GHG

Hotel Business:

• Planned to open 480 new hotels in 2025 (an increase from 405 in 2024).
• Aim to complete rejuvenation of portfolio slowed by pandemic by summer 2026, with 700-800 aged hotels needing upgrade.
• Phased closure of leased and managed hotels, especially in lower-tier cities, retaining select flagship properties in key cities.

Restaurant Business:

• Continued progress on strategic transformation: Franchised and Managed stores increased to almost 90% of all stores, Street stores to 50% of all stores from prior years.
• Rightsizing stores to improve profitability, with focus on growing overall number of restaurants in 2025, particularly Franchised/Managed and Street stores.

Guidance:

• Expect total revenues of Organic Hotel business for full year 2025 to be flat compared to 2024 level.
• Plan to open approximately 480 hotels in 2025 and close about 200 hotels, resulting in a net addition of 280 hotels.

Hotel Business:

• Fourth quarter Hotel revenues were RMB 240.2 million, a decrease of 17.1% year-over-year. Hotel RevPAR in Q4 2024 was RMB 116, a decrease of 9.6%. Cash from Hotel operations increased from RMB 18.4 million to RMB 68.8 million year-over-year. Net income was RMB 28.4 million compared to RMB 8.1 million in Q4 2023.
• In Q1 compared to year ago, L&O hotels RevPAR decreased by 2.1% to RMB 158, F&M hotels RevPAR decreased by 9.8% to RMB 115. Occupancy at L&O hotels decreased to 65.5% from 66.9%, and at F&M hotels decreased to 68.6% from 72.5%.

Restaurant Business:

• Fourth quarter Restaurant revenues were RMB 65.1 million, a decrease of 25.8% year-over-year. ADS decreased by 16.8%. Total costs and expenses increased by 98.7% year-over-year to RMB 187.4 million mainly due to impairment of goodwill and trademarks. Excluding impairments, total costs and expenses decreased by 14% year-over-year. Cash from operations turned positive at RMB 5.5 million in Q4 2024.
• At end of quarter, Franchised and Managed stores accounted for almost 90% of all stores (up from 78% a year ago), and Street stores accounted for 50% of all stores (up from 40% a year ago).

Risks:

• Forward-looking statements subject to known and unknown risks, uncertainties, and factors beyond company's control that could cause actual results to differ materially from forward-looking statements. Includes risks related to market conditions, lease expirations, and operational challenges in transforming businesses.

Q: What's the assumption on RevPAR for full year flat Organic Hotel revenue forecast and observation on RevPAR trend and business travel demand outlook?

A: Expect RevPAR to be flat for 2025 as first quarter saw down ~5% RevPAR, with gradual recovery in second and third quarters. Observed more cyclical demand from leisure side than business travelers.

Q: Overview of Hotel business strategy in 2025 and progress in upgrading older hotels, and strategy for Hotel L&O segment going forward?

A: Plan to open 480 new hotels in 2025, aiming to complete upgrading 700-800 aged hotels by summer 2026. Closing L&O hotels due to lease expirations and focusing resources on Tier 1 flagship hotels and Franchised/Managed segments.

Q: Expectation on Restaurant business trend of increasing Street stores and reducing mall restaurants, and 2025 restaurant openings?

A: Trend of increasing Street stores to continue due to stable foot traffic and control over operating hours. Expect 60 new restaurant openings in 2025.

Q: Progress on initiatives to increase trading liquidity in shares?

A: Evaluated options including reverse merger, focusing on profitable operations for cash flows and stable dividends, with merger and financing expected in near future.