to assist franchisees in maintaining quality operations, extending our hotel networks, and delivering stable operating profitabilities and maintaining a healthy cash flow. Please turn to slide five. Compared with the second half of 2021, RevPAR decreased 4.2% to RMB 112. Total revenues decreased 21.1% to RMB 487.8 million. The decrease was partially due to the deconsolidation of Argyle since June 2022, and the disposal of our interest in Urban on November 25, 2022. Excluding these impacts, organic revenues decreased 15.7% compared to one year ago. Income from operations increased to RMB 20 million, a margin of 4.1%. Excluding these, income from purely operating activities decreased 17.6% to RMB 85 million, with a margin of 17.4%. The net income was negative, you know, RMB 48.3 million, with a margin of negative 9.9%. Adjusted EBITDA, that's non-GAAP, decreased 21.2% to RMB 118.3 million, with a margin of 24.3%. Cash provided by operating activities were RMB 151 million. Slide six shows detailed numbers for total revenues, operating income, net income, and adjusted EBITDA. On slide seven, operating performances was continuously impacted by COVID outbreaks during the second half of 2022. RevPAR was at 80.3% and 80.7% of the 2019 levels in the Q3 and Q4, respectively, exceeding the industry average. Slide eight shows the weekly RevPAR performance in 2022 and the Q1 of 2023 compared with 2019. In the second half of 2022, due to the resurgence of COVID-19, RevPAR fluctuated in the Q3 and was slowing down once again in October and November. RevPAR gradually recovered to more than 95% of its pre-pandemic levels in the last week of 2022. RevPAR recovery slowed again during the first half of January due to the rapid evolvement of pandemic after pandemic control were lifted in China. It recovered to around 90% of its pre-pandemic levels over the Chinese New Year, thanks to family reunions. During this festival, according to the Ministry of Culture and Tourism, the number of tourists recovered to 88.6%, and the domestic tourism revenues re-recovered to 73.1% of the levels in the same period of 2019. Such a recovery continued to increase in February, exceeding the levels of 2019. It pulled back a little bit in March due to outbreaks of influenza A in certain cities. Starting with slide 10, let's talk about the strategy and the execution with further expansion in the mid top skill segment and the Tier III and the lower cities in South China, as well as recent development in 2023 Q1 regarding the acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chains in China from our controlling shareholder. Let's take a look at slide 11. We have been continuously growing our mid top skill segment over the past few years. For a like-to-like comparison, we have excluded the Argyle and Urban hotels in the past few years. By the end of the second half of 2022, we had 426 hotels. That's 10.5% of our total hotel portfolio in this segment, up from only 50 in 2017, and we plan to open more in this year. Please turn to slide 12. Over the past five years, most of our new hotels have been in China's thriving Tier III and the lower cities. In addition, hotels in some lower tier cities are performing well, and we continue to execute our strat, you know, strategic plan. 72.6% of the hotels in our current pipelines are in such locations. Will further capitalize on the substantial opportunities in such locations. As a testament to the soundness of this strategy, over the past three years, our business in such cities was much more resilient under the impact of COVID than other cities. However, in the Q1 of 2023, with the resumption of trade shows and the government investment promotions and commissions, the recovery in Tier I and Tier II cities outpaced the recovery in the lower Tier III cities. Since Q4 of 2020, we have been building flagship LO hotels in strategic locations, especially in central China and the southeast and southwest market. During the Q1 of 2023, we opened four LO hotels in Haikou East high-speed rail station, Chongqing North high-speed rail station, Chongqing Jiangbei International Airport, and the Fuzhou high-speed rail station. Our expansion footprints covers Chongqing as well as Hubei, Jiangxi, Shanghai, and other provinces, all well located around transportation hubs, central business districts or government centers. By showcasing our brand and operating standards, we believe these hotels will also help us to attract more high-quality franchisees, further accelerating our growth in these areas. On slide 13, let me now say a few words about the acquisition of affiliated food and restaurant business. We completed the acquisition of Da Niang Dumplings and Bellagio during the Q1 of 2023. Da Niang Dumplings is a quick service restaurant chain in China, with restaurant covering 236 locations in 35 cities as of 31 December 2022. The chain had 99 operated, self-operated restaurants and 137 franchised restaurants. Bellagio is a casual dining restaurant chain with the restaurant covering 36 locations in more than 14 cities as of 31 December 2022, including in Mainland China, Macau and Southeast Asia. At the end of