Huazhu Group Limited (HTHT) on Q1 2022 Results - Earnings Call Transcript

Operator: Good day and thank you for standing by. Welcome to Huazhu Group Limited First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. And now, I’d like to hand the conference over to Mr. Jason Chen, IR Director of Huazhu Group Limited. Thank you, please go ahead sir. Jason Chen: Thank you, Amber. Good morning and good evening everyone. Thanks for joining us today. Welcome to Huazhu Group's first quarter 2022 earnings conference call. Joining us today is our Founder and Chairman, Mr. Ji Qi; our CEO, Mr. Jin Hui; our President, Ms. Liu Xinxin; our CFO, Ms. Chen Hui; our Deputy CFO, Ms. Ye Fei; and our CEO of International Business, Ms. He Jihong. Following their prepared remarks, management will be available to answer your questions. Before we continue, please note that the discussion today will include forward-looking statements made under the Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. Huazhu Group does not undertake any obligations to update any forward-looking statements, except as required by the applicable laws. On the call today we will also mention adjusted financial measures during the discussion of our performance. Reconciliation of those measures to comparable GAAP information can be found in our earnings release that was distributed yesterday. As a reminder, this conference call is being recorded. The webcast of this conference call, as well as supplementary slide presentation is available on Huazhu Group's website at ir.huazhu.com. With that, now I will turn the call over to Mr. Qi Ji. Mr. Ji, please. I’m sorry. I think Mr. Ji’s line is having some connection technical issues. Please give us a few minutes. Please wait, sorry. Operator: Please go ahead Mr. Ji. Jason Chen: Hello? Okay we’re back. Operator: Can you hear us? Jason Chen: Yes, yes, we can hear you. Okay we’re going to disconnect from the main line and just use this number. Operator: Hello? Jason Chen: Is it Amber? Operator: Mr. Ji, you are alive, please go ahead. Ji Qi: Can you hear us? Operator: Yes we can. Ji Qi: Okay, we got disconnected. Operator: Please go ahead, your conference is live now, please continue. Ji Qi: Is that, but it’s not our, we are… Jin Hui: It’s not the right one. Ji Qi: No. Jason Chen: We can actually hear you Mr. Ji Qi, just start. Jin Hui: Hello? Operator: You are live now, please continue, thank you. Jin Hui: Is Jason, are you there? Jason Chen: Yes, I’m here. I can hear you clearly. Jin Hui: Okay, Jason, I’m going to put Mr. Qi back into the line now. Okay, we are going to stay on this. Hold on. Jason Chen: Okay, thank you. Jin Hui: Okay, Jason please go ahead. Ji Qi: Okay, good morning and good evening, everyone. And you may have noticed that Omicron variant has been spreading widely in China in the past two to three months. The pandemic came suddenly and lasted a very long period this time. Its development trend and the impacts are far over people's expectations. The pandemic outbreak and the tactical control once again brought huge challenges and difficulties to our China business of operations. And the other thing surviving in the face of the under the current situation the first thing we should consider is how to overcome the current difficulties on the premise of ensuring safety and health of our customers and the employees, as well as the meetings and the cooperation with the government requirement we initialized the cost optimization, rental waiving negotiation, and the marketing and sales strategic adjustment to overcome the period. More importantly, our franchisees are facing more difficulty and pressure due to the pandemic. As the franchisees are our important hotel partners, we needed to provide support to help them to go through the difficult period together. Obviously we are currently experiencing a long and cold winter. However, I always believe that every cold winter will bring a golden harvest. Over the past decade, Huazhu had faced many crisis that we became stronger after each crisis. In addition, every coin has two sides. Although the winter is cold it provides to us a good opportunity to review that what we have done and rethinking what we should do in the future. First, we need to build our long-term core competency by focusing the company’s limited resources to core strategies. Moreover, we should also take this opportunity to improve our internal skill through culture building, organizational upgrade, training of talent, customer experience in improvement, technology upgrades, and the product development. By doing so, we can be very well prepared, the warmer season after the current cold winter. Impacts and uncertainties from pandemic, war and the global macro factors are avoidable. We needed to insist on the face that we should insist on, and I believe they choose that we should believe in the long-term we will continuously center on customers, franchisees, and employees to implement our sustainable quality group strategy and build our capability to ride through the economical circle in the long run. With