China Lodging Group, Limited (NASDAQ:HTHT) (“China Lodging Group”,
“Huazhu” or the “Company”), a leading and fast-growing multi-brand
hotel group in China, today announced its unaudited financial
results for the first quarter ended March 31, 2018.
First Quarter of 2018
Operational Highlights
- During the first quarter of 2018, China Lodging Group opened
127 hotels, including 7 leased (“leased-and-operated”) hotels and
120 manachised (“franchised-and-managed”) hotels and franchised
hotels.
- The Company closed a total of 56 hotels, including 5 leased
hotels and 51 manachised and franchised hotels, during the first
quarter of 2018. This was mainly due to:a) The Company's strategic
focus to upgrade the quality of the product and service. The
Company closed 3 hotels for brand upgrade purposes and permanently
removed 15 hotels from its network for their non-compliance with
the brand and operating standards. These hotels were mainly under
HanTing and Hi Inn brands. By removing hotels of lower quality, the
Company is able to provide a more consistent customer experience,
which will help enhance both the brands and future profitability.b)
Property related issues, including rezoning and returning of
military-owned properties, and expiry of leases, which resulted in
the closure of 24 hotels.c) Operating losses from hotels located
mainly in selected 3rd or lower tier cities which resulted in the
closure of 14 hotels.
- As of March 31, 2018, the Company had 673 leased hotels, 2,943
manachised hotels, and 201 franchised hotels in operation in 382
cities. The number of hotel rooms in operation totaled 384,959, an
increase of 14.6% from a year ago.
- The ADR, which is defined as the average daily rate for all
hotels in operation, was RMB207 in the first quarter of 2018,
compared with RMB182 in the first quarter of 2017 and RMB211 in the
previous quarter. The year-over-year increase of 13.9% was due to
both an increase in ADR of the mature hotels, as well as an
increase in the proportion of midscale and upscale hotels with
higher ADR in the Company’s brand mix. The sequential decrease
resulted mainly from seasonality.
- The occupancy rate for all hotels in operation was 83.7% in the
first quarter of 2018, compared with 83.9% in the first quarter of
2017 and 86.0% in the previous quarter. The occupancy rate almost
remained flat year-over-year. The sequential decrease resulted
mainly from seasonality.
- RevPAR, defined as revenue per available room for all hotels in
operation, was RMB173 in the first quarter of 2018, compared with
RMB152 in the first quarter of 2017 and RMB181 in the previous
quarter. The year-over-year increase of 13.7% was attributable to
higher ADR. The sequential decrease resulted mainly from
seasonality.
- For all hotels which had been in operation for at least 18
months, the same-hotel RevPAR was RMB165 for the first quarter of
2018, representing a 6.5% increase from RMB155 for the first
quarter of 2017, with a 6.1% increase in ADR and a
0.3-percentage-point increase in occupancy rate. The economy hotels
registered a 6.4% same-hotel RevPAR improvement, driven by a 6.1%
increase in ADR and a 0.2-percentage-point increase in occupancy
rate. The midscale and upscale hotels recorded a 6.5% same-hotel
RevPAR improvement, driven by a 5.0% increase in ADR and a
1.0-percentage-point increase in occupancy rate. Crystal Orange
Hotels will not be counted in the same-hotel RevPAR statistics
until they are in the Huazhu system for 18 months.
- As of March 31, 2018, the Company’s loyalty program had
approximately 108 million members, who contributed approximately
76% of room nights sold during the first quarter of 2018 and
approximately 87% of room nights were sold through the Company’s
own direct channels.
“We are excited to report a great start to the
year. In the first quarter, same-hotel RevPAR grew by 6.5%,
exceeding our expectation and reflecting the solid economic growth.
Our fast expansion in mid- and upscale hotels are well on track. In
the first quarter of 2018, our mid- and upscale room count
increased by 92% year-over-year, and accounted for approximately
32% and 80% in total rooms in operation and in pipeline,
respectively,” commented Ms. Jenny Zhang, Chief Executive Officer
of China Lodging Group.
“I’m also delighted to announce that we have made a
strategic investment about 4.5% in AccorHotels to strengthen our
partnership. Since our strategic alliance with AccorHotels in 2016,
we have made efforts to expand the hotel network, enhance brand
awareness and operational efficiencies. In the first quarter of
2018, Ibis and Mercure achieved same-hotel RevPAR growth of 14.5%
and 12.6%, respectively,” added Ms. Zhang. “We have also engaged
discussions with AccorHotels for a board representation. This has
been positively received by AccorHotels and shall be discussed
further in the coming weeks.”
First Quarter of 2018
Financial ResultsIn the first quarter of 2018, the Company
adopted new revenue recognition standards and all prior year
numbers are restated using the new standards. Please see the
“Accounting Standards Update” section of this release for more
information.
|
|
|
|
(RMB in
thousands) |
Q1 2017 |
Q4 2017 |
Q1 2018 |
Revenues: |
|
|
|
Leased
and owned hotels |
1,226,644 |
1,716,259 |
1,575,977 |
Manachised and franchised hotels |
379,150 |
495,851 |
508,792 |
Others |
8,268 |
13,032 |
6,455 |
Net
revenues |
1,614,062 |
2,225,142 |
2,091,224 |
|
|
|
|
Net revenues for the first
quarter of 2018 were RMB2,091.2 million (US$333.4 million),
representing a 29.6% year-over-year increase and a 6.0% sequential
decrease. The year-over-year increase was primarily due to our
hotel network expansion, improved blended RevPAR and the
acquisition of Crystal Orange Hotels. The sequential decrease was
due to seasonality.
Net revenues from leased and owned
hotels for the first quarter of 2018 were RMB1,576.0
million (US$251.2 million), representing a 28.5% year-over-year
increase and a 8.2% sequential decrease.
Net revenues from manachised and
franchised hotels for the first quarter of 2018 were
RMB508.8 million (US$81.1 million), representing a 34.2%
year-over-year increase and a 2.6% sequential increase. Net
revenues from manachised and franchised hotels accounted for 24.3%
of the Company’s net revenues in the first quarter of 2018, up from
23.5% a year ago.
Other revenues represent
revenues generated from other than hotel businesses, which mainly
include revenues from Huazhu mall and the provision of IT products
and services to hotels, totaling RMB6.5 million (US$1.0 million) in
the first quarter of 2018.
|
|
|
|
(RMB in
thousands) |
Q1 2017 |
Q4 2017 |
Q1 2018 |
Operating costs and expenses: |
|
|
|
Hotel
operating costs |
1,199,226 |
1,623,449 |
1,506,035 |
Other
operating costs |
1,933 |
6,836 |
2,842 |
Selling
and marketing expenses |
48,902 |
98,464 |
65,826 |
General
and administrative expenses |
165,343 |
236,213 |
158,752 |
Pre-opening expenses |
24,112 |
71,575 |
75,271 |
Total
operating costs and expenses |
1,439,516 |
2,036,537 |
1,808,726 |
|
|
|
|
Hotel operating costs for the
first quarter of 2018 were RMB1,506.0 million (US$240.1 million),
compared to RMB1,199.2 million in the first quarter of 2017,
representing a 25.6% year-over-year increase. Total hotel operating
costs excluding share-based compensation expenses (non-GAAP) for
the first quarter of 2018 were RMB1,501.0 million (US$239.3
million), representing 71.8% of net revenues, compared to 74.0% for
the first quarter in 2017 and 72.7% for the previous quarter. The
year-over-year decrease in the percentage was mainly attributable
to the improved blended RevPAR and the maturity of our leased and
owned hotels.
