H World Group Limited Q4 FY2025 earnings call

First, shared observations on the overall travel market, noting that travel demand has shifted and lower - tier markets are new growth engines. Huazhou has been focusing on core business and fulfilling social responsibilities. In 2025, group hotel GMV grew, light - asset franchise business had solid growth, LEXI DH achieved business turnaround, and there were network expansions and brand upgrades in various segments.

Group hotel GMV in 2025 increased by 16.4% year - on - year to 108.1 billion yuan. The group's M&S revenue in 2025 reached 11.7 billion yuan, up 23.1% year - on - year, and the gross operating profit of Group M&S increased 20.8% year - on - year to 7.6 billion yuan. LEXI DH achieved adjusted EBITDA of about 500 million yuan in 2025. In 2025, group revenue grew 5.9% year - on - year to 25.3 billion yuan, and Lexi Huazhou's revenue rose 7.9% year - on - year to 20.5 billion yuan. Group adjusted EBITDA increased 24.2% year - on - year to $8.5 billion. Adjusted net income increased 32.9% year - on - year to 4.9 billion yuan. For 2026, group revenue is expected to grow 2% - 6% year - on - year, and 5% - 9% if excluding DH. Managed and franchised revenue is expected to grow 12% - 16% year - on - year. It is expected to open 2,200 - 2,300 hotels and close 600 - 700 hotels in 2026.

The guidance for 2026 is that group revenue is expected to grow 2% to 6% year - on - year, and 5% to 9% if excluding DH. Managed and franchised revenue is expected to grow 12% to 16% year - on - year. It is expected to open 2,200 to 2,300 hotels and close 600 to 700 hotels in 2026.

The industry is facing low - quality homogenization attacks, and there are potential risks and uncertainties in forward - looking statements as outlined in public filings with the SEC.

Q: Can management share the strategic directions of Arthur's new role and the expected changes in financial and growth strategy?

A: Thanked Chen Hui for past contributions, mentioned the vision of becoming a world - class hotel group and needing world - class management.

Q: Regarding 2026 revenue guidance and demand - supply outlook, what is the implied RERPA expectation and overall demand - supply outlook?

A: Observed China's hotel industry trend recovery, demand for culture and leisure growing, business travel showing rebound signs, and cautiously optimistic on RERPA in 2026.

Q: About opening schedule, plans for this year and new brands like Hunting Inn?

A: Adjusted development strategy to high - quality sustainable growth, expected to open 2,200 - 2300 hotels in 2026, and Han Ting Ying brand helps cover mass market.

Q: Details on DH's iSatellite transformation strategy, roadmap, and future hotel network expansion and financial performance?

A: Achieved DH business turnaround in 2025, continued reorganization, cost control, portfolio restructuring, and looking to expand hotel network overseas.

Q: Plan for shareholder return in upcoming years?

A: Committed to continue returning to shareholders through dividend or share repurchase.

Q: Plan for mid - and high - end hotel development?

A: Mid - and high - end is a strategic focus, using multi - brand strategy in Tier 1 and Tier 2 cities with four core brands.