that, I will turn the call to Jin Hui to discuss our recent in detail. Jin Hui, please? Jin Hui: Jilin: Please turn to Page 3. Our RevPAR recovery was on track and in uptrend in January and February. However, it was seriously interrupted since March. The recovery declined to only 67% of 2019 level and further lowered to the bottom of 53% in April. May saw slightly better RevPAR recovery than April with the months to date RevPAR recovered to roughly 58% of 2019 level. The RevPAR number that I just mentioned only reflects our hotels in normal operations. If we included those hotels and the requisitions, our April and May RevPAR recovery would be roughly at 65% for both months, which indicates roughly 7 to 12 percentage points better than hotels in normal operations. Since May we are seeing the normal hotel is gradually improving in terms of the performance and the impacts of the requisition is gradually decreasing. Under the situation of the strict COVID prohibition control, we are implementing several mitigation measures to overcome the difficulties. Firstly, we have started our reinforcement of cost control for domestic operations. Please turn to Page 4. The cost control will be mainly from three specific aspects. First, streamlining headcounts and expenses. We are further optimizing our headquarter with a plan of headcounts reduction by roughly 15% to 20%. Second, we are concentrating the company's resources to our key strategies and reducing any unnecessary expenditures. Third, negotiating lease waivers or reductions due to the pandemic. We have formed a special team internally to conduct the lease waiver or reduction negotiation for both our leased and own hotels and manachised and franchised the hotel to reduce operational cost. As one of the leading companies in the industry, we are also undertaking the corporate social responsibilities during the pandemic by providing many requisition hotels. Please turn to Page 5. Since early March our number of hotels and the requisition increased massively from just over 200 to the highest of more than 1,800 hotels. Since the pandemic is gradually under control recently, our number of hotels and the requisitions started to decline from the peak in April. In fact, from another perspective, it is actually a win-win choice for us to provide hotels for requisition purpose during the pandemic period. Given the normal business and the leisure traveling demand declined sharply due to the traffic restriction during the pandemic period, the requisition actually helps hotels to achieve relatively better occupancy rate and support the hotel’s operational performance. Please turn to Page 6. Despite the pandemic impacts, we remain striving hard to grab any sales opportunities during the period to improve our performance. Firstly, we actively seek COVID related accommodation needs such as requisition hotels as I just mentioned before. We actively seek any accommodation needs of quarantine medical teams, delivery riders, governmental officers, and corporates for both leased and owned and manachised and franchised hotels. Taking Shanghai as an example, whereas the most affected cities by the pandemic this time, our hotels served over 9,500 medical staffs and over 5,000 delivery riders during the lockdown period. In addition, we also initiated several creative product packages to meet the special needs during the pandemic, such as online class hotel rooms, work from hotels and so on. Secondly, we adjusted our sales strategy from previously brand based to a new regional based to unify sales and marketing strategy. By doing so, we can be more precisely targeting strong local demands for specific regions, especially for those areas who have less impacts from the pandemic. Lastly, we extended expiration dates of our members' privileges and points and mentioned their member status to further improve our members' loyalty. At the same times, we are also actively cooperating with external traffic platform and participating in various marketing campaigns organized by different OTA platforms to capture the recovery opportunities post the COVID through pre-sales activities. The pandemic has the lockdown have resulted in a physical shutdown of our headquarter in Shanghai. However, we are still able to maintain high working and operational efficiency through remote work. Please turn to Page 7. H-Tone an internal information platform provides a solid foundation and a connector to our hotel staffs, headquarter employees, franchisees and suppliers for efficient remote work. For example, for our headquarter employees in Shanghai, there are over 10,000 online meetings were hosted. There are over 250,000 daily messages were sent and received and over 7,000 online documents were used per day on H-Tone platform. The pandemic and the lockdown demonstrated our digitalization capability. In the long run we think the strong technology capability and cloud-based information platform will be critical foundation for our future broader regional and international business collaboration and synergy. Please turn to Page 