Selling and marketing expenses
for the first quarter of 2018 were RMB65.8 million (US$10.5
million), compared to RMB48.9 million in the first quarter of 2017
and RMB98.5 million in the previous quarter. Selling and marketing
expenses excluding share-based compensation expenses (non-GAAP) for
the first quarter of 2018 were RMB64.7 million (US$10.3 million),
or 3.0% of net revenues, compared to 3.0% for the first quarter of
2017 and 4.4% for the previous quarter.
General and administrative
expenses for the first quarter of 2018 were RMB158.8
million (US$25.3 million), compared to RMB165.3 million in the
first quarter of 2017 and RMB236.2 million in the previous quarter.
General and administrative expenses excluding share-based
compensation expenses (non-GAAP) for the first quarter of 2018 were
RMB147.8 million (US$23.6 million), representing 7.1% of net
revenues, compared with 9.5% of net revenues in the first quarter
of 2017 and 10.0% in the previous quarter. The year-over-year
decrease was mainly due to the one-off transaction costs related to
Crystal Orange Hotels acquisition amounting to RMB46.2 million in
first quarter of 2017.
Pre-opening expenses for the
first quarter of 2018 were RMB75.3 million (US$12.0 million),
representing a 212.2% year-over-year increase and a 5.2% sequential
increase. The year-over-year increase was mainly due to more
midscale or upscale leased hotels being under construction in the
first quarter of 2018. As of March 31, 2018, the Company had 37
midscale and upscale leased hotels under construction, as compared
to 15 as of March 31, 2017.
Income from operations for the
first quarter of 2018 was RMB306.6 million (US$48.9 million),
compared to RMB173.4 million in the first quarter of 2017 and
RMB231.2 million in the previous quarter. Excluding share-based
compensation expenses, adjusted income from operations (non-GAAP)
for the first quarter of 2018 was RMB323.7 million (US$51.6
million), compared to adjusted income from operation (non-GAAP) of
RMB189.2 million for the first quarter of 2017 and RMB250.4 million
for the previous quarter. The adjusted operating margin, defined as
adjusted operating income (non-GAAP) as percentage of net revenues,
for the first quarter of 2018 was 15.5%, compared with 11.7% in the
first quarter of 2017 and 11.3% in the previous quarter. The
improved year-over-year adjusted operating margin was mainly
attributable to the improved blended RevPAR and increased
proportion of manachised and franchised hotels.
Unrealized loss from fair value changes
of equity securities for the first quarter of 2018 was
RMB136.7 million (US$21.8 million), mainly represents the
unrealized loss from our investment in equity securities with
readily determinable fair values, such as AccorHotels and Quanjude.
According to ASU 2016-01 which was effective from January 1, 2018,
we are required to reflect the unrealized gain (loss) from fair
value changes related to equity investment (except equity method
investment) in net income. The unrealized losses from equity
securities in the first quarter of 2018 were due to the lower share
prices at end of the first quarter of 2018 compared to those at end
of the fourth quarter of 2017. The unrealized gain (loss) will have
a significant impact on our GAAP net income going forward. The
closing share price of AccorHotels was EUR46.45 on May 11, 2018.
Therefore, the unrealized gain on this AccorHotels investment in
the second quarter up to May 11, 2018 would have been approximately
RMB260 million.
Net income attributable to China Lodging
Group, Limited for the first quarter of 2018 was RMB128.5
million (US$20.5 million), compared to RMB152.6 million in the
first quarter of 2017 and RMB225.7 million in the previous quarter.
Excluding share-based compensation expenses and the unrealized loss
from fair value changes of equity securities, adjusted net income
attributable to China Lodging Group, Limited (non-GAAP) for the
first quarter of 2018 was RMB282.3 million (US$45.0 million),
representing a 67.6% year-over-year increase and a 27.9% sequential
increase.
Basic and diluted earnings per
share/ADS. For the first quarter of 2018, basic earnings
per share were RMB0.46 (US$0.07) and diluted earnings per share
were RMB0.44 (US$0.07); basic earnings per ADS were RMB1.83
(US$0.29) and diluted earnings per ADS were RMB1.75 (US$0.28). For
the first quarter of 2018, excluding share-based compensation
expenses and unrealized loss from fair value changes of equity
securities, adjusted basic earnings per share (non-GAAP) were
RMB1.01 (US$0.16) and adjusted diluted earnings per share
(non-GAAP) were RMB0.96 (US$0.15); adjusted basic earnings per ADS
(non-GAAP) were RMB4.02 (US$0.64) and adjusted diluted earnings per
ADS (non-GAAP) were RMB3.85 (US$0.61).
EBITDA (non-GAAP) for the first
quarter of 2018 was RMB405.9 million (US$64.7 million), compared
with RMB363.7 million in the first quarter of 2017 and RMB445.8
million in the previous quarter. Excluding share-based compensation
expenses and unrealized loss from fair value changes of equity
securities, adjusted EBITDA (non-GAAP) for the first quarter of
2018 was RMB559.7 million (US$89.2 million), compared with RMB379.5
million for the first quarter of 2017 and RMB440.9 million for the
previous quarter.
Cash flow. Operating cash
inflow for the first quarter of 2018 was RMB420.2 million (US$67.0
million). Investing cash outflow for the first quarter was
RMB4,023.3 million (US$641.4 million).
In the first quarter of 2018, the Company
purchased 10.8 million shares of AccorHotels from public market at
cash consideration of EUR489 million. As of March 31, 2018, the
Company held a total of 13.1 million AccorHotels shares
representing 4.5% of the company. The purchase consideration of
this investment amounted to EUR586.8 million, partly financed by a
three-year share margin financing facility totaling EUR260
million.
Cash and cash equivalents and Restricted
cash. As of March 31, 2018, the Company had a total
balance of cash and cash equivalents and restricted cash of
RMB4,044.7 million (US$644.8 million).
Debt financing. As of March 31,
2018, the Company had a total debt balance of RMB8,527.8 million
(US$1,359.5 million) and the unutilized credit facility available
to the Company was RMB830.0 million.
Adoption of New Revenue Recognition
Accounting StandardsThe Company adopted Accounting
Standards Update 2014-09, Revenue from Contracts with Customers
(Topic 606) on January 1, 2018 on a full retrospective basis in the
condensed consolidated financial statements. As such, prior period
results have been adjusted to reflect the adoption of ASU
2014-09.
The most meaningful impacts of the adoption of
ASU 2014-09 are as follows:Under previous guidance, initial
one-time franchise fee was recognized when the hotels opened for
business and the Company had fulfilled its commitments and
obligations. Upon adoption of new revenue standards the one-time
franchise fee will be recognized over the term of the franchise
contract.
Under previous guidance, the Company adopted the
incremental cost model to account for customer loyalty program. The
estimated incremental costs, net of the reimbursement received from
the franchisees, are accrued and recorded as accruals for customer
loyalty program as members accumulate points and are recognized as
cost and expense in the accompanying consolidated statements of
comprehensive income. Under new revenue standards, loyalty program
is considered a separate performance obligation and the
consideration allocated to the loyalty program will be recognized
as revenue upon point redemption, net of any cost paid to the
franchisees and other third parties.