the last year, the chain had 27 self-operated and nine franchised restaurants. For the year of 2022, these two brands generated a combined unaudited revenue of about RMB 509 million. In demand for such healthy and affordable fast food and casual dining services should be more stable and less dependent on discretionary spending compared with our existing hotel services. We expect this acquisition business to provide a more stable revenue stream that may offset cyclical aspects of our hotel businesses. The restaurant and hotel businesses are also complementary in nature as we witness the increasing demand for food-related services in the local communities, and we expect cross-selling opportunities from the two businesses. We also expect the integration to leverage upon synergies between our respective team within our company's unique ecosystem, sharing common resources, achieving economies of scale, and improving company's overall operating performance, as demonstrated by our stable profit margin and cash flow. With the recovery of the industry, we will focus on improving operating management efficiency, launching products with exquisite decoration and higher cost, higher operating performance, widely and safely upgrade IT system, and deploy robotic system, and ultimately enhancing the profitability of our franchisees. The road to recovery is full of hope and also full of challenges. With the support of our shareholders, franchisees and employees, we are confident we'll bring better products and services and create greater value for all. Now let me turn the phone calls 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 Q4 in 2022 decreased 2.9% to RMB 165. Occupancy rate decreased 6.2% to 63%. The RevPAR decreased 11.6% to RMB 104. Moving to slide 16. For an apple-to-apple comparison, we have excluded the Argyle and Urban Hotels and presented the number of the organic hotels only. At the end of the Q4 of 2022, we had 4,059 organic hotels in operation, 5.2% more than the year before. 61 of these hotels were leased and operated or LO hotels, and 3,998 were franchised and managed or FM hotels. The mid-scale segment remains the core of our business with 72.8% of all our hotels. We continued our expansion into the higher end segment. By the end of the Q4, mid to upscale hotels accounted for 10.5% of our total portfolio, while the economy segment remained stable at 16.8%. We solidified our already dominant position in Tier III and lower cities. Where 68.2% of our hotels were located at the end of 2022. On slide 17, you can see that we opened 136 organic hotels in China, less than planned due to COVID-19. Compared to 265 in the second half of 2021. 16 were in the mid to upscale segment, 88 in the midscale segment, and 32 in the economy segment. 12.1% of these new hotels were in the mid to upscale segment of the market. Nine were in Tier I cities, 23 in Tier II cities, and the remaining 104 in Tier III and lower cities. We closed 11 hotels, and we added a net 125 hotels to our portfolio. Slide 18 show the trend of our quarterly operating performance. In the Q4 of 2022, RevPAR for our LO hotels increased to RMB 130. RevPAR for our FM hotels decreased to RMB 103. ADR for our LO hotels decreased to RMB 208. ADR for our FM hotels decreased to RMB 163. Occupancy at our LO hotels decreased to 62.4%, and occupancy at our FM hotels decreased to 63%. Entering the Q1 of 2023, RevPAR continued 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 memberships grew to 78 million, up from 69 million a year ago. Corporate members grew to 1.94 million, up from 1.85 million a year ago. We have one of the highest percentage of room night booked by corporate and individual members in the industry. With that, I'll pass call over to our CFO, Selina Yang. Thank you, Megan. Please turn to slide 20. In the second half of 2022, total revenues decreased 21.1% year-over-year to RMB 487.8 million. The decrease was primary due to the deconsolidation of Argyle and the disposal of our interest in Urban. The impact of COVID-19, which resulted in lower RevPAR at LO hotels and FM hotels. Excluding the impact of Argyle and Urban, the total revenues decreased by 15.8%, and total revenues from FM hotels were RMB 315.2 million, down 16.8% year-over-year. While total revenues from LO hotels decreased 23.6% to RMB 167.2 million. Excluding the impact of Argyle and Urban, total revenues from FM hotels decreased to 16.3%, and total revenues from LO hotels decreased 13.6% year-over-year. On slide 21, you can see that total costs and expenses decreased 3.5% year-over-year to RMB 66.8 million. Excluding the impact from our newly opened lease-operated hotels and other general expenses, the costs and expenses from ordinary course of our operating business decreased 9.1% year-over-year. Total costs and expenses are composed of hotel operating costs and expenses, selling and marketing expenses, general and administrative expenses. Hotel operating costs were RMB 286.3 million, down 21.5% year-over-year. The decrease was mainly due to the deconsolidation of Argyle and the disposal of our interest in Urban, as well as disposal of lease-operated