Q4 2020 Huazhu Group Ltd Earnings Call

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Ladies and gentlemen, thank you for standing by and welcome to watch your group leave it at 2024th quarter and for your earnings Conference call. At this time, all participants she'll bring the listen only mode. The will be of presentation, followed by a question and answer session at which time if you wish.

To ask the question you will need to press the Star N. One of your telephone most.

Advice you that this gun for instance, being recorded I would now like to hand, the conference over to your Speaker Mr. Jason Chen. Thank you. Please go ahead.

Thank you Rob good morning, and good evening, everyone. Thanks for joining US today, we'll come to auto group 2024th quarter and the full year of earnings conference call joining.

Joining us today is our founder and CEO, Mr. Chi Chi all of our President Mr. Jingly, All of Chief Digital Officer, Mr Dosing of XI and our CFO Mr. Chu in each one for.

Following their prepared remarks management will be available to answer your questions because the fault. We continue. Please note that the the discussion today will include forward looking statements made under the Safe Harbor provisions of the United States Private Securities Litigations Reform Act of 1995.

Forward looking statements involve inherent risks and uncertainties at the.

Such a result might be.

You are really different from the views expressed the today.

Number of potential risks and uncertainties outside the our public filings with the SEC <unk> group does not undertake any obligations to update any forward looking statements ex.

As for our cloud and actually the cable loss 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 night.

As a reminder, this conference call is being recorded the webcast of this conference call as well as supplementary slides of presentation is available on the <unk> group's website at IR dot sponsored without com with that now I will turn the call over to rest of the GG missed the GP.

Good morning, and good evening everyone.

Thanks for joining us today.

So the southern tentative for the challenging year COVID-19 pandemic.

John It affected both of our China.

On the European business.

However, however.

They are happy to see our Chinese China business to cover the Johnny So lots of the year.

Especially in the six in the heart of 2020.

Thanks to the Chinese governments effective prevention measures the car.

Operation from Chinese people volume.

<unk> reported.

Our hotel network and the pipeline continued expanding in 2020.

Thanks to our dedicated employees.

Our powerful brand volume and a solid the execution.

For our European business also use of still being impacted by COVID-19 per tenant.

Damian the.

Our utilization plan progress.

So we took the opportunity to make some organizational change and the price.

For future recovery.

Moving to slide two.

We believe the COVID-19 epidemic or not has not changed in the long term growth potential of China lodging.

Following China do circulation economic of developments.

The old model mentioned in the breadth of the sheet module has fit the three key strategic for our long term growth.

The first.

We've continued to the deemphasize, our China focused strategy.

The targeted to open 10 thousands of hotels.

In one zone entities of China too.

'twenty two.

Our features of the packaging.

Not only focus on speed of hours.

Hours of oncology.

Just the lack of we did before.

Secondly.

We continuously focus on innovation will build elephant along of the three and the one Super composites model.

Volume brand traffic on the technology.

We pushed for the full.

If utilization level for two of less of.

To provide the better service for customers the improved hotel efficiency and the to make more profits for our franchisees.

Last but not the least we.

We've seen upgrade of our organizational capability is a key.

Our hotel networks are keeping cruises, we're penetrating into low tier cities meantime, we are expanding.

Pending in Europe.

The orders of speeding up the developing.

Independent of upscale hotels.

All of these strategies strategic moves required organizational transformation on the diversify the talents.

With that I'll return the call to accumulate.

Our 2020.

In 2020, along the ship.

Good day.

The kinetics buckets. Please.

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The <unk> push out of them early on in yen Sandridge, Linden, though I think Paul Jean <unk> <unk> per year.

Thank you Gigi before we talk about the strategic focus of the 2020, one I would like to review our achievements in 2020, please turn to page five.

So the G for government in the core.

Sequence of the easing of the email, earning earning year on the xing kind of year to again slowdown.

The other each endo beds for the Georgia.

Top line the jewel against would've asked one of the early in June and the the downturn down but it was sort of Jackie.

The earning E&P that chance of the best suited uhm.

First of all the.

Accelerated quantity hotel expansion, although affected by the pandemic the for.

For us opening of our hotel in 2020 of steel each one zone and 649 and the pipeline has increased to two thirds of 449 from the 2220 62 by the end of June.

19.

It's early early in the in cash or non couldn't do the kwanza the yields are down the cortisol the.

The agenda ranking by <unk>, that's what I'm seeing that the challenge is where we will build dumping by the fiber on the Fujitsu.

From the beginning of 2020, we pay more attention to the quality of expansion, we redefined our non standard hotels and the use debt at the risk of our development of <unk>.

Standard brand for.

So of course, your Dania Linzess has been done for those synergies to solar hunting for deals.

Although the team treats the suites.

<unk> are the anything you see there.

Meantime, we have been upgrading our product.

We're being launching the new version of <unk> III, five Hi E. Six point now and the version two point out Crystal Orange and Orange.

She says the thoughts.

Towards the bottom for those two sort of the lease up.

Linda it's a minimum of two solar trends within the whole curve for.

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Details of that.

Our equivalent debt phase of the social area.

She is EMEA enrollments issue kind of.

Total of the assume that the cohort.

<unk> chips for our the equally in debt.

The Bob he's in the island.

Right.

We strengthened the direct sales capabilities through multiple channels.

As the host kind of level.

Launched the multi touch points to attract members.