8. From cost control to requisition hotels, to marketing and sales efforts during the pandemic, and then to highly efficient remote work, these are all measures that we have taken in the current pandemic period. From a longer-term perspective, despite the market conditions remains are uncertain, we would continuously center on our customers, franchisees and employees to build capabilities, to ride through the ups and downs of economic cycles. Firstly is by caring our customers. Please turn to Page 9. I would like to share two letters of thanks from our customers recently. First letter is from our customers from Tangyin County. He is stating Huazhu’s hotels due to the quarantine needs. He feels that our hotel provides the warmth of home and would become our loyal customers in the future. The second letter is from our customers in Shanghai, who was drafted in Shanghai due to city lockdown. He has chosen Huazhu’s hotel to stay not only because that he is a loyal member, but also his high trust in Huazhu. In conclusion, we will continuously upgrade and improve our products and service qualities to meet our customers’ needs for better experiences and satisfaction. Secondly, by caring franchisees. Please turn to Page 10. Franchisees are our critical and reliable partners. Given the recent difficulties, we have provided a series of supportive measures and policies to help our franchisees to tide over the tough period. Last year, Huazhu was the only company which constantly providing fee waivers or reductions to franchisees. This year we again provided new fee waiver or deferral payment policies for hotels in medium and high risk areas and also for the new signed hotels. Moreover, we also assist our franchisees to obtain relevant information and take advantage on any government's preferential and assistance policies released during the pandemic. We help them to apply value-added tax refund or reduction, provided legal support to our franchisees on rental waiver negotiation, and helped the franchisees to apply financial support from external financial institutions. In addition, despite the strict traffic restrictions due to the pandemic outbreak, our supply chain teams still strived very hard to provide sufficient food and supplies to our manachised and franchised hotels to ensure their hotels in normal operations, as well as provided goods and supplies to hotels and the constructions in pipeline. Lastly, by caring employees. Please turn to Page 11. We always value our frontline staff as valuable assets for our company. Similar to what we had done in 2020, we returned our full frontline staffs during the pandemic period to keep our hotels in operation. At the same time, we constantly focus on our employees’ future career development. Even during the pandemic period, we had organized over 1000 online training programs for our employees to further helping them improving their skillsets. In addition, we also establish a special COVID fund to support or reward employees who are infected by COVID, who are working at requisition hotels and who have any outstanding contributions during the period. Please turn to Page 12. Despite the uncertainties, our long-term sustainable quality growth strategy remains unchanged. We still insist on further lower tier cities penetrations. Please tend to Page 13. By the end of the first quarter, lower tier cities contribution was still improving. It contributed 37% and 55% of hotels in operations and pipeline respectively. For the new signings in the first quarter, nearly half of them were attributed from lower tier cities. However, we have to be very honest to update you the most recent situation. Although our new signings still grow in the first quarter, the pandemic outbreak and lockdown seriously affected our new signings in April. The signing numbers in April declined significantly compared to last year. Hospitality business performance achieved a very robust recovery recently.: Please turn to Page 14. Our DH RevPAR recovery was constantly in uptrends from January to April with April RevPAR recovered to 80% of 2019 level and the recovery trend is further improving in May. Please turn to Page 15. Things to continue as easing of of traveling restriction in Germany and Europe. DH’s occupancy rate improved to 51% in April compared to only 30% in January. Leisure traveling was the main driver for the strong recovery in the first quarter. We expected business traveling will also gradually recover in the next couple of months as mainly driven by the resumption of meetings, conferences and exhibitions events. However given the recovery is still at early stage together with the current impacts of inflation in Europe, we would constantly implement our cost and revenue measures that we mentioned in previous few quarters. That mainly includes cost reduction, operational efficiency improvements, cash flow management and ADR recovery. In terms of the strategic focus post-COVID, we will mainly focus on cost reduction for sustained margin improvement, execution of digital strategy for process efficiency and