hotels. Selling and marketing expenses were RMB 19.7 million, a year-over-year decrease of 27.4%. The decrease was mainly attributable to lower advertising expenses and staff related expenses due to less business travels caused by the pandemic and the consolidation, deconsolidation of Argyle and disposal of our interest in Urban. General and administrative expenses were RMB 111.2 million in the second half of 2022, down 13.9% compared with second half of last year. The decrease was mainly attributable to the reduction in consulting fees and the deconsolidation of Argyle and disposal of our interest in Urban. Our general expenses were RMB 65 million in the second half of 2022, which included provisions for loan receivables related to franchisee loans and impairment for certain fixed assets. Turn to slide 22. Income from operations was RMB 20 million, with a margin of 4.1%. Excluding other general expenses mentioned above, income from operating activities was RMB 5 million, with a margin of 17.4%, and net income was negative RMB 23.9 million, with a margin of negative 0.5%. Adjusted EBITDA decreased 21.2% to RMB 118.3 million. Margin was same as last year. Core net income was RMB 67.7 million with a margin of 13.9%. The decrease was primary due to the impact of newly opened hotels. If excluding the impact of newly opened and pipeline hotels, adjusted EBITDA non-GAAP for the second half of 2022 was RMB 146 million with a margin of 34.6%. Core net income non-GAAP was RMB 422 million with a margin of 13%. Please turn to slide 23. Net income per ADS was RMB negative 0.48. That's negative $0.07. Core net income per ADS basic and diluted non-GAAP was RMB 1.17, that is $0.25. Let's now take a look at slide 24. As of 31 December 2022, the company had total cash and cash equivalents, restrict cash, short-term investments in equity securities, and time deposits of RMB 1,055.5 million compared to RMB 1,079.5 million as of 30 June 2022. The decrease was primarily attributable to the repayment of bank loans offset by cash from operating activities. On slide 26. Taking into account the recovery in long-term trends and short-term industry fluctuations, we expect total revenues of hotel business for the full year of 2023 to grow 30%-35% over the 2022 levels and that is grow 5%-9% over the years of 2019 levels. Considering the merger of the restaurant business into the group and with their revenue contributions from restaurant business, we expect total revenues of the whole company for the full year of 2023 to grow 90%-95% over the 2022 levels. 50%-55% over the 2019 levels. 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 the star key followed by the number 1 on your telephone keypad. If you are using a speakerphone, you will need to pick up your handset before pressing the key. To withdraw your question, please press the star key followed by the number 2. Once again, that was star then 1 to ask a question. At this time, we will pause momentarily to assemble the roster. Our first question will come from Jane Wang of UBS. Please go ahead. Thank you management for taking my question. I have two questions in total. The first is that, we've seen the deconsolidation of Urban and, in Argyle. Do we have further merger and acquisition plans in the future? What will be the strategic difference? The second question will be, we see that the current pipeline isn't quite high at the moment. Do we receive any pressures for new hotel expansions at the moment from our hotel investors? Thank you. Okay, Jane, thank you so much for raising the question. Great questions. I will pick up those questions, Selina. Okay. With regard to the deconsolidation of Argyle and the disposal of the interest in Urban, that has not changed our strategy. I think we'll continue to explore new opportunities of merger and acquisitions. The reason is now, we also have many, you know, other smaller investment in the local strong operating teams and local companies. We have, again, valuable experience and lessons during the last four years of growth plan. With this kind of valuable experience, I think that will help us to identify more accurately, you know, more suitable partners that will further help both companies to grow our business together and to- To create a value for both of the shareholders. That is our merger and acquisition plan to supplement our main growth of organic growth. We'll, you know, we'll not lose our focus on the organic growth, which is still the main driver of our business. We have accumulated a great amount of experience during the challenging time how to maintain and healthy operation, healthy margin. Just to give you a perspective of our audience. The last three years, especially 2022, was the toughest year for the tourism and hotel industry. Just give you the perspective. The total tourism revenue for 2019, that's a benchmark year, was 6 trillion RMB. By 2020, because the first half of 2020 is a lockdown, the full year of 2020, the tourism revenue is RMB 2.3 trillion. That's like a 60% drop. Okay? 2021, we recovered back to RMB 2.8 trillion. 