Fly Fi team projection et cetera, and the <unk> equipped sales staff at the low coal sales level to push for the local sales.

And we keep developing new corporate customers the contribution of corporate members room nights.

The increase to 10% by 2020 from Knight from 8% by 2019.

So we've already proven in juices acquiring new hard to acquire.

On the.

The huge changeover G suite of Oklahoma.

The change from a book.

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Bulk goods.

For two of the Tms or.

Are the hunting the shallowness of suite.

The <unk> came in Hsinchu Pos was the why the attraction of women.

Lastly, if the.

Moving out of global of technology base to share service platform.

In China, we have been upgrading our infrastructure for example, the rollout of <unk> 2020, and meantime, we are working all of the digitalization of the DH.

So as of <unk>, So it's hard to onboard early high and yet through the year.

Group, reaching <unk> dollars.

I'd like to briefly introduce the first quarter.

Four months of 2021, please turn to page six.

So the low base Aha, the aging bogo tissue the Odyssey in the email <unk> satellites.

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Total reverse engineer channel Johnson city. So when we are going to adopt <unk> two of the accordions into the scene.

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Good thing hunting vouchering, what's the with Wuxi <unk> chief of budgets.

Here's the thing is is that all Oswald facility.

Of our intelligence some of you already equal income sheet, GMT and share their balance sheet by one day.

The trimming of opinions for really calls for balance of the RC.

Due to the impact of the second wave for the 19 separate provinces and cities like Shanghai and Beijing.

Our occupancy has been declining in January and also because of the stay local policy by the government for the spring holiday.

The occupancy in the.

The Chinese fast flow dropped too for the lowest point, but actually the rebounded pretty fast after the Chinese holiday driven by the strong travel demand the occupancy has been increasing fast, especially after the March 16th people can travel freely in the low risk low.

Through their health the Green card of the the Green code of.

There have cut so actually the travel limits has been has been removed the most of the buy.

March 13, the occupancy of plateau reached 17, nine only 7% lower than the same period of 2019.

The <unk> performance is actually 21 percentage higher than the national average.

She is on Zillow.

However, with which you can call it.

Total do believe for which usually helpful.

And where are the issue.

Apache for the early.

Early in June and one sheet of battling the cheeses.

The.

We should do.

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Pop group.

Are the <unk> back in the balance sheet.

On page seven.

It shows the recovery of our Revpar. Following the same trend of occupancy due to the COVID-19 patent January and February the <unk>.

Revpar is only 17% and 56% of the thing.

2019 number but but.

But in March 23rd the Revpar has returned to 87% of 2019 number.

As of the chimney recharge sheet of your wanted you to talk about GE zone caution glass email. She is one of the so called <unk>.

<unk>, which includes of the advantage of warrants that woman junior in the Rev share.

Equivalent to the army.

The junior and the bands the choice of Belgium, So Google sheets for year over year.

So from <unk> going into Asia.

If any of those sort of in a robot you shouldn't group with a range of the and the patterns that you've smoothed out.

Anticipating the upcoming holiday season for example tomb sweeping holiday on the label holiday and also the gradual roll out of COVID-19 vaccine, we anticipate that the.

The net revpar of 2021, its kind of reached the 90% to 95% of 2019.

We exclude the impact of January and February.

The Revpar of March to December, it's actually going out of rebound to the 95% to 100% of 2019.

So instead of if I assume the early on in the Chinese Olympian.

The early on in <unk>, Yes, <unk> gel.

And in the cortisol torch with our total through the social issues.

The change of <unk> Hi, This is set up on me.

All of her losing in zone linear with our debt and Suzanne good it's one of the accretion.

Oh Haynes NGL hug them at the end of quote up so you sort of.

The January changing our sales will it usable for the Navy.

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The strategic focus of 21 day, the same as the 2020.

We will continue to focus all of the rapid expansion of quantity of hotel network multi dimension direct sales and the global technology platform <unk>.

She CNI arent going to talk about execution of three strategic focus I'll start with rapid expansion of quality Hotel network Ashish will fall of makeup or the AI and the anti suite of them in jail.

I think the team.

Momentum through two three of hard to Willis zooming disease and immune to the team.

And the gene the quantity.

The third homes to the managers of the way to withheld in the.

So in Guangzhou, the Nintendo basins that we are part of the alumina.

From 2021.

We launched the new.

Standard to define the quality hotel from dimension.

Only the hotel set by the board I mentioned can be defined as of quality Hotel The Inc.

So as of yet.

The whole demand.

India show, you Cook away from gene to Cook, who the.

England to the <unk> kit sales.

Pin pad for coach.

In the funding and the other thing that goes in the electric.

First of all of our satisfied customer.

Quality Hotel should center on customer experience based on the rating of customer and of course.

Has the minimum standard for safety and the cleanup that's the bottom line and also the reach of search and standard in branded exposure at the also the.

Low team members repurchase and et cetera.

Assuming the angle the.

The England, the Mayhall TV Sugarman didn't show a bunch of the young fleet loans of LNG.

The England feel of the general the soldier.

England take both of them to the father of the piece of it.

Key volume on the when the new machine or parts of the food Cook Cook will adhere to the team for the season.

The second is happy of importance.

Quality hotel should pay attention to.

Worker welfare working experiences provide respect and dedication in the working environment provide them development and promotion of opportunity in the work incentify them and debt.

To help them too.

Provide a good service to the customers.

The sample that Tom was also the highest will yield the juice Jonathan.