Guidance Thanks to the
better-than-expected growth in RevPAR outlook, the Company revised
upwards the full year net revenues growth estimate from 16%-19% to
18%-22%. In the second quarter of 2018, the Company expects net
revenues to grow 24%-26% year-over-year.
The above forecast reflects the Company’s
current and preliminary view, which is subject to change.
Conference CallChina Lodging
Group’s management will host a conference call at 9 p.m. ET,
Monday, May 14, 2018 (or 9 a.m. on Tuesday, May 15, 2018 in the
Shanghai/Hong Kong time zone) following the announcement. To
participate in the event by telephone, please dial +1 (845) 675
0438 (for callers in the US), +86 400 120 0654 (for callers in
China Mainland), +852 3018 6776 (for callers in Hong Kong) or +65
6713 5440 (for callers outside of the US, China Mainland, and Hong
Kong) and enter pass code 6426629. Please dial in approximately 10
minutes before the scheduled time of the call.
A recording of the conference call will be
available after the conclusion of the conference call through May
22, 2018. Please dial +1 (855) 452 5696 (for callers in the US) or
+61 2 9003 4211 (for callers outside the US) and entering pass code
6426629.
The conference call will also be webcast live
over the Internet and can be accessed by all interested parties at
the Company’s website, http://ir.huazhu.com.
Use of Non-GAAP Financial
MeasuresTo supplement the Company’s unaudited consolidated
financial results presented in accordance with U.S. GAAP, the
Company uses the following non-GAAP measures defined as non-GAAP
financial measures by the SEC: hotel operating costs excluding
share-based compensation expenses; general and administrative
expenses excluding share-based compensation expenses; selling and
marketing expenses excluding share-based compensation expenses;
adjusted income from operations excluding share-based compensation
expenses; adjusted net income attributable to China Lodging Group,
Limited excluding share-based compensation expenses and unrealized
gain (loss) from fair value changes of equity securities; adjusted
basic and diluted earnings per share and per ADS excluding
share-based compensation expenses and unrealized gain (loss) from
fair value changes of equity securities; EBITDA; and adjusted
EBITDA excluding share-based compensation expenses and unrealized
gain (loss) from fair value changes of equity securities. The
presentation of these non-GAAP financial measures is not intended
to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with U.S. GAAP.
For more information on these non-GAAP financial measures, please
see the table captioned “Reconciliations of GAAP and non-GAAP
results” set forth at the end of this release. The Company believes
that these non-GAAP financial measures provide meaningful
supplemental information regarding Company performance by excluding
share-based compensation expenses and unrealized gain (loss) from
fair value changes of equity securities that may not be indicative
of Company operating performance. The Company believes that both
management and investors benefit from referring to these non-GAAP
financial measures in assessing Company performance and when
planning and forecasting future periods. These non-GAAP financial
measures also facilitate management’s internal comparisons to the
Company’s historical performance. The Company believes these
non-GAAP financial measures are also useful to investors in
allowing for greater transparency with respect to supplemental
information used regularly by Company management in financial and
operational decision-making. A limitation of using non-GAAP
financial measures excluding share-based compensation expenses and
unrealized gain (loss) from fair value changes of equity securities
is that share-based compensation expenses and unrealized gain
(loss) from fair value changes of equity securities have been – and
will continue to be – significant and recurring in the Company’s
business. Management compensates for these limitations by providing
specific information regarding the GAAP amounts excluded from each
non-GAAP measure. The accompanying tables have more details on the
reconciliations between GAAP financial measures that are most
directly comparable to non-GAAP financial measures.
The Company believes that EBITDA is a useful
financial metric to assess the operating and financial performance
before the impact of investing and financing transactions and
income taxes, given the significant investments that the Company
has made in leasehold improvements, depreciation and amortization
expense that comprise a significant portion of the Company’s cost
structure. In addition, the Company believes that EBITDA is widely
used by other companies in the lodging industry and may be used by
investors as a measure of financial performance. The Company
believes that EBITDA will provide investors with a useful tool for
comparability between periods because it eliminates depreciation
and amortization expense attributable to capital expenditures. The
Company also uses adjusted EBITDA, which is defined as EBITDA
before share-based compensation expenses and unrealized gain (loss)
from fair value changes of equity securities, to assess operating
results of the hotels in operation. The Company believes that the
exclusion of share-based compensation expenses and unrealized gain
(loss) from fair value changes of equity securities helps
facilitate year-on-year comparison of the results of operations as
the share-based compensation expenses and unrealized gain (loss)
from fair value changes of equity securities may not be indicative
of Company operating performance.
The company believes that unrealized gains and
losses from changes in fair value of equity securities are
generally meaningless in understanding our reported results or
evaluating our economic performance of our businesses. These gains
and losses have caused and will continue to cause significant
volatility in periodic earnings.
Therefore, the Company believes adjusted EBITDA
more closely reflects the performance capability of hotels. The
presentation of EBITDA and adjusted EBITDA should not be construed
as an indication that the Company’s future results will be
unaffected by other charges and gains considered to be outside the
ordinary course of business.
The use of EBITDA and adjusted EBITDA has
certain limitations. Depreciation and amortization expense for
various long-term assets (including land use rights), income tax,
interest expense and interest income have been and will be incurred
and are not reflected in the presentation of EBITDA. Share-based
compensation expenses and unrealized gain (loss) from fair value
changes of equity securities have been and will be incurred and are
not reflected in the presentation of adjusted EBITDA. Each of these
items should also be considered in the overall evaluation of the
results. The Company compensates for these limitations by providing
the relevant disclosure of the depreciation and amortization,
interest income, interest expense, income tax expense, share-based
compensation expenses, and unrealized gain (loss) from fair value
changes of equity securities and other relevant items both in the
reconciliations to the U.S. GAAP financial measures and in the
consolidated financial statements, all of which should be
considered when evaluating the performance of the Company.
The terms EBITDA and adjusted EBITDA are not
defined under U.S. GAAP, and neither EBITDA nor adjusted EBITDA is
a measure of net income, operating income, operating performance or
liquidity presented in accordance with U.S. GAAP. When assessing
the operating and financial performance, investors should not
consider these data in isolation or as a substitute for the
Company’s net income, operating income or any other operating
performance measure that is calculated in accordance with U.S.
GAAP. In addition, the Company’s EBITDA or adjusted EBITDA may not
be comparable to EBITDA or adjusted EBITDA – or similarly titled
measures utilized by other companies – since such other companies
may not calculate EBITDA or adjusted EBITDA in the same manner as
the Company does.
Reconciliations of the Company’s non-GAAP
financial measures, including EBITDA and adjusted EBITDA, to the
consolidated statement of operations information are included at
the end of this press release.
About China Lodging Group,
LimitedChina Lodging Group, Limited is a leading hotel
operator and franchisor in China. As of March 31, 2018, the Company
had 3,817 hotels or 384,959 rooms in operation. With a primary
focus on economy and midscale hotel segments, China Lodging Group’s
brands include Hi Inn, HanTing Hotel, Elan Hotel, HanTing Premium
Hotel, JI Hotel, Starway Hotel, Joya Hotel, Crystal Orange Hotel,
Orange Hotel Select, Orange Hotel and Manxin Hotel. The Company
also has the rights as master franchisee for Mercure, Ibis and Ibis
Styles, and co-development rights for Grand Mercure and Novotel, in
Pan-China region.