2022 dropped back to roughly just a little bit over RMB 2 trillion for the tourism industry. With that amount of, you know, the tourism numbers and tourism revenue drop, we have been able to maintain a healthy, stable cash flow and operation with the organic growth. We're focusing on that leveraging of the healthy and quick recovery of the industries. Meanwhile, we'll not forget about M&A market, because we still have capitals to be deployed in a more you know, disciplined way to enhance our growth rate and enhance our returns to our shareholders. Okay. However, and we'll be more disciplined and more careful and selecting the right team with a truly complementary resources compared with our organic growth, and helping us to penetrate into those, our, you know, white space and lower coverage area. The team also to have more financial discipline and have the experience in managing the business in a professional or in a systematic ways. That's our M&A plan, considering the deconsolidation and disposal of the interest of Urban. Okay. With regard to the second question of the new pipeline and then our growth rate for the new year, we have observed the 2023, the recovery in the first three months are very rapid, and we're really glad the industry resumed back to a very healthy level. Even with the quick recovery, we saw the Ministry of Culture and Tourism's forecast for this year's for the entire industry's revenues to be RMB 4.5 trillion. That's about 75% of the 2019 levels. The per capita expenditures is about RMB 900 per person, compared with a little bit close to RMB 1,000 per person in 2019 levels. The budget for individual and the business and the government traveling are still under a very tight control. This year's, our growth is going to be focusing on penetrating to areas where we're still having a slower, you know, we have a lower coverage. Also moving into the Tier I, Tier II cities into the mid to upscale segments. That we did observe, due to the last three years of pandemic, and there is a lack of adequate capitals for the franchisees, and they are more, a little more cautious than before, than before the 2019 levels. We will have to provide demonstration of our business models, the resiliencies and the operating efficiency and our supporting capabilities to our franchisees to encourage them to open, to start upgrading their existing hotel portfolios. We are confident, I think this year will resume back to closer levels 2019. Will be substantially higher than that of 2022. Thanks, Jane, for your questions. Thank you. Thank you. Very clear. The next question comes from Dan Gee of Morgan Stanley. Please go ahead. Good morning, Alex Xu, Mingyan and Selina Yang. Thanks very much for your presentation. I have two questions. The first question is regarding your guidance for full year 2023. May I get some more guidance on the RevPAR that you are assuming for the total revenue and of hotel business of 30%-35% year-on-year growth, your RevPAR assumption? Secondly, on the assumption of hotel opening, because after the deconsolidation and also the disposal of Urban, I think our hotel number dropped to around 4,000 hotels. What are our plans for 2023's hotel number as well? Thank you. That's my first question. You want to take that or you want me? Okay. All right. Thanks, Dan. The, we discussed thoroughly, internally, for RevPAR recovery of 2023 and also comparing the Q1 increase. We believe, we estimated, we forecast this year our RevPAR, we hope, will be the same as of 2019. We're back to normal levels. For the several reasons. The total, you know, tourism industry's revenue as I just reported to you, shared with you by the ministry, is that 75% of the 2019 level. In theory, the RevPAR should not be higher. They should be lower than that of 2019 level. However, I think the branded operator, especially the nationwide such as GreenTree, have a much higher capture rate of the demand, and therefore, I think that our recovery has always been much better than that of the industry. Okay? The Q1 we observed, the Tier I, Tier II city, we recovered more than the pre-pandemic levels. We believe that's due to the many, many travel needs for accumulated for the past three years. For instance, family reunions. Many people have not seen their family for three years. Government have a great and, you know, the initiative for investment promotion, so many trade shows and that investment promotion programs are spreaded in the countries, especially going to Shanghai, Beijing, Guangzhou and Shenzhen area. The recovery for this, the Tier I, Tier II city is much quicker. We believe that's the main driver. That driver will gradually, I think, back to normal. The search is Tier III, Tier IV cities, because the evolvement of the pandemic was slower, was trailing to the Tier III, Tier IV city. During the Q1 of 2023, we also see the impact by the Tier III, Tier IV city by the pandemic, as well as the influenza and also the driving forces of the convention facilities in those Tier III, Tier IV city are not as many. The Tier III, Tier IV I cities recovery is not as quick as the Tier I, Tier II. We believe that during the Q2, Q3, especially during the travel seasons and many of those cities will recover much