Jonathan zones engine Sue them in some of the Codell, India towards when the additions of <unk> from <unk>.

Because of the euro partly with thoughts with you the finished.

On the <unk> conditions with little change.

The change in the.

Of the GOP quality team Booties income was on the in Leland.

Franchisees is the cornerstone of our business therefore of profitable franchise the third criteria.

By using the big data of what you we choose the right.

Right locations for the hotel and then make the right investment decisions and also we start to do the GOP management of single store to provide such service and enhance the franchise the.

Profitability.

Feasible versus the annuity of income from <unk> Sushi Chunghwa band in the <unk>.

We had some good hydro creates issues for us when the call to the Biogen.

The hartzell.

The issue the cognizant.

If their central reservation contribution from the members.

We're going to continue to recruit new members at a single store level and in large the size of the plateau loyalty program, which is also very important to the long term growth of market share.

Hi, Jeff I know a piece of it.

Sure.

Since the boot.

Moving to gene.

Total range, I think you're going to kind of essentially.

<unk> Sharpened Institute in Sudan.

Adding earning in the <unk>.

It has to do is in the early Armenia skidoo the vendor incentives.

Total pathological liar.

Sanctioned G judgment, so the pipeline of therapy.

During the day.

This is of the TPG group.

We have been penetrating into lower tier city steadily.

From the strength of the hotel breakdown the.

Hotel is located in the third year and below cities.

Contribute to 38 percentage of the fourth quarter of 2020 from the 36 percentage in the first quarter from the pipeline of the hotel the contribution of the hotels from third tier and the low Cds increased to 52% in the fourth.

Water from 45% in the first quarter.

<unk> channel.

On the other EPS.

So the gene charters on the <unk> zone woman.

The woman <unk> introduced from the third parts of the goods the chute zone.

Having said that while we are pushing to for them.

Penetrate into the military the absolute hotel the numbers in tier one tier two cities.

<unk> also increasing.

T see it similar to the entrance of the scratching Hall.

This is the junior and the Sarnia.

Some of the online thing Jordan together cheaper for goods.

Good.

The who does the pipeline entered into a full credit for in Sudan seasons of Jamba.

Well most of all of the answers on the contingent.

Simple.

The <unk> into the team.

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The churn down by the <unk>.

So each of them from credit by the sensor sales pipeline that you forget engaging with and this is art.

On page 11, we share the information of the cities, we covered by our hotels.

By March 22nd we covered 730 for screening.

And if we add pipeline hotels, the coverage increased to 932 cities.

And our standard the <unk>.

Target market of China is actually more than 2200, the white space is still fairly large the coverage of current focus hotel. Its current it is the only 33% including pipeline is the only 42 per cent.

It is not our zone with either of them, we don't say it's always.

For the <unk> share and climate.

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Under superior true integrated solution.

Consequentially yoghurts, the Agua <unk>, the CEO for fluids and yet the opinions of the th for Ya.

Sure.

On page two of them.

I'd like to introduce the new members of D H the.

Chairman of Supervisory Board and also of the new management team.

First of all Mr. Andrew way Chi is the chairman of Supervisory board of DH. He used to be the CEO of our core Germany and also the board member and he also he was also the previous CEO of th.

Marcos the severe attrition and the CEO.

<unk>. So you had several parts of the Uruguayan if Amit <unk> yet.

For the Shanghai.

Third on the <unk>.

Market is the new CEO of D H, who joined the company.

In November last year he has.

<unk> more than 24 years experience in travel industry served in Europe car Gulf Air and also Steinberg of hotel before.

Sure.

Sure Sharon said for her.

<unk> auto parts of it.

<unk> per share.

In Hong Kong.

Therefore seen yet the jewel.

Is the new CFO of <unk>, who joined the in last November.

Before that he worked as the CFO Hangzhou.

Subsidiary of Thomas Cook Air airline.

In the <unk>, saying it was kind of the entire dosing.

Total <unk>.

So onward with EBIT of Gene Hall.

Within the <unk> earnings net earnings, earning Union pipeline zone, Eugenia will reach out into the city.

Sanjay matched by Steinberg from more inside of <unk>.

As usual assortments and do the.

Because of these two damaging the SCE is one side the needed to day you don't lose.

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On page 13.

We had talked about the th brand development in China, which has been very steady by the end of 2020 and our pipeline. There are up five interest for the hotel and the three matched by stack them for the hotel.

As shown on page 13.

Our interest CD Hotel engine, Joe next to highway station, it's actually in the trial operation stage already and.

The other hotels out of interest of your hotels in Shanghai is already under construction.

Since the <unk> the Golar due the end of June.

The throughput.

So you are sort of.

<unk> see the thoughts.

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Danielle going through the hurdles.

The timing if you look at who holds the council.

For the ones of the Jones on the Plaza.

The book looking by the flooding the margin hunting paths spin Jim will give us the Williams chairman of the antibody called.

All of those with debt.

Also we also made a.

Very good.

Very very very big progression in the development of upscale hotel.

On March 22, we announced the formation of the JV between what you and Sue knack, which is one of the largest.

The real estate developer in China.

The joint venture will be focused on the development of stardom Burger and brought in house brand. The target is to sign up 200 upscale hotel in five years.

Thank you guys all of the bump here on the yields on loans Chandler civil the.

The civil about what the tons of ore would you please zone.

In the us from debt.