analytics. Evaluating the growth potential of limited-service hotel segment and building up the H-reward global loyalty program. With that, I will turn the call to Ms. Ye Fei discuss our 2022 first quarter operational and financial performance. Ye Fei: Thank you, Jin Hui. Good morning or good evening to everyone wherever you are. Let's move on to our operational and financial review for the first quarter 2022. A shown on Slide 17, our hotel network expanded by 15% in the first quarter of 2022 to 765k rooms compared to 663k rooms in Q1 2021. Excluding DH, Legacy-Huazhu hotel network expanded by 16% year-on-year to roughly 740k rooms in which midscale hotels contribute most of the growth. For our hotel turnover in the first quarter of 2022, our total hotel revenue grew at 16% year-on-year to RMB 9.5 billion. This was mainly due to our continuous network expansion in China and strong business recovery of our European business. Legacy-Huazhu hotel turnover grew 11% year-on-year to RMB 8.8 million in the quarter and DH recorded a 70% of growth to the turnover of RMB 683 million. Turn to Page 18. Blended RevPAR of Legacy-Huazhu for Q1 declined 25% compared to 2019. The ADR in Q1 was up by 1.2% compared to 2019 level as RMB 224, mainly driven by the mixed change from midscale and upper midscale hotels, but the occupancy in Q1 is 21 percentage points lower compared to 2019 due to the impact of Omicron variant outbreaks in mid-March. Turn to Page 19. Legacy DH business is still impacted by Omicron variant in the beginning of this year. However due to the opening up in the Germany since mid-February it's RevPAR recovery was accelerating since then. Therefore DH-blended RevPAR for Q1 2022 grew 158% to €33 compared with Q1 2021. The occupancy improved by 19 percentage points compared with Q1 2021 and the ADR improved by 28% to €88. Please see our financial results on Slide 20. Total revenue grew by 15% year-over-year to RMB 2.7 billion in Q1 2022, mainly driven by 165% revenue growth of legacy DH in Q1 2022. Excluding DH, Legacy-Huazhu recorded a 4.6% year-over-year revenue growth to RMB 2.3 billion. Revenue was in line with our previous guidance. Leased and owned revenue of Legacy-Huazhu was flattish at RMB 1.3 billion caused by the large scale of Omicron variant outbreak since March. Net revenue from manachised and franchised hotels grew by 9% to RMB 974 million, mainly driven by the network growth of over 1100 manachised hotels. DH’s revenue growth is mainly driven by lease hotel recovery. Therefore overall the Group's manachised and franchised revenue contribution temporarily shrank to 37% in Q1 2022 compared with 38% in Q1 2021 at the Group level. However, for Legacy-Huazhu due to further expansion with SLI model, the manachised and franchised revenue contribution further expanded to 43% compared with 41% a year ago. Now let's move to the cost and profitability section on Slide 21. In Q1 2022 the reported operating loss was RMB 708 million compared to a loss of RMB 575 million last year and a positive RMB 39 million a quarter ago, mainly due to the weaker china business performance. Excluding DH, Legacy-Huazhu’s operating loss in Q1 2022 was RMB 416 million compared to RMB 172 million last year and positive income of RMB 60 million a quarter ago. The hotel operating costs for Q1 2022 was RMB 2.8 billion increased by 14% year-over-year. For Legacy-Huazhu it's recorded RMB 2.3 billion hotel operating costs indicating a 11.7% year-over-year growth. The increase was mainly attributable to higher rental cost of the newly opened leased hotels, higher personal cost as we keep growing hotel networks, and higher D&A, depreciation and amortization costs which were related to the upscale hotel opening and upgrading of existing hotels, as well as the consolidation impact of CitiGO acquisition. For Legacy DH it recorded RMB 558 million hotel operating costs indicating a 25% year-over-year growth. The increase was mainly due to the variable costs increase along with business recovery. Our reopening costs increased by 24% year-over-year to RMB 26 million in Q1 2022 from RMB 21 million last year. The absolute dollar amount of preopening costs remains low as our future expansion will mainly use SLIs model as mentioned in previous quarters as well. Our SG&A in Q1 2022 increased by 34% year-over-year to RMB 584 million driven by the increase in both Legacy-Huazhu and the Legacy DH. SG&A for Legacy-Huazhu increased by 29% to RMB 424 million, the increase was mainly attributable to the increase of headcounts for our BD team to support penetration into the lower tier city, operation team in Southern and Western China, sales team for corporate customer expansion, enhanced IT team, as well as the expansion of upscale hotel division. However, given the significant impact of recent Omicron outbreak, we have started implementing strict cost control measures by streamlining overheads like headcount and expenses. DH’s SG&A increased 48% compared with last year, driven by the OT commission increase alongside with business recovery and onetime restructuring costs