Good day, and welcome to the GreenTree Hospitality Group first quarter 2024 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to René Vanguestaine. Please go ahead. Thank you, Betty. 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, and Ms. Ellen Zhao, Financial Director. Mr. Xu will present the company's performance overview for the first quarter of 2024, and Ms. Yang and Ms. Zhao 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, 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, 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 filing with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made during this conference call, are current as of today's date. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under applicable law. It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Alex Xu. Mr. Xu, please go ahead. Thanks, Renee. Hello everyone, and thank you for joining us today. Overall, we delivered some significant improvements in the first quarter with substantial increases in both operating and net incomes. Conditions in our hotel business were mixed as consumer behavior continued to evolve in a more competitive environment, while we are continuously upgrading a large portion of hotels in our portfolio. Against this scenario, we managed to deliver an 8.8% revenue increase year-over-year and a 21.1% increase in hotel Adjusted EBITDA. We believe our business matrix will improve as we are completing these upgrades and open more new hotels. We made further progress in the repositioning of our restaurant business with an absolute focus on robust profitability. We grow our network of franchisees as we further expanded the number of street stores. We have completed our closures of the restaurants in the supermarket-anchored regional shopping centers due to less food traffic to our stores. We have now completed this phase, our forward strategy, and are focused on store count growth again in regions where we have strong brand recognition. Please turn to Slide five. Compared with the first quarter of 2023, RevPAR was CNY 114, that's down 4.6%, and the restaurant ADS average daily sales per store was CNY 5,525, down 8.7%. Total revenues were CNY 352.2 million, down 7.1%. Hotel revenue reached CNY 274.8 million, that's up 8.8%, attributable to the recovery in the RevPAR of our L&O hotels, and restaurant revenue decreased to CNY 77.7 million as we continued to execute on our strategy to reposition this business. Income from operations increased to CNY 72.2 million with a margin of 20.5%. Net income was CNY 57.3 million, that's up 76%, with a margin of 16.3%. Adjusted EBITDA, that's non-GAAP, was CNY 109.4 million, that's up 17.2%, with a margin of 31.1%. Slide six shows detailed numbers for total revenues, income from operations, net income, and adjusted EBITDA. Slide seven shows the trend in our quarterly operating performance. In the first quarter, compared to a year ago, RevPAR for our L&O hotels increased by 8.9% to CNY 157. However, RevPAR for our F&M hotels decreased by 4.9% to CNY 113. ADR for our L&O hotels increased by 2.8% to CNY 235, and ADR for F&M hotels increased by 0.7% to CNY 167. Occupancy at our L&O hotels increased by 3.7% to 66.6%, and occupancy at our F&M hotels decreased by 4% to 67.9%. Slide eight highlights the growth in our membership programs, which accounted for most of our direct sales. Individual memberships grew to 93 million, up from 78 million a year ago, and the corporate memberships grew to 2.07 million, up from 1.95 million a year ago. Slide nine shows the operating performance of restaurants with ADS down 8.7% year-over-year at RMB 5,525, but up sequentially, that's mainly due to seasonality. Starting with Slide 11, I will review the results of our strategic execution across our businesses. In our hotel business, we further expanded in the mid-to-upscale segment and increased our penetration in Tier 3 and the lower cities in South China. As you can see on Slide 12, we continue to grow our mid-to-upscale segment with 498 hotels, that's 11.7% of our total portfolio at the end of the quarter, while the mid-scale segment remains the core of our hotel business at 69.1%. The economy segment ended the quarter at 19.2%. Please turn to Slide 13. We continued to expand in Tier 3 and the lower cities, and 71.8% of hotels in our current pipeline are in such cities, and we will further capitalize on the substantial opportunities in such locations. On Slide 14, we continued to focus on increasing the profitability of our restaurant businesses. Our strategy is three-pronged: close unprofitable L&O stores, increase the proportion of F&M stores, and expand the number of street stores. Franchised-and-managed restaurants accounted for 85.4% at the end of the quarter compared to 54.5% a year ago, and street stores accounted for 44.3% compared to 31% a year ago. Next, Celina Yang and Ellen Zhao will review operating and financial highlights. Thank you, Alex. Please turn to Slide 16. In the first quarter, total hotel revenues increased 8.8% to CNY 274.8 million compared to the first quarter of 2023. The increase was primarily due to the continued improvement in L&O hotels RevPAR, more newly opened L&O hotels, and offset by the decrease in F&M hotels RevPAR. Total revenues from L&O hotels were CNY 122.5 million, that's up 49.3% year-over-year, while total revenues from F&M hotels decreased 10.8% to CNY 151.2 million. On Slide 17, total hotel operating costs and expenses increased 1.7% year-over-year to CNY 206.7 million. Among the total hotel operating