Adjusted within the CBL from against we don't yet other than change yet in paint Zyla QM, Amy the who needs from Jean Michel <unk> the case.

Well I would tell you couldn't do it all of the.

Low hydro in the leases.

On March 20, <unk> debt and we sign up the management contract of staggered Burger and the startup of the icon of Changsha of National Exhibition Center Hotel.

The total room counts are which are reaching 1000.

And also have the facility of one.

170000 square meter conference.

We will.

We think the cooperation of is just the start and we're going to foresee more and more of cooperation later on.

San Antonio <unk>, Zhu of digesting zoom, the social <unk> San Antonio UGG.

Now, let me turn to the microphone to shoot.

From the introduced our strategic focus.

And the technology.

Thank you.

Thanks <unk>.

The COVID-19 pandemic impact, we still expanded our membership base non roughly $150 million by the end of 2000 1910 year 170 million by the end of 2019, our strong direct the sales capability with also.

One of the critical factors to drive our strong ambassador banking that can currently during 2020 group.

In the fall like when would the for the I emphasize on beauty, even stronger multi Pat mentioned note that the sales.

The capabilities.

<unk> <unk> for FX.

<unk> installed sales Edgewood app cockpit of cut of across industry lines as shown on slide 15, I will discuss one by one.

For the youth dose at the left hand side of the slide displays our jive each for attracting new member in our hotels with many mom acquisition kind of.

The <unk> could scan the QR code, we provided to become our Thunder for using the various facilities so in and of functions. Our hotel such as zoom Kiwi projection longer is always kind of any one service and so.

However, only of check the new member of 19 App. We also need to return then and transfer them to be repeated cut him the.

Therefore, we for the empower our offline hotel by providing comprehensive technical tools and systems.

That CRM system, and online hotel efficiencies 10 for helping them to better understand customer needs.

Needs and the for the improved service quality by doing so we believe our.

Offline hotel, where not only have capacity to attract new members, but also to transfer them into low you cut and we of high repurchase rate.

Moving to our Edgewood App, we will launch our etch, whether the new <unk>, we kind of <unk> III at the App.

Coming few days comparing to the or the <unk>, the new app, the or provide miles more membership privileges more efficient facilities through in baby in the waiting for cushion functions such as the online checking and the more value added the surveys such as the more room.

Facilities come true and the newly added the function in the upcoming new App, we will be targeting to food the improve our user experience and the highest Hyatt <unk> Street.

Moving to next slide the comfort of custom development was also another area.

Well, we've put a lot of assets during 2020, well, we're happy to see a very good outcome, we achieved of during the last of year our penetration.

To the top 3000 public listed companies due to the tune of 13, 2% by the end of 2020 come of pad to only 10% to kind of 19 <unk> handset side of the slide are some of the customer we signed the recently.

Let me see the covering all kinds of the owned enterprise global companies and online cooperation we believe that cover the cash we are still play a very important in the June for our direct sales strategy, especially considering we have taken leave the delay.

Penetrating into the high end segment.

Although we have nearly 100 of 17 million members now with dosing.

This is still very small and our target is to sell abroad of population. Therefore of pop health of private flood of power mentioned as charities to encourage members organically. We are also attempting to across the industry in line with.

With the large traffic at the key tab.

The pharmacy when they may be to be two ex aligned strategy also with clients the false traffic debt it internally.

Moving to slide 20.

For the beach of B to B models, we are attempting to cooperate with this platform, which are often use the bi completion.

With the connect our reservation system with this platform and enable us the of corporate accustomed to easily book our hotels.

For the B to B to C model, we were deeply quickly the with those frankly used a large traffic consumer platform highly relevant to the hotel services.

Such as map airline beneath and car hailing E Commerce online way due to attract the new customers.

Moving to D edge.

As the COVID-19 pandemic of steel affecting our European business.

Our digital edition project still remains it remains of the progressing with the funnels of grid for the lack of 100 days.

We expect for the whole process to be completed by the middle of 2020 of web where I would like to fully utilize the fly to China.

<unk> of high option, the efficiency and the one with the technology capabilities to further optimize the DH operation for better efficiency and the profitability in the future.

That would be a very started the basis for next of development in European market.

In conclusion as mentioned the <unk> Elliot.

<unk> is one of the important of J P. <unk> also the Iris itself is the enhancer and tech knowledge is the ABTS and catalyst both the critical part of our three England Super component of it winning formula to support of flash of long term sustainable growth.

Where would the continually reinforce our direct sales efforts and further develop develop of our advanced the technology capabilities with that now our talent culture teal to discuss our Q4 and 2020 full year operational financial rebuilt.

Thank you for thinking.

Good morning, or good evening, everyone wherever you off net.

Let's move on to our operational and financial review for 2020.

As shown on slide three at the end of 2020, we had the total number of $6 of 189 hotels with 600 ramp of using 100 I think two of group in operations, an increase of 21% from the end of the engine.

Excluding the room inventory from <unk>, which was consolidated into watching from the.

The January 2nd 20 legacy Rumi <unk> would have been 628135 at the end of 2020, an increase of 18% from the end of 'twenty the idea.

Despite the prolonged lockdown due to the COVID-19 pandemic, we accelerated our hotel openings at the second half of 2020, however, due to the impact of COVID-19 impacting both our China Chinese and European business total not helping the world at the hotel level declined by 6% to the between.

Excluding the hedge total total would.

Reduced by 12% to 30 billion from a year ago.