of the organization. Turning to Page 22. Our adjusted EBITDA loss was RMB 333 million in Q1 2022 compared to a loss of RMB 133 a year ago. DH’s EBITDA loss narrowed in Q1 to RMB 240 million compared to a loss of RBB 340 million last year. Thanks to the reopening in Germany which accelerated business recovery. Excluding DH, Legacy-Huazhu recorded an adjusted EBITDA loss of RMB 93 million compared to a positive EBITDA of RMB 207 million in Q1 2021, due to the impact of the large scale Omicron outbreak and also the higher cost. In Q1 2022, we recorded adjusted net loss of RMB 662 million enlarged from a loss of RMB 451 million a year ago. Excluding DH, Legacy-Huazhu reported an adjusted net loss of RMB 339 million compared to a loss of RMB 150 million in Q1 2021. CitiGO: Turning to Page 25 on guidance, this March this highly infectious Omicron variant has been spreading rapidly in China which seriously affects our business performance now. Also the current COVID prevention policy has rendered business performance more unpredictable in the foreseeable future. Under such circumstances we will suspend providing or updating guidance in respect of any revenue and hotel openings until the situation sustainably improves. Nevertheless we will continue to provide quarterly guidance based on our best understanding of the most recent situation. In the second quarter of 2022 Huazhu Group expects revenue to decline 2% to 6% compared to the second quarter of 2021 or to decline 23% to 27% if excluding DH, mainly due to the large impact from Omicron outbreak in China. DH itself expects a three times revenue increase since its recovery is on a healthy track. Again above guidance only reflects our current view which is subject to further change. With that, let's open up for Q&A. Operator: Thank you. Our first question comes from the line of Billy Ng from Bank of America. Please go ahead. Billy Ng: Actually when we see from the presentation, we saw that there were about 700 new sign up year to date up till April which actually on track for almost like 2000 for this year's, so my question is have you seen very recently any slowdown from the new sign up and also if you can give some colors on the new opening as well? Like I remember in 1Q, you guys opened 300 hotels, just wonder have you seen slowdown on new opening in the last couple weeks or the last couple of months? Thanks. That's my first question. Jin Hui: Thanks for your questions. Yes, I think you're right. In the first quarter given we have been investing quite a lot of resources and expenses in terms of expanding our BD team last year. So we actually achieved relatively great new signings for the first quarter, but since the Omicron outbreak starting from the late March and this has very obvious impacted our new signings due to the pandemic, due to the strict traffic control, as well as the franchisees confidence level is declining as well. So definitely we are seeing some of the slowdown of the new signing recently. And in terms of the construction again, the pandemic has huge impact on the construction as well, especially on the transportation limits and the supply chain management due to the traffic control, and especially for the months of April and May, the construction process has been slowed significantly which is going to have some negative impact on our new openings for the year. Billy Ng: Thank you and then my second question. My second question is regarding to the streamlining costs and just wonder if you have a little bit more detail in terms of the numbers, and in the next few quarters what kind of run rates we can expect compared to the first quarter, if we're comparing the SG&A number or the hotel operating cost number? Jin Hui: Yes, so basically the pandemic definitely gave us a lot of challenges and difficulties, but we still insist on our China focus as well as long-term sustainable quality growth strategies unchanged. In terms of the cost savings, what I can share to you is that we are going to focus on our headquarter in terms of the streamline of the headcounts, so we are planning to reduce the headcounts by at least 20% and we will further -- to see if we need to reduce anymore according to the market conditions. But however, as I mentioned in my presentation, so the frontline and operational staffs are very valuable assets for us. So we will still return those frontline staff and operational staffs, our cost savings will be mainly focused on our headquarters. Thank you. Billy Ng: Thank you. Operator: All right, thank you. Next question comes from Lin Sijie from CICC. Please go ahead. Sijie Lin: So my first question is regarding the extension to Southern China, how's it progressing? Is there anything above or below expectations? Jin Hui: Yes, so as you may know that the Southern part of China, Huazhu was pretty weak previously. However this region is not only important for the entire China economic, but also it's very important market for Huazhu. Despite the impacts of the pandemic the Omicron outbreak since the March, so I'm very glad to tell you that, despite