The Company's business includes leased and
owned, manachised and franchised models. Under the lease and
ownership model, the Company directly operates hotels typically
located on leased or owned properties. Under the manachise model,
the Company manages manachised hotels through the on-site hotel
managers it appoints and collects fees from franchisees. Under the
franchise model, the Company provides training, reservation and
support services to the franchised hotels and collects fees from
franchisees but does not appoint on-site hotel managers. The
Company applies a consistent standard and platform across all of
its hotels. As of March 31, 2018, China Lodging Group operates 22
percent of its hotel rooms under lease and ownership model, 78
percent under manachise and franchise models.
For more information, please visit the Company’s
website: http://ir.huazhu.com .
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995: The information in this
release contains forward-looking statements which involve risks and
uncertainties, including statements regarding the Company’s capital
needs, business strategy and expectations. Any statements contained
herein that are not statements of historical fact may be deemed to
be forward-looking statements, which may be identified by
terminology such as “may,” “should,” “will,” “expect,” “plan,”
“intend,” “anticipate,” “believe,” “estimate,” “predict,”
“potential,” “forecast,” “project,” or “continue,” the negative of
such terms or other comparable terminology. Readers should not rely
on forward-looking statements as predictions of future events or
results. Any or all of the Company’s forward-looking statements may
turn out to be wrong. They can be affected by inaccurate
assumptions, risks and uncertainties and other factors which could
cause actual events or results to be materially different from
those expressed or implied in the forward-looking statements. In
evaluating these statements, readers should consider various
factors, including the anticipated growth strategies of the
Company, the future results of operations and financial condition
of the Company, the economic conditions of China, the regulatory
environment in China, the Company’s ability to attract customers
and leverage its brands, trends and competition in the lodging
industry, the expected growth of the lodging market in China and
other factors and risks outlined in the Company’s filings with the
Securities and Exchange Commission, including its annual report on
Form 20-F and other filings. These factors may cause the Company’s
actual results to differ materially from any forward-looking
statement. In addition, new factors emerge from time to time and it
is not possible for the Company to predict all factors that may
cause actual results to differ materially from those contained in
any forward-looking statements. Any projections in this release are
based on limited information currently available to the Company,
which is subject to change. This release also contains statements
or projections that are based upon information available to the
public, as well as other information from sources which the Company
believes to be reliable, but it is not guaranteed by the Company to
be accurate, nor does the Company purport it to be complete. The
Company disclaims any obligation to publicly update any
forward-looking statements to reflect events or circumstances after
the date of this document, except as required by applicable
law.
---Financial Tables and Operational Data
Follow—
|
China Lodging Group, Limited |
Unaudited Condensed Consolidated Balance
Sheets |
|
December 31, 2017 |
|
March 31, 2018 |
|
|
RMB |
|
RMB |
|
|
US$ |
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
3,474,719 |
|
|
3,547,531 |
|
|
565,560 |
|
Restricted cash |
481,348 |
|
|
497,176 |
|
|
79,262 |
|
Short-term investments |
129,911 |
|
|
110,841 |
|
|
17,671 |
|
Accounts
receivable, net |
162,910 |
|
|
198,529 |
|
|
31,651 |
|
Loan
receivables |
380,580 |
|
|
160,675 |
|
|
25,615 |
|
Amounts
due from related parties |
118,537 |
|
|
112,416 |
|
|
17,922 |
|
Prepaid
rent |
659,973 |
|
|
563,521 |
|
|
89,838 |
|
Inventories |
24,006 |
|
|
27,217 |
|
|
4,339 |
|
Other
current assets |
329,140 |
|
|
313,216 |
|
|
49,933 |
|
Total
current assets |
5,761,124 |
|
|
5,531,122 |
|
|
881,791 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
4,522,878 |
|
|
4,654,417 |
|
|
742,024 |
|
Intangible assets, net |
1,643,972 |
|
|
1,634,631 |
|
|
260,599 |
|
Land
use rights |
140,108 |
|
|
138,764 |
|
|
22,122 |
|
Long-term investments |
2,361,969 |
|
|
6,039,743 |
|
|
962,877 |
|
Goodwill |
2,264,758 |
|
|
2,264,759 |
|
|
361,056 |
|
Loan
receivables |
42,330 |
|
|
124,379 |
|
|
19,829 |
|
Other
assets |
364,660 |
|
|
351,617 |
|
|
56,056 |
|
Deferred tax assets |
405,975 |
|
|
401,162 |
|
|
63,954 |
|
Total
assets |
17,507,774 |
|
|
21,140,594 |
|
|
3,370,308 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Short-term debt |
130,815 |
|
|
345,888 |
|
|
55,143 |
|
Accounts
payable |
766,565 |
|
|
720,854 |
|
|
114,921 |
|
Amounts
due to related parties |
36,890 |
|
|
120,813 |
|
|
19,261 |
|
Salary
and welfare payables |
427,070 |
|
|
243,623 |
|
|
38,839 |
|
Deferred
revenue |
942,651 |
|
|
1,003,154 |
|
|
159,925 |
|
Accrued
expenses and other current liabilities |
1,249,032 |
|
|
1,302,380 |
|
|
207,631 |
|
Income
tax payable |
218,238 |
|
|
99,218 |
|
|
15,818 |
|
Total
current liabilities |
3,771,261 |
|
|
3,835,930 |
|
|
611,538 |
|
|
|
|
|
|
|
|
|
|
Long-term debt |
4,921,774 |
|
|
8,181,918 |
|
|
1,304,390 |
|
Deferred
rent |
1,380,484 |
|
|
1,401,277 |
|
|
223,395 |
|
Deferred
revenue |
398,303 |
|
|
396,444 |