Turn to page 24.

That cause the QUADRA blended revpar for Q4 2020 have recovered from the 97% level of 2019 level. The ADR in Q4 2020, you have almost recovered.

2019 level from 200 to the wondering be while the.

The occupancy in Q4 is one percentage point lower compared to 2019.

For the full year of 2020 due to the lockdown and travel restrictions.

All of the COVID-19 in China, particularly during the first half of 2020, our revpar declined by <unk> five percentage points.

The defense to 149, reminbi compared to last year.

This was attributable to a drop in ADR by 11% and the drop of our occupancy by 13 percentage points compared to last year.

Please turn to page 25.

Our legacy business has severely impacted by COVID-19 pandemic in Europe since March 2020.

Our European business recovered during the last summer.

It has been negatively impacted by the second and third waves of the pandemic since September 2020, many European countries imported markdown in order to contain the pandemic for example, the German government initially plan to import the lockdown for November to early December.

In the 2020, then extended to January into any day, one and then they do onto February and now through April 18th and the new one.

The German government also recently announced hot proud of restriction during the coming is the holiday in April these travel restrictions significantly impacted our revpar on the.

Patient five legacy do you hedge the blended Revpar for Q4 day 20 declined by more than 74% because the one euro impact in Q4 than I did.

The ADR dropped by 22% to 76 Euro and the occupancy dropped by 45 for five percentage points compared to Q4 day my team for.

For the full year in 2020, the blended revpar declined by more than 50% from 31, Europe attributed to lower ADR in the U S.

And significantly lower occupancy, we will provide an update on how the core with the extended COVID-19.

In Europe, Nathan in my presentations.

Please see our financial results on Slide 26, all of net revenue grew by 6% in Q4 declined by 9% of for the full year of 2020 of.

These revenue trends were better than our previous guidance breaking down the revenue growth in Q4, 2020 net revenues from our lease and operate the hotels improved by 5% year over year and net revenues from our managed and franchised hotels was also up by 7% year over year.

In Q4 2020.

S revenue mix of our business that the acquired in early 2020 had early and had higher weighting of lease and operate the hotels revenue revenue contributed by asset light.

The <unk> business model of product for debt at 3% in total revenues same as 2019.

Excluding the hedge revenue contributed by ex unlike many types of models improved by three percentage points of 35% in Q4 the <unk>.

The contribution from our <unk> business will continue to increase going forward.

Please turn to slide 27% due to the Covid 1919 impact in 2020, our revenue from mid and upscale hotels decreased by three the 10, two 6 billion accounting for 54 per cent of the total net revenue.

Excluding revenue from <unk> revenue from an obstacle for that would have been decreased by 28% to for $5 billion.

Let's now turn to slide eight on the operating income and margin the rip.

The loss from operations for Q4 of 2020, while the $134 million compared to a profit of $486 million last year the.

Loss from operation had already considered a noncash fixed asset impairment totally part of it and for 40.

For 2 million related to.

Our hotels two of hotels in the H B.

We plan to close upon the expiry of the leases as well as the.

Couple of hotels in China.

Excluding the impact of this fixed asset impairment the across or even better than breakeven, excluding the hedge which has continued to be affected by the second and third wave of COVID-19 since.

<unk> of September 2020, as well as the fixed assets impairment legacy quality recorded in income from operation of $315 million in Q4 2020.

The hotel operating cost and other costs for Q4 for anything it was $2 7 billion as mentioned above this amount included a noncash fixed asset impairment of $140 million.

Related to hotels that we plan to close <unk>.

Regarding the hedge at the hotel operating costs amounted to 2 billion compared to $1 9 billion in Q4.

Last year.

The hotel operating cost of our mainly attributed to higher <unk> cost depreciation and amortization cost consumables related to our leased the operate the hotels opened in Q3 and Q4 <unk> debt and also in China of $20 million to accept the impairment related to the hotels that could be closed in China.

As Julie mentioned during his presentation earlier.

The forward we would use.

I started like approach to speed up the development of our upscale hotel brands in China. In this connection we recorded a lower operating expenses in Q4 2020, and we expect this trend to continue going forward.

In Q4, we recorded in selling and general administrative expenses of $399 million, excluding the hedge our SG&A expenses were $388 million compared to $375 million in Q4 last year the.

Higher selling expenses in Q4 was mainly due to the several major promotional events, including but not limited to five sessions of the Guangzhou low conference held in Guangzhou, Shanghai, Chengdu, Beijing, and Shanghai in Q4, and also of stepping out of local area of direct sales team to boost our two beep business.

As <unk> mentioned in her presentation earlier.

The highest for the expenses was partially offset by a lower G&A ex of General administration expenses due to headcount reduction exercise in 2020 Q1.

Turning to slide 29, all of the operating income and margin for the full year for.

The reported loss from operations was $1 7 billion compared to a profit of $2 1 billion last year, excluding the hedge again, which has continually been effected by the second wave of COVID-19.

Legacy of module recorded a loss from operations of $100 million in Pennsylvania.

The hotel operating costs and other costs for the full year in 2020 was $9 8 billion excluding.

Excluding the hedge the hotel operating cost of module to seven 4 billion compared to $7 2 billion for 2019.

Hi, haul part of operating cost, mainly attributable higher lease cost depreciation amortization and consumables relate to our new lease and operate the hotels that has been opened in penetrating.