the new signings has been some negatively impacted by the Omicron, but our -- it is not yet achieved to our internal expectation. However, our new signings in the first quarter has already exceeded compared to our peers. So Huazhu is the one who has the largest new signings in Southern part of China in the first quarter. Sijie Lin: And so my second question is that, generally speaking, the reduced supply is a positive factor for the industry recovery. Meanwhile the sub macro and consumption environment may be an active factor. So how should we expect the coming industry recovery? Thank you. Jin Hui: Yes, I think as you may know that the business recovery in China is very much tied up with the policy. In terms of the pandemic provision, China is continuously using the dynamic zero COVID policy which is putting some of the uncertainties in the foreseeable futures. However, you know, despite the uncertain market conditions, we are still insisting on our own strategies which including our local sales capability to capture the local demand, as well as during the pandemic we have to capture some of unusual business traveling demand which including those corporates which needs the hotels for the resumption of production and the work. And also, as I just mentioned before, the cost of control as well as improved efficiency will remain key focus in the near future. Thank you. Sijie Lin: Thank you, management. Operator: Thank you. Our next question comes from the line of Dan Xu from Morgan Stanley. Please go ahead. Unidentified Analyst: Please allow me to translate my question. First, I would like to thank you very much the management for this opportunity to ask the question. It’s Dan from Morgan Stanley. My question is about the debt management, so can you share with us the current plan and progress for the US$475 million convertible bond expiring in November this year and the remaining of that €338 million credit facility expiring in December this year, what are the current plans and the progress please? Thank you very much. Ye Fei: Thank you for the question. Certainly we have various approach to solve these issues. Number one we have offshore cash on our balance sheet and second is we are preparing a new bank loan to repay the current upcoming due bank loan in the later half of this year. And also regarding the potential redemption of the CB, we also have a similar approach like bank loans and also other financial approach to solve the issues. Currently everything is look good. Unidentified Analyst: Thank you. Thank you very much. That's my only question. Thank you. Operator: Thank you. Our next question comes from Simon Cheung from Goldman Sachs. Please go ahead. Simon Cheung: So my first question is in relation to the new hotel sign up, the addition of the hotel complexion as well as the RevPAR recovery. I wanted to get a sense how is the cycle this time around different from the last several shut downs when there's also a viral resurgence, and if the management can provide us with some sort of guidance or expectations, how quickly recovery this time around going to be now that we have Shanghai gradually reopened as well? So that's my first question. Thank you. Jin Hui: Okay, thanks for your questions. I have to be very honest to you. So this round of Omicron outbreak has been after two years since the initial outbreak back to 2020. So it has been two years that franchisees are quite suffering as well as the potential investors of the hotel industry. So basically their confidence, their cash flow has significantly impacted over the last two to three years. As I mentioned in my prepared remarks, so we have been seeing the new signings that the market sentiment, the investors’ confidence level has been declining in April, although we are still striving very hard to penetrate into some of the regions which has less impacts from the outbreak, such as the middle part of China, Southern part of China. However, the overall confidence level or the market sentiment is relatively weak at this moment, as well as some of the negative impacts from the real estate industry, so we cannot deny those facts. In terms of the Shanghai, starting from tomorrow, everything should be gradually resumed to normal. I believe along with the supply chain transportation gradually resumed, the construction work should be gradually resumed as well, starting from next month. However, in terms of the new signings, I think it's going to take much longer, because it's not directly related to the pandemic, because it takes more time for rebut investors’ confidence level. So I think my best estimates for now I believe it's going to take around one quarter to resume to normal. Thank you. Simon Cheung: Oh, sorry, and so my second question related to DH, if I based on the company guidance for the second quarter, I figured out supposedly the DH guidance for reference you're going to grow at about three times on a year-on-year basis and that's RevPAR should exceed above $70 . And under these circumstances if achieved would you be able to achieve EBITDA positive