|
|
63,203 |
|
Other
long-term liabilities |
380,578 |
|
|
401,000 |
|
|
63,929 |
|
Deferred
tax liabilities |
422,090 |
|
|
419,950 |
|
|
66,950 |
|
Total
liabilities |
11,274,490 |
|
|
14,636,519 |
|
|
2,333,405 |
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
Ordinary
shares |
212 |
|
|
213 |
|
|
34 |
|
Treasury
shares |
(107,331 |
) |
|
(107,331 |
) |
|
(17,111 |
) |
Additional paid-in capital |
3,624,135 |
|
|
3,641,310 |
|
|
580,511 |
|
Retained
earnings |
2,512,719 |
|
|
2,681,883 |
|
|
427,555 |
|
Accumulated other comprehensive income |
167,965 |
|
|
252,499 |
|
|
40,254 |
|
Total
China Lodging Group, Limited shareholders' equity |
6,197,700 |
|
|
6,468,574 |
|
|
1,031,243 |
|
Noncontrolling interest |
35,584 |
|
|
35,501 |
|
|
5,660 |
|
Total
equity |
6,233,284 |
|
|
6,504,075 |
|
|
1,036,903 |
|
Total
liabilities and equity |
17,507,774 |
|
|
21,140,594 |
|
|
3,370,308 |
|
|
|
|
|
|
|
|
|
|
|
China Lodging Group, Limited |
Unaudited Condensed Consolidated Statements of
Comprehensive Income |
|
Quarter Ended |
|
March 31, 2017 |
|
|
December 31, 2017 |
|
|
March 31, 2018 |
|
|
RMB |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
(in thousands, except per share and per ADS
data) |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Leased and owned hotels |
1,226,644 |
|
|
1,716,259 |
|
|
1,575,977 |
|
|
251,248 |
|
Manachised and franchised hotels |
379,150 |
|
|
495,851 |
|
|
508,792 |
|
|
81,113 |
|
Others |
8,268 |
|
|
13,032 |
|
|
6,455 |
|
|
1,029 |
|
Net revenues |
1,614,062 |
|
|
2,225,142 |
|
|
2,091,224 |
|
|
333,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Hotel operating costs: |
|
|
|
|
|
|
|
|
|
|
|
Rents |
(463,138 |
) |
|
(560,178 |
) |
|
(564,372 |
) |
|
(89,974 |
) |
Utilities |
(101,974 |
) |
|
(89,418 |
) |
|
(125,534 |
) |
|
(20,013 |
) |
Personnel costs |
(280,357 |
) |
|
(412,990 |
) |
|
(375,935 |
) |
|
(59,933 |
) |
Depreciation and amortization |
(169,567 |
) |
|
(204,147 |
) |
|
(211,111 |
) |
|
(33,656 |
) |
Consumables, food and beverage |
(108,701 |
) |
|
(154,454 |
) |
|
(144,432 |
) |
|
(23,026 |
) |
Others |
(75,489 |
) |
|
(202,262 |
) |
|
(84,651 |
) |
|
(13,495 |
) |
Total hotel operating costs |
(1,199,226 |
) |
|
(1,623,449 |
) |
|
(1,506,035 |
) |
|
(240,097 |
) |
Other operating costs |
(1,933 |
) |
|
(6,836 |
) |
|
(2,842 |
) |
|
(453 |
) |
Selling and marketing expenses |
(48,902 |
) |
|
(98,464 |
) |
|
(65,826 |
) |
|
(10,494 |
) |
General and administrative expenses |
(165,343 |
) |
|
(236,213 |
) |
|
(158,752 |
) |
|
(25,309 |
) |
Pre-opening expenses |
(24,112 |
) |
|
(71,575 |
) |
|
(75,271 |
) |
|
(12,000 |
) |
Total operating costs and expenses |
(1,439,516 |
) |
|
(2,036,537 |
) |
|
(1,808,726 |
) |
|
(288,353 |
) |
Other operating income (expense), net |
(1,145 |
) |
|
42,563 |
|
|
24,088 |
|
|
3,839 |
|
Income from operations |
173,401 |
|
|
231,168 |
|
|
306,586 |
|
|
48,876 |
|
Interest income |
18,332 |
|
|
40,713 |
|
|
34,193 |
|
|
5,451 |
|
Interest expense |
(2,358 |
) |
|
(34,295 |
) |
|
(51,457 |
) |
|
(8,203 |
) |
Other income (expense), net |
27,049 |
|
|
(12,939 |
) |
|
(8,836 |
) |
|
(1,409 |
) |
Unrealized gain (loss) from fair value changes of equity
securities |
- |
|
|
24,134 |
|
|
(136,680 |
) |
|
(21,790 |
) |
Foreign exchange gain (loss) |
(5,378 |
) |
|
(2,341 |
) |
|
30,012 |
|
|
4,785 |
|
Income before income taxes |
211,046 |
|
|
246,440 |
|
|
173,818 |
|
|
27,710 |
|
Income tax expense |
(53,858 |
) |
|
(17,747 |
) |
|
(44,465 |
) |
|
(7,088 |
) |
(Loss) from equity method investments |
(4,654 |
) |
|
(2,871 |
) |
|
(3,560 |
) |
|
(568 |
) |
Net income |
152,534 |
|
|
225,822 |
|
|
125,793 |
|
|
20,054 |
|
Less: net loss (income) attributable to noncontrolling
interest |
92 |
|
|
(116 |
) |
|
2,731 |
|
|
435 |
|
Net income attributable to China Lodging Group, Limited |
152,626 |
|
|
225,706 |
|
|
128,524 |
|
|
20,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
Unrealized securities holding gains, net of tax |
8,736 |
|
|
11,400 |
|
|
- |
|
|
- |
|
Reclassification of gains realized to net income, net of
tax |
(3,737 |
) |
|
- |
|
|
- |
|
|
- |
|
Foreign currency translation adjustments, net of tax |
1,113 |
|
|
58,502 |
|
|
125,174 |
|
|
19,956 |
|
Comprehensive income |
158,646 |
|
|
295,724 |
|
|
250,967 |
|
|
40,010 |
|
Comprehensive loss (income) attributable to noncontrolling
interest |
92 |
|
|
(116 |
) |
|
2,731 |
|
|
435 |
|
Comprehensive income attributable to China Lodging Group,
Limited |
158,738 |
|
|
295,608 |
|
|
253,698 |
|
|
40,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
0.55 |
|
|
0.81 |
|
|
0.46 |
|
|
0.07 |
|
Diluted |
0.53 |
|
|
0.77 |
|
|
0.44 |
|
|
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ADS: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
2.19 |
|
|
3.23 |
|
|
1.83 |
|
|
0.29 |
|
Diluted |
2.12 |
|
|
3.08 |
|
|
1.75 |
|
|
0.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computation: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
278,472 |
|
|
279,861 |
|
|
280,701 |
|
|
280,701 |
|
Diluted |
287,313 |
|
|
298,903 |
|
|
293,243 |
|
|
293,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China Lodging Group, Limited |
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
Quarter Ended |
|
March 31, 2017 |
|
December 31, 2017 |
|
March 31, 2018 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in thousands) |
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net
income |
152,534 |
|
|
225,822 |
|
|
125,793 |
|
|
20,054 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
15,799 |
|
|
19,245 |
|
|
17,129 |
|
|
2,731 |
|
Depreciation and amortization |
173,204 |
|
|
208,756 |
|
|
215,671 |
|
|
34,383 |