costs, operating costs increased 8.9% to CNY 146.2 million year-over-year, which was mainly attributable to higher utilities costs due to the improvement in L&O hotels RevPAR and higher rental and personnel costs due to the increase in the number of L&O hotels and F&M hotels. Selling and marketing expenses were CNY 15.5 million, a year-over-year increase of CNY 4.4 million, mainly due to the increase in business development and sales staff numbers. General administrative expenses were CNY 38.5 million, down 16.5% compared with the same quarter of last year. The decrease was mainly due to the reversal of bad debts resulting from the decrease in accounts receivable. Turning to Slide 18, thanks to the growth in revenues and control of costs and expenses, our hotel business improved its profitability in the first quarter. Income from hotel operations increased from CNY 52 million to CNY 70.4 million year-over-year. Net income of hotels was CNY 57.3 million compared to CNY 35 million in the first quarter of last year. Adjusted EBITDA increased 21.1% to CNY 102.4 million, and core net income increased from CNY 53 million to CNY 61 million year-over-year. Next, let me turn the call over to Ellen, the Financial Director of our restaurant business. Please turn to Slide 19. In the first quarter, we continued to reposition our restaurant business, closing unprofitable L&O stores and opening more franchised and managed stores. Total restaurant revenues were CNY 77.7 million, down 38.9% year-over-year, and total restaurant costs and expenses decreased 14.4% year-over-year to CNY 75.8 million. On Slide 20, these measures led to improved profitability. Income from restaurant operations was CNY 1.9 million. Adjusted EBITDA increased 3.7% to CNY 7.0 million year-over-year. Net profit and core net income turned from loss to break-even. Next, Celina will review the profitability of our group. Please turn to Slide 21. Thanks to the continuous and stable growth in revenue of the hotel segment and better performance in the restaurant segment, our group net income ADS, that's basic and diluted, increased by 63.2% to CNY 0.58, and core net income ADS, that's basic and diluted non-GAAP, increased by 22.3% to CNY 0.60. Let's now take a look at Slide 22. As of March 31, 2024, the company had total cash and cash equivalents, restricted cash, short-term investments, investments in equity securities, and time deposits of CNY 1,517.3 million compared to CNY 1,337.1 million as of the end of the first quarter last year. The increase was mainly due to continued improvement in our operating performance, drawing down of bank facilities, and repayment from franchisees. On Slide 23, based on our performance in the first five months of this year, we maintain our previous revenue guidance for the hotel business that we expect to grow 7%-12% year-over-year speaking. We are withdrawing our guidance for the restaurant business given the significant revenue unpredictability resulting from its strategic repositioning. 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 touch-tone 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 would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Nan Fang with QX Capital. Please go ahead. Thank you, management, for taking my question. The first question is about what's the dividend policy of GreenTree? Does the company have a plan to distribute special dividend in the future? And the second one is, can you elaborate on the strategy on our restaurant opening? Thank you. Okay, I'll take this question, Celina. Thanks, Nan. Appreciate it for the two good questions. Regarding the dividend policy, due to the pandemic impact, we actually suspended the dividend, continued the dividend policy for a while. Now, with the second year after the lift of the pandemic, we discussed and planned to continue the dividend policy like what we had before, but we have made the internal discussion, and I think next quarter we'll make an announcement regarding this, our continued dividend policy resumption. Regarding the special dividend, we will evaluate our cash position and also the investment needs for our growth, and to the extent possible, we always would like to have more dividend and also share buyback to enhance the shareholders' value, in addition to sound business practices. Okay. Then, with regard to a second question, the number of restaurant openings and growth for the balance of the year, the restaurant business for the first quarter and the second quarter, we have yet to complete it, but we'll see some of the trend that is more competitive in the restaurant landscape. And our business model, therefore, after internal discussion, is being improved, and we can combine the strengths of our franchisees' local expertise versus the local resources, and with our standard and highly efficient operating system and brand recognition, we can generate a much better return to our franchised hotels. That is what we've been doing in the last quarter. And so we will plan to open, I think, 45-50 more new restaurants by the year end. So that's the restaurant opening business. In total, we should end the year roughly by 230 ±. I hope Nan answered your question, and as we emphasized, I think focusing on the profitability of each store and building the restaurant business on the sound foundation, I think, is more important than the scale and the size at this moment. We are actually deploying a couple of smaller teams to further explore the business model of the restaurants. I would like to add one