As mentioned in earlier patients, we will use our new approach to speed up development of our upscale hotel brands and therefore, we have record at the lower operating expenses in 2020 totaling $288 million compared to our current 2 million last year for.

We expect to record the lower operating expense costs going forward.

For the full year at the AT&T <unk>.

Other than the selling and general administrative expenses of $1 8 billion.

Excluding the hedge our selling and general administrative expenses was <unk> 1 billion compared to $1 3 billion last year the.

Lower SG&A cost were attributable to our aggressive cost cutting and call the restructuring taking place during Q1 2020.

Turning to page 30.

Our adjusted EBITDA decreased to $275 million.

In Q4, 2020 compared to 854 million last year. This amount had considered the fixed asset impairment of 140 million mentioned that I mentioned earlier.

That had been recorded in both the hedge and and tell the China business.

Excluding the Haitian alleging the QUADRA as of the EBITDA losses of 164 million, representing 11% decrease compared to last year due to the we suggest the pandemic in selected cities within China During November and December in day to day in.

In Q4, we reported an adjusted net loss of $8 million, excluding the H record adjusted net income of 200 million, representing 27% decrease in adjusted income.

Due to lower Revpar the.

The non-GAAP pro forma adjustment mentioned on this page included unrealized gain of losses from fair value changes of equity related while the investments such as our cautious.

Turning to page to the one for I guess, the EBITDA and net income for the full year after an hour.

Our adjusted EBITDA loss of <unk> hundred $44 million in 2020.

This amount had considered goodwill impairment of a cohort of $37 million in Q3, and fixed asset impairment overall 272 million, which gave a total of $700 million in 2020. Excluding these two non cash impairments our adjusted EBITDA would have been in the positive territory.

Excluding the hitch legacy of Quadro record positive adjusted EBITDA of one for 1 billion.

The chart on the right hand slide shows that the as I call. It just the.

Net income loss of $1 8 billion in 2020.

Excluding the H legacy of quality reported an adjusted loss of 159 million.

Coming to pay for the three on our COVID-19 update.

When we first reported to you on the impact of the COVID-19 back in June 2020 view of experiencing negative operating cash flow and significant cash shortfall. We also had significant overlap.

Hanging from the potential default of our $1 billion syndication loans due to a drop in EBITDA that fail to meet the financial covenants.

That will that will also of huge potential redemption rates from our quarters in the 5 billion USD convertible bonds due to our depressed share price debt fell below 30 U S. Dollar debt became a long way since last June as.

As mentioned by <unk> earlier, our China business has been recovering very strongly from the pandemic and so did our EBITDA and operating cash flow.

In addition, we raised $400 million U S dollar from a convertible bond issuance in may of 2020 before the rate of approximately $900 million from our secondary listing on the Hong Kong stock exchange with this cash we managed to reduce our net debt position from of close to $10 billion at the end of.

Our Q2.

Two 5 billion at the end of Q for Q4 and.

The overhanging risk of breaching the financial covenants in the $1 billion syndication loans had been fully resolved we had achieved the financial for those waiver condition that requires for the China business record the minimum of 1 billion adjusted EBITDA during the second half of 2020.

We recorded a $1 5 billion of just the EBITDA for our China business during that period.

The risk of comfortable about the redemption had also been results. Following the recovery of part of the share price there were almost zero redemption at the end of put debt back in early November of 'twenty 'twenty from now on this 475 million convertible bond will only be redeemed or converted into auto share at the end of the eight.

Do.

We are pleased to share debt both of our convertible bonds.

Well in the money therefore, the comfort of a long investors were more likely to convert the ahead into our two shares.

At the end of 2020, we had approximately 7 billion of cash on hand. In addition legacy of Quadro Unutilized bank facilities totaling $6 5 billion. This cash and bank facilities will allow for due to further pay down of <unk> bank debt in day, one and also to be used where the.

True any unforeseen circumstances.

Coming to the finish the impact of COVID-19 on thought hospitality on patient of default.

As mentioned in my earlier presentation, our European business and call for the second wave of COVID-19 pandemic. Both good July of all the important markdown, which had initially the planting at the beginning of December and now extended to April 18 data in one of the German government has also announced the stockpile during the Easter holiday.

<unk>.

This had the effect that our business in Europe.

<unk> for the business losses, the German government has extended the scope and the duration of government subsidies in.

In addition to the salary subsidies on short time work with debt, we had been receiving based on our estimates of the government subsidy to be received well will cover the shortfall in EBITDA due to the expansion of lockdown in 2021 we will only record the income upon the receipt of such cash.

Similar to our action in China, we hadn't had we have been negotiating with the landlords to reduce the rental payments.

It had been to be supportive. In addition, we have also put our staff on temporary furlough and frozen our hick pulse and reduced discretionary spending and capital expenditure.

We expect the maximum cash flow GAAP.

In the range of 40 to 50 million Euro for our German operations in the full year of data into one.

We are also in discussion with our local banks in Germany for banking for Paul They have been supportive.

Turning to page 32 on guidance compare to Q1 2020, we expect our net revenue per day 21, the grew by 10, 8%, 10% of 61% to 63% excluding dot for stability.

For the full year for <unk> 'twenty, one comparing to 2020, we expect of revenue grew by 50% to 54%.

To provide a more meaningful comparison by comparing with 2019, we expect our net revenue per day 21 to decline by 7% to 9% of declined by 12% to 40% excluding Deutsche hospitality for.