quicker. Overall, we do expect that a stronger second or Q3 from accumulated demand from the past three years. Overall, the our projection of the recovery of the RevPAR is 100% at 2019 levels. We hope the with this year's transition of economy and many business are starting to reposition themselves. The 2024 would be a much stable for business travelers and for the leisure travelers. With regard to the hotel openings, we have a conservative estimate depend on the second and the third and Q4s recovery. The Q1, the first one, you know, January, February, was still impacted by the, you know, the rapid transition from, you know, pandemic control period to the policy and the control policy being lifted period, there is a transition, being impacted a little bit. Our assigning speed right now is about 600-800 levels per year of the new hotel contracting speed. We are also adding teams for the development, and we're able to travel a lot more. Comparing with the last year, many cities are locked down and prevented our business developers traveling, helping our franchisees. We think that we're having recovered the new hotel contract and opening speed to close to pre-pandemic levels. Meanwhile, we are also going to enhance our existing portfolios, renovations. We have slowed down quite a bit in the last few years. We initially had a renovation plan for the 2019 and the 2020 and 2021, but the reality is those three years are much tougher for the franchisees to renovate hotels, and for, you know, lack of the adequate confidence and the picture are not clear in terms of when the pandemic will be lifted. Secondly, that the lack of the travels and the quarantine period of quarantine made it difficult for the hotel to be operated. Thirdly, we also have many hotels periodically under the government demand for being used as the quarantine hotels. For those reasons, we really have not had a very strict policies for our existing hotel to be upgraded, to be renovated. But with the lifting of the pandemic measures, we are right now aggressively, proactively working with our franchisees and have a wide spread products renovation and upgrade programs. With that in place, I think we will have many, many more new fresh hotels, both on the newly opened as well as the existing hotels upgrade. I think this and next years will give us a great boost in the growth and our planned revenue both from the new hotels and from the existing hotels. Thanks, Dan. Thank you. Thank you, Alex. just one last quick question for me. with the disposal of Urban and also the consolidation of Argyle, do we expect any disposal gain or loss or any impairment that might occur later in the future, after the first half impairment already being impacted? Thank you. Okay. I will elaborate a little bit, Dan, then Selina will add. The disposal of the interest in Urban, that is completely gone, and there will be no more impairment on that end. With Argyle, because we're still the majority of the shareholders, so we have the numbers in the book, but because of the performance in 2022, we expected them lower. We had, I believe, a significant impairment in the second half of 2022 because of the Argyle portion. I'll leave the balance to Selina. Thank you, Alex. Yeah. Alex was correct. For Urban, because Urban has purchased the interest back totally, so there is no further impairment in the future for Urban. For Argyle, actually, we recorded in the long-term investment, both in P&L and the balance sheet. There is very, very, very little data in the future. Thank you. Thank you both. Very helpful. Thank you. The amount is, I, my understanding is the amount of the residual value in those long-term investment is, insignificant, Dan. Got it. Thank you. Yeah. With that, I think we'll be able to completely, you know, really focus on our core and organic growth. That give us, you know, resources. Instead of focusing on the some of the problem-solving products, give our team time and energy on just focusing on our new core organic growth plan. Thanks, Dan. The next question comes from Ma Yan of Crystal. Please go ahead. Hey. Hello, management. I have one more question. What are the company's future plans for food and beverage acquisitions? Thank you. Okay. Thanks, Ma Yan. Let me elaborate on that. As you know, hear the numbers. Our two distinguished brand in the restaurant side, many people sometimes think that, you know, legacy brand of over 20 something years. The history of the food and the restaurant services indicate that there are not too many brands in China that can survive and grow in the 20-year period. This really demonstrated that both brands resiliency and their, you know, management capabilities. We have the locations in the past of those two restaurants in high-speed train stations and in supermarket centers and in shopping malls. Those are primary locations of these restaurants. You just heard the numbers. The traffic to those areas gets reduced dramatically because of the pandemic. Some of them because of online shifting consumption trends. In the future, with the resumption of the travels. Both the traffic to the high-speed train stations, to the