|
Amortization of issuance cost of convertible senior notes |
- |
|
|
2,598 |
|
|
7,958 |
|
|
1,269 |
|
Deferred
taxes |
4,470 |
|
|
(82,338 |
) |
|
2,672 |
|
|
426 |
|
Bad debt
expenses |
413 |
|
|
1,434 |
|
|
542 |
|
|
86 |
|
Deferred
rent |
14,837 |
|
|
103,688 |
|
|
23,882 |
|
|
3,807 |
|
Loss
(Gain) from disposal of property and equipment |
4,291 |
|
|
(2,795 |
) |
|
(460 |
) |
|
(73 |
) |
Impairment loss |
- |
|
|
92,480 |
|
|
- |
|
|
- |
|
Loss from
equity method investments |
4,654 |
|
|
2,871 |
|
|
3,560 |
|
|
568 |
|
Investment (income) loss |
(27,016 |
) |
|
(44,403 |
) |
|
137,126 |
|
|
21,861 |
|
Changes
in operating assets and liabilities, net of effect of
acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
6,174 |
|
|
10,735 |
|
|
(36,160 |
) |
|
(5,765 |
) |
Prepaid rent |
(34,897 |
) |
|
(131,592 |
) |
|
96,452 |
|
|
15,377 |
|
Inventories |
(1,748 |
) |
|
3,684 |
|
|
(3,210 |
) |
|
(512 |
) |
Amounts due from related parties |
2,835 |
|
|
(23,967 |
) |
|
(11,574 |
) |
|
(1,845 |
) |
Other current assets |
(7,134 |
) |
|
(56,720 |
) |
|
13,857 |
|
|
2,209 |
|
Other assets |
(21,002 |
) |
|
4,691 |
|
|
13,044 |
|
|
2,081 |
|
Accounts payable |
(39,822 |
) |
|
35,417 |
|
|
(11,315 |
) |
|
(1,804 |
) |
Amounts due to related parties |
(700 |
) |
|
4,234 |
|
|
(2,448 |
) |
|
(390 |
) |
Salary and welfare payables |
(104,752 |
) |
|
223,455 |
|
|
(183,447 |
) |
|
(29,246 |
) |
Deferred revenue |
(23,359 |
) |
|
23,014 |
|
|
58,644 |
|
|
9,349 |
|
Accrued expenses and other current liabilities |
105,092 |
|
|
(44,279 |
) |
|
51,030 |
|
|
8,135 |
|
Income tax payable |
(46,442 |
) |
|
(39,224 |
) |
|
(119,020 |
) |
|
(18,975 |
) |
Other long-term liabilities |
8,583 |
|
|
17,386 |
|
|
20,453 |
|
|
3,261 |
|
Net
cash provided by operating activities |
186,014 |
|
|
554,192 |
|
|
420,179 |
|
|
66,987 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Purchases
of property and equipment |
(185,116 |
) |
|
(267,332 |
) |
|
(370,977 |
) |
|
(59,142 |
) |
Purchases
of intangibles |
(826 |
) |
|
(4,079 |
) |
|
- |
|
|
- |
|
Amount
received as a result of government zoning |
- |
|
|
2,593 |
|
|
2,528 |
|
|
403 |
|
Acquisitions, net of cash received |
(765,023 |
) |
|
(330 |
) |
|
- |
|
|
- |
|
Proceeds
from disposal of subsidiary and branch, net of cash disposed |
- |
|
|
13,684 |
|
|
1,185 |
|
|
189 |
|
Purchases
of long-term investments |
(78,609 |
) |
|
(856,682 |
) |
|
(3,789,845 |
) |
|
(604,190 |
) |
Proceeds
from maturity/sale of long-term investments |
38,613 |
|
|
1,857 |
|
|
2,182 |
|
|
348 |
|
Payment
for shareholder loan to equity investees |
(75,980 |
) |
|
(6,079 |
) |
|
(6,240 |
) |
|
(995 |
) |
Payment
for the origination of loan receivables |
(3,400 |
) |
|
(319,500 |
) |
|
(132,170 |
) |
|
(21,071 |
) |
Proceeds
from collection of loan receivables |
5,812 |
|
|
20,303 |
|
|
270,026 |
|
|
43,048 |
|
Net
cash (used in) investing activities |
(1,064,529 |
) |
|
(1,415,565 |
) |
|
(4,023,311 |
) |
|
(641,410 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from issuance of ordinary shares upon exercise of
options |
2,190 |
|
|
1,875 |
|
|
47 |
|
|
7 |
|
Proceeds from short-term bank borrowings |
1,000 |
|
|
- |
|
|
220,000 |
|
|
35,073 |
|
Repayment of short-term bank borrowings |
(1,000 |
) |
|
- |
|
|
- |
|
|
- |
|
Proceeds from long-term bank borrowings |
- |
|
|
- |
|
|
3,450,652 |
|
|
550,115 |
|
Repayment of long-term bank borrowings |
- |
|
|
(1,650,916 |
) |
|
- |
|
|
- |
|
Funds advanced from noncontrolling interest holders |
22,739 |
|
|
34,972 |
|
|
- |
|
|
- |
|
Repayment of funds advanced from noncontrolling interest
holders |
- |
|
|
- |
|
|
(2,250 |
) |
|
(359 |
) |
Acquisition of noncontrolling interest |
(3,750 |
) |
|
- |
|
|
- |
|
|
- |
|
Proceeds from amounts due to related parties |
- |
|
|
- |
|
|
86,371 |
|
|
13,770 |
|
Contribution from noncontrolling interest holders |
310 |
|
|
17,743 |
|
|
4,070 |
|
|
649 |
|
Dividends paid to noncontrolling interest holders |
(650 |
) |
|
(240 |
) |
|
(1,422 |
) |
|
(227 |
) |
Dividends paid |
- |
|
|
(306,343 |
) |
|
- |
|
|
- |
|
Proceeds from issuance of convertible senior notes, net of issuance
cost and capped call option |
- |
|
|
2,925,202 |
|
|
- |
|
|
- |
|
Debt financing and administrative costs paid |
- |
|
|
(9,763 |
) |
|
- |
|
|
- |
|
Proceeds from ADS Lending |
- |
|
|
7 |
|
|
- |
|
|
- |
|
Net
cash provided by financing activities |
20,839 |
|
|
1,012,537 |
|
|
3,757,468 |
|
|
599,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cashequivalents |
(1,839 |
) |
|
(21,717 |
) |
|
(65,696 |
) |
|
(10,473 |
) |
Net
(decrease) increase in cash and cash equivalents, and restricted
cash |
(859,515 |
) |
|
129,447 |
|
|
88,640 |
|
|
14,132 |
|
Cash,
cash equivalents and restricted cash at the beginning of the
period |
3,235,507 |
|
|
3,826,620 |
|
|
3,956,067 |
|
|
630,690 |
|
Cash,
cash equivalents and restricted cash at the end of the period |
2,375,992 |
|
|
3,956,067 |
|
|
4,044,707 |
|
|
644,822 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China Lodging Group, Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended March 31, 2018 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
RMB |
|
|
|
|
RMB |
|
|
|
|
RMB |
|
|
|
|
(in thousands) |
Hotel
operating costs |
1,506,035 |
|
72.0 |
% |
|
5,038 |
|
0.2 |
% |
|
1,500,997 |
|
71.8 |
% |
Other
operating costs |
2,842 |
|
0.1 |
% |
|
- |
|
0.0 |
% |
|
2,842 |
|
0.1 |
% |
Selling and marketing expenses |
65,826 |
|
3.1 |
% |
|
1,120 |
|
0.1 |
% |
|
64,706 |
|
3.0 |
% |
General and administrative expenses |
158,752 |
|
7.6 |
% |
|
10,971 |
|
0.5 |
% |
|
147,781 |
|
7.1 |
% |
Pre-opening expenses |
75,271 |
|
3.6 |
% |
|