For the full year operating the one compared to 2019, we expect our revenues grew by 36% to 40% of 15% to 19% excluding the hedge.

As mentioned earlier Chinese government imposed the state local policy during the Chinese new year period, which had negatively impacted our business in the January and February they need and want.

Excluding the first two months into anything the one we expect our net revenue to grow to grow by 729% compared to Q1 <unk>.

123%, excluding the age.

For the last 10 months intended for the remaining last 10 months in 2021 the XP.

Our revenue to grow by 45% to 49%, although the six before the percent if excluding GH.

We said our gross hotel openings pocket of.

102020 day, one on the out of hand, we estimate our hotel closure at the range of 500 and 550.

With that please open the floor for Q&A.

Yes.

Thank you so much ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask the question you will need the press the star and one on your telephone and wait for your name to be announced if you wish to cancel the your request. Please press the hash key again, it's it start in one if you wish to ask the question.

Yeah.

And our first question comes from the line of Justin Kwok from Goldman Sachs. Justin Your line is now open.

Hi management, Thanks for taking my question and I'm.

Glad to hear about the strong recovery for the March two day since the more like the flow side that'd be the opening of the country.

Got to kind of top down question I wanted to check in the first one that's on the expansion plan that the other one that's all of the high end segment.

Segment, So one of the first one.

With.

I mentioned in the about the progress. It seems like you guys are very well on track to achieve our 10th of what's out of the south of cities in the 10000 hotels sometime in next year, So can I.

Check index too what do you think would be the next milestone for the company going beyond each of the next like free for five years in terms of number of cities in terms of the size of the portfolio and with that in mind, what would be the split of.

The segment and also the split of the cities by that and that's a check.

For one of the other question as well, which is one of the high inside of I'd.

I would love to see how your way of making progress with the transaction with <unk>.

Can you also share a bit.

On what Youre seeing on an aggregate of high end of expansion plan because you still have some of your own brands now like Georgia and also in the city, which is not a we don't know.

The I thought that true what are you seeing on the growth and the trajectory for these brands as well. Thank you.

Yeah.

Thank you.

The season, when he used the time no need of essential items.

Some of them.

Yeah.

Some of them.

The saga with pop.

The niches.

Then the debt go.

Go down too low.

Sure.

The deal in viewership with ICF for instance, in one day, and we're making the on LNG price.

And then went into China, which was good from Citi.

The adjusted.

Now without <unk>.

English for something for you kind of let's say changes she summed up little north of that.

So you'll meal for example include the Sandy.

Great.

The cumulative two of them.

Some of the calls us on the other.

Sure.

The you tube with us we use of them.

We found the <unk> cause on losses on its out of the English Hindi.

The adjustments as home and junk food the changing goods from the us.

The young <unk> Jones tissue.

The peso to the.

The Continental G. Those with the intent of taking China to pool, so with all of that.

The good work the.

Malibu and achieve on Hulu.

Yeah Selman.

Hi, Susan for you in 2000, and some of the changes you can cause them not to the end of June.

Okay.

So we foresee there are promising growth potential in all segments Justin.

Not just the upscale but also economy in the mid scale.

And we think as we penetrate into lower tier cities. The majority of the development will be focused on midscale and economy, and we will add more upscale hotel in the tier one tier two cities.

Target is reached.

Sorry.

The 10th 10000.

15000 hotels in the next five years and we believe the majority will continue to be a midscale and economy hotel.

She is of the autos is one of which is hedged for the further meetings the thoughts into the doorway to this end of the addition of the changes you can cause wound up the caution the.

Oh, the two doses on Basel III, the teaching true Jamie in the you would either the industry teaches she's going to the timing of $2 in the to you that would either of them.

So part of the targets of Asa.

Edmonds growth not only the economy mid scale, but also upscale in the resort hotels therefore.

I wanted to Echo chairman chief point to own the organizational capability we required.

All kinds of the organization.

Its formation and also the talent pools.

Yeah, the one T shirt.

He doesn't control the principles of the kind of hot downtown bulk of that number two in Chicago down of he mutual yes. The <unk>.

<unk> net.

Okay.

True.

The quarter hard to Blue pool of please on some of the <unk>.

Well my only pick all of the two doses on current the Cushing volatile for the future can do sort of your insurance called us at home of who you allow you to do the patch.

And do of Cushing part of the future the magazine titles to the that's how you can buy the product.

Yeah.

So in the upscale segment, we see more and more diversified demand from various customers. Therefore, we deploy a multi brand strategy in the upscale segment.

So the Perugia intercede Hugh zone.

We'll call him the chance to.

She pursues a chunk of the European that's having shut down for maintenance.

The true yet and so the tender.

The war.

The machines beyond the the tumor.

Around the group.

Rich.

Engage all the calls one of the finances of biologics.

You guys thought of it.

Okay.

For example, the inter city will follow the deployment of the high speed train network in China.

The let's say the transportation and Joy represents more about the confidence of the new style of Oriental culture, So insurance Dolby.

There will be of different kinds of hotels catering to different kinds of the customer need.

Okay.

Okay.

Next question please.

Yeah, all right. Thank you.

Hi.

Thank you so much once again, ladies and gentlemen, it's starting one if you wish to ask the question and our next question comes from the line of Julian <unk> from Bank of America. The Lee Your line is now open.

Thank you. Good morning, I also have two questions. My first question related to the revenue assumption.

The revenue guidance for 2021 can.