local supermarket centers, and to the shopping malls will resume, especially the high-speed train stations. We think those hubs will recover the quickest and the fullest. Supermarket centers and the local shopping malls still are under a lot of pressures because there are more new, you know, many new malls openings and therefore cutting back on the traffic to the existing malls. The supermarket centers, many demands are moved to online and many alternative formats in the supermarket deliveries. We as a result of that, I believe we still are managing to have a good and healthy operations for the past three years. Again, just showing to our, you know, people that the capabilities we have over there. In light of that, the new trend that our new focus of the growth plan is going to be focusing on opening more restaurants in the community centers, servicing, you know, the local communities and retirement communities in a more efficient ways. Also on the product side, we want to develop called affordable luxury and great products and great service at affordable cost. We also will enhance our delivery capabilities and to increase the percentage of the delivery revenues. Fourthly, we're also leveraging our hotel facilities and hotel resources. One of the reason, Ma Ya, we have a healthy hotel operating margin, is because we are able to managing all aspects of the hotel segments of service segment well, including, you know, breakfast, restaurant service, room revenues. As a result, and the combination of these, and we have a healthier margin than most of our competitors or than the industry average. We'll continue to leveraging that and to increase the food quality and services for both on the breakfast. In certain hotels, we started providing full day dining. We're talking about the mid-tier, you know, mid-scale hotels, not mid, you know, mid-to-high-end due to upscales. Upscales, most of the hotels we have or plan to have the full dining service component because, that's very much, you know, needed by the guests. We believe with these initiatives and also we will continue to focus on franchised restaurants. And we have seen demand for our two brands by other restaurants operators and by our own hotel franchisees. With the recovery of the economy and the lift of the pandemic measures and the increase of traffic to those regions, we do expect our food and restaurants business will be benefited greatly from those, as well as our growth plan. Thanks. Great. Thank you. Thank you. The next question comes from Peter Yang of Goldman Sachs. Please go ahead. Hi, Alex. Hi, Selina. Thanks for giving me the chance to ask questions. I have two questions. The first is on the EBITDA margin. Could you give us the same guidance as what kind of EBITDA margin we're expecting in this year and maybe next year after the top line is fully normalized? The second question is regarding the company strategy, strategic focus. Like among maybe the area of strategies the company is looking at, in terms of extending in midscale or maybe upscale segments or after acquiring the restaurant. What are the priorities for the company's strategies, and how are we going to focus or make progress on those areas? Thank you. Okay. Thanks, Peter. I will take up the second question, just talk about the strategy and our focus, and then Selina will talk to you about our projected 2023 or the margin discussion. Okay? EBITDA margin, 2023 and 2024. As we mentioned earlier, Peter, gaining the experience in the past three years made our team, I think, stronger in operating in the tough environment. We do believe the 2023, 2024 recovery period, there are still going to be a lot of challenges, meanwhile with a lot of opportunities. With a rapid recovery, and we are still not back to the 2019 levels in terms of the entire tourism industry. With that, we are clearly focusing our core and organic growth on the hotel side. Each business unit have its existing management team. Our group's management focus is going to be on the hotel core organic growth. The organic growth consists of probably three parts. First is the existing hotel portfolios renovation and upgrade. That's our key area of focus because we have been behind for the last three years, and that we need to completely upgrade and renovate many hotel products, some of them being used as a quarantine facilities, and the wear and tears are, you know, are more than the other types of usage. The second focus is to develop and opening more new hotels with especially the mid-scale to upscale levels, and by showcasing these new hotels, and we'll further, you know, influence our lower coverage area. The third focus is to improve, continue to improve our overall operating efficiencies. I'm talking about overall operating efficiencies and our many, again, sub-area we focus on, for instance, community outreach and local sales and marketing programs, and enhance our service to our guests and deliver, you know, deploy robotic technology to lower our labor cost because the labor shortage, the labor costs are a challenge for the next many years, I think, to come. to improve our information technology and to