point. The restaurant ADS was down. Another reason is because we're shrinking our restaurant size, and so to make the restaurant size a little bit smaller and the operating space become more efficient. So that's another reason, I think, the restaurant ADS is down somewhat, like 8.8% or so. Okay. Thank you again for the two questions. The next question comes from Betty Du with UBS. Please go ahead. Hi, thanks very much for giving me this precious chance to ask questions. My question is regarding the hotel business as there's an obvious downtrending trend among consumption and travel. How will this affect the company's RevPAR? And are there any divergence between economy, mid-scale, and upper mid-scale segments? Many thanks. Okay, Betty, did you, let me rephrase, did you ask the RevPAR trending for the second quarter? Because I missed that a little bit. Yes. Basically, regarding the RevPAR and what's the impact of the consumer downtrending, especially on hotel RevPAR, and whether there's different trends between economy segments or upper midscale segments? Okay. Thanks, Betty. Regarding the segment, I'll leave that to Celina. But regarding the RevPAR trending down on the second quarter, we observed our RevPAR for the second quarter is trending down at the same rate as our first quarter. The first quarter, we have analyzed our RevPAR drop. We find that our RevPAR drop is caused also in a large part by our substantial number of hotels being taken out or in semi-operation to receive the upgrade and to go through the upgrade. We typically gave six months to one year of fee reduction or waiver for the hotels going through the upgrade. So therefore, it affected our global RevPAR and affects the occupancy as well. So the second quarter, we'll continue to do the hotel upgrades because we have a substantial number of hotels that need to be upgraded because of the three years of pandemic. We're accelerating the upgrading process, and that will reduce our RevPAR. We expect our RevPAR trending down at a similar rate as the first quarter. With regard to which segment, mid-upscale or midscale or low-scale trending down, I'll leave that to Celina. Okay. Thank you, Alex. And thank you, Du. If we compare with the second quarter of last year, for example, we use the year-over-year growth rate as an indicator, we will find, okay, the indicator for the middle scale segment is best. It's better than mid-to-up scale, then followed by the economy hotels. And basically, for our company, our ratio in the economic segment takes the largest portion of our total portfolio. So I think that maybe has an impact on our total performance. As a reminder, if you would like to ask a question, please press star, then one to enter the question queue. Once again, that's star, then one to ask a question. The next question comes from Alpha Wang with Goldman Sachs. Please go ahead. Thank you. Thank you for taking my question. I have two questions, if I may. The first one is, given you just mentioned in first quarter and second quarter to date, the RevPAR has been slightly down year-on-year, but we maintain our full-year revenue guidance unchanged. So could you give us a sense of what full-year RevPAR are we looking at, and what are the drivers to achieve the full-year revenue guidance? Thank you. Okay. Thanks, Alpha. Even though the RevPAR is trending down for the first and second quarter, our revenue consists of the existing hotels, the existing hotels, and also add the new hotels. And in addition, we also have some very good-performing L&O hotels. That adding together the hotel total revenue, even though with a drop of the RevPAR for the existing hotel portfolio, the increased revenue in the L&O hotels and also the new FM hotels is more than make up the loss in the existing hotels' revenue, the RevPAR. So our L&O and the new FM hotels' revenue will increase about 12%-15%. That's according to our analysis. So taking down the RevPAR decrease, so you blend them together. I'm using ballpark numbers, arriving to 7%-12% revenue increase for the year. For instance, some of our FM hotels, we have introduced a new boutique brand already performing excellent in certain regions. For instance, in the western part, one of our newer brands became the star in the region, in the entire region. Within a low season, we have achieved a RevPAR of CNY 2,000 per room per day, and expect in the high season over CNY 4,000 per room per day. So those are contributing to the revenue increase for the hotels. But on the other side, the restaurant, we expected revenue drop in total of 50%. So the groups previously, we didn't anticipate the restaurant competitiveness increased at least in the locations where we are operating dramatically. For instance, we have a large number of restaurants in the supermarket, the anchor, the regional shopping centers. We observed at least the foot traffic to our stores decreased a lot. And plus, those restaurants have a large size, large area size, large footprint. And therefore, we made a strategic decision to reduce the exposure in those locations and then expanded to franchise and manage the restaurant business where we only collect a fee. So that's resulted in the total revenue for the restaurant side is 50% down. So combined, that will drag the entire group's revenue down a little bit. But however, because the restaurant repositioning, the profitability and the lease, and the EBITDA get a boost and increased. So our total bottom-line performance will be enhanced. So we hope we will build our business on both the