in the second quarter over for DH? Thank you. Ye Fei: Yes, certainly. I think the DH is on the very healthy recovery trajectory quarter-by-quarter, I think we are budgeting like a growth line towards, probably towards the Q4 of 2020 we're targeting like a 90% recovery compared to 2019. So I think there's a chance for us from a year, the whole year perspective we think, there's a chance for us to go back to the EBITDA positive line, but certainly that's our target. Simon Cheung: So you think that not -- not only would you see EBITDA positive in the second quarter, there might actually be a possibility that you get to positive EBITDA for the full year, for DH? Ye Fei: Yes, well I'm just talking about the full year target, but for the Q2 it's still a recovery mode, so it might be a little bit early to say that. We will discuss more details once ready. Simon Cheung: Okay and this is -- thanks a lot. Operator: All right, thank you. Our next question comes from from CSC. Please go ahead. Unidentified Analyst: And my question is about our regional headquarters, especially like in Shenzhen and Chengdu, can you give us some colors on -- of this regional headquarters? Thank you. Jin Hui: Thanks for your questions. As you may know, that the hotel management is -- actually hotel business a very localized business along with our strategy with China focused we are trying to penetrate in every market in China, in not only the hotels but also the brands. So we want to be as close as possible to our targeted market, our customers and our franchisees, as well as the employees. So actually last week we have just established some new regional headquarters and in the remaining of this year, especially during the pandemic periods, we are adjusting -- we will be more using the regional based management mode and we are seeing that actually becomes more efficient especially during the pandemic period. Thank you. Unidentified Analyst: Operator: All right, thank you. We have reached the end of the question-and-answer session. I'll now turn the call back to the management team for closing remarks. Jason Chen: Thank you, everyone for taking your time with us today and we look forward to contact with you again in the upcoming quarter. Thank you. Bye-bye. Operator: Thank you. So this concludes our conference for today. Thank you for participating. You may all disconnect.
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Huazhu Group Limited (NASDAQ:HTHT) Sees Impressive Performance Amid Expansion Efforts

  • Huazhu Group Limited (NASDAQ:HTHT) has experienced a monthly gain of approximately 31.45%, showcasing strong market confidence.
  • The company's growth potential is highlighted by a projected stock price increase of 40.02%, driven by strategic expansions and technological advancements.
  • HTHT's financial health is robust, with a Piotroski Score of 8, indicating strong fundamentals and the ability to sustain growth.

Huazhu Group Limited (NASDAQ:HTHT) is a leading hotel management company in China, operating a wide range of hotel brands catering to different market segments. The company has a strong presence in the Chinese hospitality industry, with a portfolio that includes economy, midscale, and upscale hotels. Huazhu's strategic focus on expanding its brand portfolio and enhancing customer experience has positioned it as a key player in the market. Competitors in the industry include other major hotel chains like Marriott International and Hilton Worldwide.

Over the past month, HTHT has shown impressive performance with a monthly gain of approximately 31.45%. This upward trend highlights the market's confidence in Huazhu's growth strategy and its ability to capture market share. However, the stock has seen a slight pullback of about 8.88% in the last 10 days. This dip could be an opportunity for investors to enter the market at a lower price point, potentially benefiting from future gains.

HTHT's growth potential is significant, with a projected stock price increase of 40.02%. This potential is supported by the company's strategic initiatives, such as expanding its hotel network and leveraging technology to improve operational efficiency. These efforts are expected to drive substantial growth in the coming months, making HTHT an attractive option for investors seeking long-term gains.

The company's financial health is robust, as evidenced by its Piotroski Score of 8. This score indicates strong fundamentals, suggesting that HTHT is well-equipped to sustain its growth and manage any market challenges. A high Piotroski Score is a positive indicator for investors, as it reflects the company's ability to generate profits, manage debt, and maintain liquidity.

With a target price of $52.90, HTHT offers a promising upside from its current levels. This target is based on thorough analysis and reflects the stock's potential to reach new heights as it continues to execute its growth strategy. Investors looking for a stock with strong fundamentals and significant upside potential should consider HTHT as a valuable addition to their portfolios.