mining the data and to increase our system efficiencies to further also deploy some of the AI newly used. For instance, where even our teams are starting to experiment some of the AI tools for customer service, for sales and marketing, and for new media. Those are the focus to improve the overall hotel's operating margin and efficiencies. Those are our core focus. Then on the other side, if there are local, strong, focused hotel management companies, operators, that we have a common share, common value, common goal and the financially disciplined, then we may continue to explore this M&A. Lastly, the food and restaurants. For that, I just mention to you, our management team in the food and services define affordable luxury in light of the new economy. We want to use a lot more, they want to use a lot more on local ingredients, create customer preferred meals at affordable price and servicing their local communities. By diversifying from the supermarket centers and also shopping malls into the, directly into the local communities and become a part of the habitual and hardcore demand for the local communities, we believe that sectors will grow very healthily and generating a healthy cash flow and return to our investors. With the overall focused approach and with the recovery of the economy, we think 2020, 2023, we really plan to generate a margin and close to that of a pre-pandemic level. With that, I'm passing the rest of the questions to Selina. Thank you, Alex. Also before I answer the question, what's the EBITDA margin for the next two years, I would like to share what effects actually impact on our EBITDA margin. Actually before the COVID-19, our EBITDA margin was as high as about 50%. For the past three years, our EBITDA margin have ever reached at the lowest point that's about 25% for a series of quarters. There are three material factors that reduce the lower margin. The first one is the consolidation of the joint ventures. The second reason is due to the COVID-19, the lower revenues and the higher cost, stable costs, and especially the rental costs and our human resources costs. The third reason is that well, we opened more lease-operated hotels, especially in the mid of the mid tier scale segment, in the Tier I and Tier II cities. For the first reason, the consolidation of joint ventures affected about 10% of our EBITDA margin. For the lease-operated hotels newly opened in the past two, three years, another 10% EBITDA margin was reduced. The remaining amount of the margin decrease was about due to the COVID-19. We'll be looking forward to the year of 2023 and the next year. First, we have the consolidate of a joint venture, and we return to normal business when the COVID-19 passed away. Also, for the newly opened hotels, when they pass the ramp up period and gradually return back to the normal operation. We expect the EBITDA margin to recover about 10%-15% in 2030. That means from the 25% past another 10%-15%. For 2024, it's a little hard for us to determine the exact numbers right now. We believe the operation and the industry will recover more than better and better. Following this, we may gradually return to the normal level of EBITDA margin that is above 50% in the next two or three years. Thank you. Thanks, Selina. The next question comes from Don Lau of Oriental Value. Please go ahead. Hi, management. Thanks for taking my call. Just two quick questions. The first question is that, can you share about the current profitability of the restaurant business? The second question is that, what's the current dividend outlook for the upcoming years? Thank you. Don. I couldn't- Yeah. excuse me, Don, we could not hear you very clearly. Oh, is it better now? Repeat your question again? Oh, is it better now? Yes, better. Yes, better. Yeah. Yeah. Yes. Yeah, sorry. I'll repeat my questions. My first question is that-. Can you share about the current profitability of your restaurant business? That's the first question. The second question is that, what's the current dividend outlook for the upcoming years? Thank you. Hello? Don, we're trying to understand. The first question is that, what's the profitability level for the restaurants? Yes. Yes. Am I correct? Yes. Okay. Yeah. Yeah. Yeah. Yeah. What's the second question? The second question is the dividend outlook of the company. The dividend. Okay. Got it. Thanks, Don. We don't have the fully audited numbers of the restaurant for the 2022. I do believe that we have maintained a healthy, I think, cash flow for the restaurants. We will get to the. We'll publish the number as soon as we have them. Okay. With regard to the dividend as soon as possible, our current focus are still growing the business and that with a little bit uncertain transition period that we are a little bit uncertain about impact, the impact. As soon as I think the picture is clear and more stable, that we'll plan to resume our previous dividend practice. Okay. Okay. Understood. Okay. Understood. Understood. Would you like to add? Yeah. Uh-huh. Yeah. Sorry. Yeah. For the restaurant margin, right? I understand that the audit number for last year is not finalized yet. How about