bottom-line and the top-line growth. So that's our RevPAR for the full year, the impact to our revenue. I hope, Alpha, that I answered your questions. Thanks. Once again, if you would like to ask a question, please press star, then one to join the question queue. The next question is a follow-up from Nan Fang with QX Capital. Please go ahead. Hello. Hello. My name is. I have another question for you. Can you take a little bit about your expansion into the higher-end segments? Thank you. Okay, Nan. We have increased our mid-to-upscale segment continuously. We have several brands that we are continuously improving the standard for both of the products and the services, such as GreenTree Eastern. We also systematically closed some of the less desirable located products. As a result, I think that will continue to have a positive impact on the group's ADR. For instance, we reported to you the L&O hotels because most of our L&O hotels, at least operated, are in the mid-to-upscale, like GreenTree Eastern. You can observe, you can see our performance has increased dramatically. This will showcase for our potential franchisee to develop more similar-branded hotels. In addition, we are also developing some cultural-based boutique hotel brand, such as if you check the Snow Hotels we developed, and has already become the local, the regional hotel stars. Combined, I think, with the combined efforts and conservative resources put into that area, we hope and we think that the mid-to-upscale segment will become a larger and larger portion of our business. And that we're confident that after the pandemic era is gone, we can focus on developing that in that segment. And we'll have more, I think, positive news to report to you the next quarter. Okay. Okay. Thank you. As a reminder, to ask a question, please press star, then one to enter the question queue. Once again, that's star, then one to ask a question. The next question is a follow-up from Alpha Wang with Goldman Sachs. Please go ahead. Thank you. Then another follow-up question is on the hotel expansion side. Could you kindly provide an update of what kind of hotel opening target we are looking at this year? If we break down by L&O versus F&M, what are we targeting? Thank you. Okay, Alpha. Like we reported last time, the total hotel opening we planned for the year is 480. Primarily, I think 99% of them are going to be franchised and managed. And so we may still do a couple of them or select very, very few and showcase L&O hotels. But our focus has always been on the franchised and managed hotels. As a reminder, to ask a question, please press star, then one to enter the question queue. That's star, then one to enter the question queue. The next question comes from Bruce Mee with UBS. Please go ahead. Okay. Hi, Alex. Hi, Celina. So thanks for taking my questions. I also have a question regarding the hotel openings. So could you please give us a geographic breakdown of the new openings? For example, how much will be in Tier 1 cities and how much will be in lower-tier cities? Thank you. Thank you for the question, Mr. Mee. Yeah. Actually, for among the 480 hotels to be open this year, I think most are still in Tier 3 and lower cities. That is about 62%-65%. Yeah. And about 15%-20% new open hotels in Tier 2, and the remaining hotels to open in the Tier 1 cities. Thank you. And to add on that, Bruce, that we have a team that used to be very strong in the eastern region, but we are enhancing the team, building a team nationwide where we have more white space in the southern part of China, like southeastern, southwestern China, and also northeastern. We have added more development members, and we're seeing a great result. So our close to 500 new hotels can be evenly, hopefully, we hope it can be evenly spread, more evenly spread across the continent of China. And the business development is a driver after the pandemic. So we're focusing more and more, even though the six strategies we had historically made our company continuously profitable, and other than some of the pandemic era, are continually improving the existing portfolio and building showcase hotels and continue to enhance our technology delivery and enhance the efficiency of our operation because our margin, that's still among the best in our service businesses. We want to continue to improve on that. In addition, we'll continue to enhance our membership benefit and program, which will increase, hopefully, the percentage of the membership contribution in the future as well. So with all of that combined with our repositioning of the restaurant business, and we'll have all lines of business are contributing to the company's profitability and the bottom line. And we're in a stronger foundation now, I think, to grow the business and that continuously. That's the reason why we also have a share buyback. Plus, as we answered earlier, and having continuous dividend policy reinstated, planned to be reinstated. All of that, we hope that we can enhance our shareholder value and that building a stronger company for both the franchisees, customers, as well as our employees' career growth. Okay. Thanks, Bruce, for your great question. As a reminder, if you have a question, please press star, then one to be joined into the queue. Once again, to ask a question, you may press star, then one on your touchtone phone. 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 in GreenTree and your 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 again. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.