Atour Lifestyle Holdings Limited Q4 FY2025 earnings call

• 2025 was the year of achieving the target of 2,000 good stores in China for Asia. The hotel business reached the scale target of 2,000 premier hotels and strengthened the brand through differentiated product positioning and customer experiences. The retail business continued strong growth, accounting for nearly 40% of the group's total revenue. - In 2026, the company officially released a new three - year strategy 'Chinese Experience Brand Leading'. Experience is the foundation of development and the engine, and brand is the driving force and guidance. The hotel business will further develop different brand segments like Attour Origin, SAHE, etc. The retail business will continue to promote product innovation and expansion, and deepen membership operations.

For the hotel business, in the fourth quarter, RevPar was RMB 335.7, 99.6% of the same period in 2024, with OCC at 98.8% and ADR at 101.5% of the same period in 2024. In 2025, 488 new hotels were opened, with the number of operating hotels reaching 2015 by the end of the fourth quarter, a 24.5% year - over - year increase, and the pipeline of hotels under development was 779. The retail business had full - year revenue of RMB 3.67 billion in 2025, accounting for 67% of the total growth. The hotel business' revenue from monetized hotels for the first quarter and full year of 2025 grew by 28.1% and 28.0% year - over - year to RMB 1.4 billion and RMB 5.3 billion respectively. Revenue from leased hotels for the first quarter and full year of 2025 decreased by 9.8% and 15.9% year - over - year to RMB 148 million and RMB 590 million respectively. Revenue from retail businesses for the fourth quarter and full year of 2025 increased by 52.4% and 67.0% year - over - year to RMB 1.2 billion and RMB 3.7 billion respectively.

• For the full year of 2026, currently expect total net revenues to increase by 20% to 24% compared with the full year of 2025. - Regarding net profit margin in 2026, preliminary expect the group's net profit margin to decline slightly year on year as the revenue mix of different businesses will change and resource configuration will be planned with a longer - term perspective, and GMA and RMD expense ratios are anticipated to increase. - For hotel openings in 2026, will continue to uphold strict quality requirements, focusing on core cities and key commercial areas, aiming to achieve a similar scale of openings as last year. - For retail revenue in 2026, expect retail revenue to grow by 25 to 30% year on year while focusing on consolidating core competitiveness.

Q: We've noticed that the overall industry supply growth has slowed slightly. Therefore, we'd like to ask about the recent sentiments among franchisees regarding new signings. And additionally, could you please also provide some guidance on new openings in 2026?

A: We have observed fluctuations in the overall industry supply growth rate. The industry is undergoing a profound structural upgrade. Franchisees are becoming more rational and discerning, which is positive for the long - term healthy development. We are optimistic about the signing momentum for 2026 and will ensure every new project has good market competitiveness. In terms of new openings, will continue to uphold strict quality requirements, focusing on core cities and key commercial areas, aiming to achieve a similar scale of openings as last year.

Q: Maybe can management share with us what do you think is going to be the outlook for the hotel industry in 2026? And also perhaps can comment about the first quarter Rappaport performance so far, quarter to date, as well as your view on the Rappaport trend for the rest of the year?

A: In 2025, the hotel industry experienced a moderate recovery with continued restoration of supply and demand dynamics. In 2026, the overall industry supply growth may slow down further, leisure demand remains strong. Expect REVPAR in Q1 to continue the trend of improvement. Will not provide specific guidance for RevPar in 2026, but will persist with and deepen the differentiated experience advantages of Ator, maintaining a balanced revenue management strategy for ADR and OCC to consolidate and enhance REVPAR recovery and brand value.

Q: Your line is open. Hello, I'm Lydia. Thank you for the opportunity to ask my question. My question is on the retail business, which actually had very strong growth last year. So could you share your plans for the retail business for this year and also any new product plans and also new category launch? What will be your retail revenue target for 2026?

A: Over the past few years, Attour Planet has adhered to innovation - driven and product - driven development. Will continue to focus on the deep sleep track, strengthen core categories like the pillow category, expect quilt products to grow faster, new categories like bedding and pajamas to accelerate breakthroughs. Expect retail revenue to grow by 25 to 30% year on year in 2026 while consolidating core competitiveness.

Q: So I have a financial question. So we noticed that the company's actual net profit margin in 2025 was better than initially expected at the beginning of the year. Could you talk about your expected trend for the net profit margin in 2026?

A: For the full year of 2025, our group's adjusted net profit margin was approximately 17.9%. Looking ahead to 2026, as the revenue mix of different businesses will change and resources will be allocated with a longer - term perspective, and GMA and RMD expense ratios are anticipated to increase, preliminary expect the group's net profit margin to decline slightly year on year.

Q: My question is relating to the hotel closures. We saw that company closed 92 hotels in 2025 full year, including seven lease and operated hotels. This was slightly higher than the initial estimate at the beginning of last year. Could you share the company's plan on hotel closure for the full year of 2026, providing that a gross opening in 2026 flat year - on - year?

A: Our core consideration for closure decisions is the consistency of experience. In 2026, to ensure the quality level of our overall hotel network, will still maintain a certain proactive elimination rate, currently planned to close around 80 hotels within the year.