- |
|
0.0 |
% |
|
75,271 |
|
3.6 |
% |
Total
operating costs and expenses |
1,808,726 |
|
86.4 |
% |
|
17,129 |
|
0.8 |
% |
|
1,791,597 |
|
85.6 |
% |
Income from operations |
306,586 |
|
14.7 |
% |
|
17,129 |
|
0.8 |
% |
|
323,715 |
|
15.5 |
% |
|
|
|
. |
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2018 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
US$ |
|
|
|
|
US$ |
|
|
|
|
US$ |
|
|
|
|
(in thousands) |
Hotel
operating costs |
240,097 |
|
72.0 |
% |
|
804 |
|
0.2 |
% |
|
239,293 |
|
71.8 |
% |
Other
operating costs |
453 |
|
0.1 |
% |
|
- |
|
0.0 |
% |
|
453 |
|
0.1 |
% |
Selling and marketing expenses |
10,494 |
|
3.1 |
% |
|
179 |
|
0.1 |
% |
|
10,315 |
|
3.0 |
% |
General and administrative expenses |
25,309 |
|
7.6 |
% |
|
1,748 |
|
0.5 |
% |
|
23,561 |
|
7.1 |
% |
Pre-opening expenses |
12,000 |
|
3.6 |
% |
|
- |
|
0.0 |
% |
|
12,000 |
|
3.6 |
% |
Total
operating costs and expenses |
288,353 |
|
86.4 |
% |
|
2,731 |
|
0.8 |
% |
|
285,622 |
|
85.6 |
% |
Income from operations |
48,876 |
|
14.7 |
% |
|
2,731 |
|
0.8 |
% |
|
51,607 |
|
15.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2017 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
RMB |
|
|
|
|
RMB |
|
|
|
|
RMB |
|
|
|
|
(in thousands) |
Hotel
operating costs |
1,623,449 |
|
73.0 |
% |
|
6,091 |
|
0.3 |
% |
|
1,617,358 |
|
72.7 |
% |
Other
operating costs |
6,836 |
|
0.3 |
% |
|
- |
|
0.0 |
% |
|
6,836 |
|
0.3 |
% |
Selling and marketing expenses |
98,464 |
|
4.4 |
% |
|
551 |
|
0.0 |
% |
|
97,913 |
|
4.4 |
% |
General and administrative expenses |
236,213 |
|
10.6 |
% |
|
12,603 |
|
0.6 |
% |
|
223,610 |
|
10.0 |
% |
Pre-opening expenses |
71,575 |
|
3.2 |
% |
|
- |
|
0.0 |
% |
|
71,575 |
|
3.2 |
% |
Total
operating costs and expenses |
2,036,537 |
|
91.5 |
% |
|
19,245 |
|
0.9 |
% |
|
2,017,292 |
|
90.6 |
% |
Income from operations |
231,168 |
|
10.4 |
% |
|
19,245 |
|
0.9 |
% |
|
250,413 |
|
11.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2017 |
|
GAAP Result |
|
% of NetRevenues |
|
Share-basedCompensation |
|
% of NetRevenues |
|
Non-GAAPResult |
|
% of NetRevenues |
|
RMB |
|
|
|
|
RMB |
|
|
|
|
RMB |
|
|
|
|
(in thousands) |
Hotel
operating costs |
1,199,226 |
|
74.3 |
% |
|
4,672 |
|
0.3 |
% |
|
1,194,554 |
|
74.0 |
% |
Other
operating costs |
1,933 |
|
0.1 |
% |
|
- |
|
0.0 |
% |
|
1,933 |
|
0.1 |
% |
Selling and marketing expenses |
48,902 |
|
3.0 |
% |
|
287 |
|
0.0 |
% |
|
48,615 |
|
3.0 |
% |
General and administrative expenses |
165,343 |
|
10.2 |
% |
|
10,840 |
|
0.7 |
% |
|
154,503 |
|
9.5 |
% |
Pre-opening expenses |
24,112 |
|
1.5 |
% |
|
- |
|
0.0 |
% |
|
24,112 |
|
1.5 |
% |
Total
operating costs and expenses |
1,439,516 |
|
89.1 |
% |
|
15,799 |
|
1.0 |
% |
|
1,423,717 |
|
88.1 |
% |
Income from operations |
173,401 |
|
10.7 |
% |
|
15,799 |
|
1.0 |
% |
|
189,200 |
|
11.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China Lodging Group, Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended |
|
March 31, 2017 |
|
December 31, 2017 |
|
March 31, 2018 |
|
RMB |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
(in thousands, except per share and per ADS
data) |
Net
income attributable to China Lodging Group, Limited (GAAP) |
152,626 |
|
|
225,706 |
|
|
128,524 |
|
|
20,489 |
|
Share-based compensation expenses |
15,799 |
|
|
19,245 |
|
|
17,129 |
|
|
2,731 |
|
Unrealized loss (gain) from fair value changes of equity
securities |
- |
|
|
(24,134 |
) |
|
136,680 |
|
|
21,790 |
|
Adjusted net income attributable to China Lodging Group, Limited
(non-GAAP) |
168,425 |
|
|
220,817 |
|
|
282,333 |
|
|
45,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (GAAP) |
|
|
|
|
|
|
|
|
|
|
|
Basic |
0.55 |
|
|
0.81 |
|
|
0.46 |
|
|
0.07 |
|
Diluted |
0.53 |
|
|
0.77 |
|
|
0.44 |
|
|
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ADS (GAAP) |
|
|
|
|
|
|
|
|
|
|
|
Basic |
2.19 |
|
|
3.23 |
|
|
1.83 |
|
|
0.29 |
|
Diluted |
2.12 |
|
|
3.08 |
|
|
1.75 |
|
|
0.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per share (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
Basic |
0.60 |
|
|
0.79 |
|
|
1.01 |
|
|
0.16 |
|
Diluted |
0.59 |
|
|
0.74 |
|
|
0.96 |
|
|
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per ADS (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
Basic |
2.42 |
|
|
3.16 |
|
|
4.02 |
|
|
0.64 |
|
Diluted |
2.34 |
|
|
2.96 |
|
|
3.85 |
|
|
0.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computation |
|
|
|
|
|
|
|
|
|
|
|
Basic |
278,472 |
|
|
279,861 |
|
|
280,701 |
|
|
280,701 |
|
Diluted |
287,313 |
|
|
298,903 |
|
|
293,243 |
|
|
293,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
March 31, 2017 |
|
December 31, 2017 |
|
March 31, 2018 |
|
RMB |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
Net income attributable to China Lodging Group, Limited
(GAAP) |
152,626 |
|
|
225,706 |
|
|
128,524 |
|
|
20,489 |
|
Interest income |
(18,332 |
) |
|
(40,713 |
) |
|
(34,193 |
) |
|
(5,451 |
) |
Interest expense |
2,358 |
|
|
34,295 |
|
|
51,457 |
|
|
8,203 |
|
Income tax expense |
53,858 |
|
|
17,747 |
|
|
44,465 |
|
|
7,088 |
|
Depreciation and amortization |
173,204 |
|
|
208,756 |
|
|
215,671 |
|
|
34,383 |
|
EBITDA (non-GAAP) |
363,714 |
|
|
445,791 |
|
|
405,924 |
|
|
64,712 |
|
Share-based compensation |
15,799 |
|
|
19,245 |
|
|
17,129 |
|
|
2,731 |
|
Unrealized loss (gain) from fair value changes of equity
securities |
- |
|
|
(24,134 |
) |
|
136,680 |
|
|
21,790 |
|
Adjusted EBITDA (non-GAAP) |
379,513 |
|
|
440,902 |
|
|
559,733 |
|
|
89,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China Lodging Group,
Limited |
Operational Data |
|
|
|
As of |
|
March 31, |
December
31, |
March 31, |
|
2017 |
2017 |