for this year, for 2023, what's your projection? We have... When we have, you know, made the acquisition and we have a full valuation by a rep, you know, the, I think most reputable valuation firm. There is a number of assumptions and projections for the restaurant business. Do you have the numbers with you on the? I think that we projected them the 2023, I think that 20%-30% gross profit margin and the with not with the too high of the revenue because at that time, we were not very clear with where the pandemic is going to be. We will, Don, report to the numbers, I think in a separate phone call, once I have those as of yet. Okay. Understood. Thank you, Management. Yeah. Thank you. Thanks, Don. The next question is a follow-up from Dan Gee of Morgan Stanley. Please go ahead. Thank you. Thank you so much. I'll wait for the queue. Hi, Alex. Regarding the F&M business, can I have one follow-up question? Can you elaborate a little bit more on the synergies between the F&M business and the hotel business? For example, because you are, I think you explained to us very clearly about organically each business, how would they perform, grow organically. Is there any synergy between the business? For example, by having Da Niang Shuijiao and Bellagio, you can channel the customers to hotel or by branding your Da Niang Shuijiao, GreenTree brand, it will help to bring more clients to Da Niang Shuijiao. Or maybe you can have a Da Niang Shuijiao in a GreenTree hotel, lobby, for example. Just trying to understand if there any synergy. maybe it's because of the membership sharing. For example, you can combine the members and you can have more target customers for your hotel or your F&M business. Just trying to understand if there's any. Okay, Alex. Thank you. Okay, Dan. That's a great question. Let me share a little bit background. The original acquisition of these brands. That's the intent of the original acquisition. The objective is to create synergies between the two segments of the businesses. In the past, you know, three or four years, the past three years, I think each unit is really trying to do their best to weather the storm and to face the challenges and to conquer the challenge. The team have not, you know, synergized in a widespread way. We did perform many, many experiments, a few experiments, now many experiments that we find there are great synergies between Bellagio and hotels. For instance. In one of our hotels, we have adopted a new concept of this branded restaurant inside the hotels. The restaurant revenue increased 500-fold, 500%. The breakfast and the meals revenues, the restaurant revenues, food service revenues, became roughly 70% of the room revenues. In other words, the room revenue is in the last year was RMB 6 million, the food and beverage side close to RMB 3 million. We did have, and we do have some great success stories in that end. However, I think the team needs to be a trend and because the last three years we have not add the team members to drive that synergies. Now with the COVID-19 measurement lifted, we have. We are right now in the process of, you know, building a dedicated team to bridge the two resources together and to expand, to replicate the success in those hotels. Without a substantial numbers then, we, the impact at this moment on the book is still not significant. We do think, in the near future, there's a substantial really synergies over there. We do not, you know, then, you know, well question sometimes, in the last few years, well, how come we have not done many of them? When the management team of each group are dedicated to focusing to improve their own operations, you know, to face the challenge, then sometimes we do not have a lot more resources to experiment those new concepts and to create new, you know, business units. Right now, we are building that to offer not only the food services, we also trying to see whether we can have other services by combining the food and the rooms and some of the facilities in the hotels really to create a better customer service experience. Meanwhile, increase our revenue in that end, then we'll report to you as we make the progress. I think this year we'll see many more. As I said, we already have a few those prototypes, but this year, we'll have many, many more with the ability to travel, with ability to expand in some key locations. We hope to gain a lot more experience in that end and to further to help the two businesses to grow. In terms of memberships, we just integrated our systems. I think that will be in deployment use in the Q2 of this year. Thank you. Thank you, Alex Xu. We hope to see more prototypes and more synergies coming up in the future. Thank you. Yeah. Great. We would like to invite you to visit that place because we find it quite, you know, I think good for the guests and good for the restaurants and good for the local community. Basically everybody benefits from that. Looking forward to it. Thank you. Thank you, Alex. Thanks. 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 plans to visit us, please feel free to contact us. Thank you all. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.