2018 |
Total hotels in
operation: |
3,336 |
|
3,746 |
|
3,817 |
|
Leased
and owned hotels |
620 |
|
671 |
|
673 |
|
Manachised hotels |
2,535 |
|
2,874 |
|
2,943 |
|
Franchised hotels |
181 |
|
201 |
|
201 |
|
Total hotel rooms in
operation |
335,900 |
|
379,675 |
|
384,959 |
|
Leased
and owned hotels |
78,012 |
|
85,018 |
|
85,508 |
|
Manachised hotels |
241,251 |
|
275,065 |
|
280,133 |
|
Franchised hotels |
16,637 |
|
19,592 |
|
19,318 |
|
Number of cities |
369 |
|
378 |
|
382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended |
|
March 31, |
December 31, |
March 31, |
|
2017 |
2017 |
2018 |
Occupancy
rate (as a percentage) |
Leased
and owned hotels |
85.0 |
% |
87.2 |
% |
85.6 |
% |
Manachised hotels |
84.6 |
% |
86.6 |
% |
84.0 |
% |
Franchised hotels |
65.6 |
% |
72.1 |
% |
69.8 |
% |
Blended |
83.9 |
% |
86.0 |
% |
83.7 |
% |
Average
daily room rate (in RMB) |
Leased
and owned hotels |
204 |
|
251 |
|
243 |
|
Manachised hotels |
174 |
|
197 |
|
194 |
|
Franchised hotels |
180 |
|
232 |
|
228 |
|
Blended |
182 |
|
211 |
|
207 |
|
RevPAR (in RMB) |
|
|
Leased
and owned hotels |
174 |
|
219 |
|
208 |
|
Manachised hotels |
147 |
|
170 |
|
163 |
|
Franchised hotels |
118 |
|
167 |
|
159 |
|
Blended |
152 |
|
181 |
|
173 |
|
|
|
|
|
|
|
|
|
|
|
Same-hotel
Operational Data: like-for-like performance for leased, manachised
and franchised hotels opened for at least 18 months during the
current quarter |
|
|
|
|
As of and for the quarter ended |
|
|
March 31, |
|
|
2017 |
2018 |
|
Total |
2,813 |
|
2,813 |
|
|
Leased
and owned hotels |
571 |
|
571 |
|
|
Manachised hotels |
2,242 |
|
2,242 |
|
|
Occupancy rate (as a
percentage) |
85.9 |
% |
86.2 |
% |
|
Average daily room rate
(in RMB) |
181 |
|
192 |
|
|
RevPAR (in RMB) |
155 |
|
165 |
|
|
|
|
|
|
|
|
Hotel breakdown by segment |
|
|
|
|
|
Number of Hotels in Operation |
Number of Hotel Rooms in Operation |
|
As of March 31, 2018 |
As of March 31, 2018 |
Economy hotels |
2,864 |
262,885 |
HanTing
Hotel |
2,245 |
220,877 |
Leased
hotels |
440 |
50,637 |
Manachised hotels |
1,801 |
169,862 |
Franchised hotels |
4 |
378 |
Hi
Inn |
391 |
25,753 |
Leased
hotels |
30 |
2,837 |
Manachised hotels |
315 |
20,160 |
Franchised hotels |
46 |
2,756 |
Elan
Hotel |
220 |
15,414 |
Manachised hotels |
188 |
13,433 |
Franchised hotels |
32 |
1,981 |
Orange
Hotel |
8 |
841 |
Leased
hotels |
6 |
678 |
Manachised hotels |
1 |
85 |
Franchised hotels |
1 |
78 |
Midscale hotels and upscale
hotels |
953 |
122,074 |
JI
Hotel |
423 |
57,192 |
Leased
hotels |
91 |
16,078 |
Manachised hotels |
330 |
40,912 |
Franchised hotels |
2 |
202 |
Starway
Hotel |
173 |
16,550 |
Leased
hotels |
2 |
386 |
Manachised hotels |
141 |
13,415 |
Franchised hotels |
30 |
2,749 |
Joya
Hotel |
7 |
1,197 |
Leased
hotels |
4 |
589 |
Manachised hotels |
2 |
452 |
Franchised hotels |
1 |
156 |
Manxin
Hotels & Resorts |
15 |
1,473 |
Leased
hotels |
3 |
447 |
Manachised hotels |
9 |
922 |
Franchised hotels |
3 |
104 |
HanTing
Premium Hotel |
28 |
2,493 |
Leased
hotels |
11 |
1,068 |
Manachised hotels |
17 |
1,425 |
ibis
Hotel |
105 |
13,810 |
Leased
and owned hotels |
17 |
3,124 |
Manachised hotels |
44 |
4,914 |
Franchised hotels |
44 |
5,772 |
ibis
Styles Hotel |
16 |
2,238 |
Manachised hotels |
13 |
1,821 |
Franchised hotels |
3 |
417 |
Mercure
Hotel |
19 |
4,345 |
Leased
hotels |
2 |
496 |
Manachised hotels |
12 |
3,007 |
Franchised hotels |
5 |
842 |
Novotel
Hotel |
4 |
1,697 |
Manachised hotels |
3 |
1,374 |
Franchised hotels |
1 |
323 |
Grand
Mercure Hotel |
5 |
1,293 |
Leased
hotels |
1 |
360 |
Manachised hotels |
2 |
562 |
Franchised hotels |
2 |
371 |
Orange
Selected |
114 |
13,963 |
Leased
hotels |
46 |
5,990 |
Manachised hotels |
49 |
5,768 |
Franchised hotels |
19 |
2,205 |
Crystal
Orange |
44 |
5,823 |
Leased
hotels |
20 |
2,818 |
Manachised hotels |
16 |
2,021 |
Franchised hotels |
8 |
984 |
Total |
3,817 |
384,959 |
|
|
|
|
|
|
|
|
|
|
|
Same-hotel operational data by segment |
|
|
|
|
|
|
|
|
Number of hotels in operation |
Same-hotel RevPAR |
|
Same-hotel ADR |
|
Same-hotel Occupancy |
|
|
As of |
For the quarter ended |
|
For the quarter ended |
|
For the quarter ended |
|
|
March 31, |
March 31, |
yoychange |
March 31, |
yoychange |
March 31, |
yoychange |
|
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
|
2018 |
|
Economy hotels |
2,406 |
2,406 |
141 |
150 |
6.4 |
% |
160 |
170 |
6.1 |
% |
88.0 |
% |
88.2 |
% |
0.2 |
% |
Leased
and owned hotels |
477 |
477 |
147 |
160 |
8.7 |
% |
169 |
182 |
7.6 |
% |
87.3 |
% |
88.1 |
% |
0.9 |
% |
Manachised and franchised hotels |
1,929 |
1,929 |
139 |
147 |
5.6 |
% |
157 |
166 |
5.6 |
% |
88.3 |
% |
88.2 |
% |
0.0 |
% |
Midscale and upscale hotels |
407 |
407 |
215 |
229 |
6.5 |
% |
279 |
293 |
5.0 |
% |
76.9 |
% |
78.0 |
% |
1.0 |
% |
Leased
hotels |
94 |
94 |
264 |
281 |
6.3 |
% |
320 |
335 |
4.9 |
% |
82.6 |
% |
83.7 |
% |
1.1 |
% |
Manachised and franchised hotels |
313 |
313 |
193 |
205 |
6.4 |
% |
259 |
272 |
5.0 |
% |
74.4 |
% |
75.4 |
% |
1.0 |
% |
Total |
2,813 |
2,813 |
155 |
165 |
6.5 |
% |
181 |
192 |
6.1 |
% |
85.9 |
% |
86.2 |
% |
0.3 |
% |
|
|
|
|
|
|
|
|
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Contact InformationInvestor RelationsTel: +86 (21) 6195
9561Email: ir@huazhu.comhttp://ir.huazhu.com
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1 The conversion of Renminbi (“RMB”) into United States dollars
(“US$”) is based on the exchange rate of US$1.00=RMB6.2726 on March
30, 2018 as set forth in H.10 statistical release of the U.S.
Federal Reserve Board and available at
http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.
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