Can you tell us a little bit more in detail.

You guys mentioned about excluding January February are the.

From a growth assumption should be somewhere about like a rock my assumption is based on 95 for 100 per ton of 2019 level.

If we look at the.

Revenue growth.

<unk> of 50% to 54% low.

In 2021.

One of them.

Our assumption for the same store.

Low compared to 2019 for the China portfolio and also for the DH portfolio.

And that that's my first question.

Okay.

The city for the Chinese portfolio is that for the same hotel Revpar decrease of our Revpar assumption will be of in the range of 95 to.

100%.

The 100%, Okay, and then for the Deutsche Hospitality have actually revised downwards. So in fact that the I.

We can do especially the one but because this is the.

For the German operations because of the timing of the completion of the Lockdown is still very uncertain, but.

<unk> put in the appropriate range or the cargo to any potential shortfall.

Okay, I see and for the 90 parts of the hundred that's the same store number of things go wrong right.

Correct.

And also like the reason Oh.

Yeah.

You just mentioned the recovery was quite strong in March of <unk>.

That's the recovery is somewhat different from the last one meaning like the what's the.

Landmark of free tier for city and also in terms of the typically Shanghai recovery Oh.

Think that you'd notice that well for xiaomi.

Okay.

March I think our recovery has slowed.

The Minister has reached approximately like the seven.

7% already and this has already been considering the client the ramp up particularly in debt before the meat of before the long wait right. The other.

The party conferences of.

Before the end of the January of <unk>.

The end of March and subsequent debt there was a big rebound so constrained diabetes that medium for the March we estimate that the occupancy the bureau in the range of 87%.

I see and my second question is actually related to the cost side and then also I think I missed.

Most of them.

Correctly of the company has about 140 million write down.

If we take that out how should we think of both the full Q cost structure, because it seems like there's still some increase compared to 32 and if we think about 2021 cost structure.

Fourth quarter.

Great place to start end of just based on that too to kind of extrapolate for the 2021 number.

It's a it's a good place to start the audit of hand is debt that we will share more on some of the programs.

Because the <unk> 21 is that of not only in the full recovery in the recovery stage by the also in the accuracy of more in the expansion in both of our departments and also our sales efforts. So we wouldn't be the share more during the Q1 conference.

Okay. Okay.

Yes, sorry.

Alright.

And for the 140 million a right of what's the.

Between Deutsche Hospitality, and all the China portfolio.

The hunter of $40 million of debt is $120 million is related thoughts of stability related to two hotels and $20 million is related to the China business.

Okay. Thank you thanks a lot.

Thank you so much.

And your next question comes from the line of Sushi line from TICC. Your line is now open.

Thank you management I have two questions. The first is an upscale business. So for the T V with the neck, we target to sign of like 12 200 of hotels. The pipelines like you do how many could we expect to open this year and next year and.

And how should we evaluate the impact on the P&L.

And also could we see cooperation with other reactor of companies in the near future all of them.

We made our way to day of the cooperation within the next two achieved some progress in for that.

Oh. This is my first question. Thanks.

Yeah.

I'm kind of ducommun, yes, or no cause for that.

Yes.

So from the.

So the margin although in the evening.

And she did.

Hopefully.

We can do it is the sense of the order in the Sun country. Many of those the bulk of machines in field type of ourselves.

The genome true.

Well most of the rheumatology aging cheaper for you to do the go then to within the channel that went up.

Yeah.

The <unk> goes into the end of junior debt.

The only the gudrun from the.

The good Glenn this is hungry and more which would include losses.

Darling.

Okay.

Once the three she's not dependent so that's out of the food.

This was true.

Tell you the cheap price.

Both reaching the actually.

The two guys within the engine, that's which is the only built some of them.

On the Tel Aviv, Israel, James I'll tell you that you got several of them.

It goes without day two of the case of it.

Okay.

Our collaboration with the sooner is the first of breakthrough.

The upscale hotel segment.

Up to today, we plan there'll be 26 hotels sign up.

For this year and another 50 hotel to be signed up next year.

Because it's actually it's a good leverage.

Fast.

Fast faster.

Asset ownership in different kinds of hotels and also it's the network in the real estate.

We expect this channel now.

Now Tony work of the occurrence portfolio of loans from soon that there will also be more collaboration with other real estate of developers, but having said that is the estimation.

Opening of the luxury hotel upscale hotel is a little bit hard to ethane right now because it takes a longer time to sort of finish the construction and the ramp up so we'll provide more detailed and accurate estimation later on.

And the collaboration of sooner.

Soon after the departure of is just the first.

For our first the breakthrough and we expect it to have more similar kind of of our cooperation with the different kinds of the owners not just the real estate developer.

The government related.

And cities and also the financial institution et cetera, what provision of <unk> tunable product within the issue of father in the elite.

Amen.

So chi.

Oh sure the into its own for the five.

So chi Tung.

The new sense of doing some good <unk> idea of.

The <unk>.

She was with either the Cheetah Matterhorn.

She was onboard at Georgia, Virginia.

With the NK and <unk> and the partners pay us from SSE, Jeff share their maintenance of the send out in the case.

Free of parcel per room trying to U K of us.

Two of them.

Volume good credit it's functioning that by the end of the Liza.

Okay.

I wanted to provide some background data to all of you about the development of the upscale segment by looking at our peers like our Intercontinental Mary and the Houston It would be in China for a long time taken into account for example, that'd be entering to China more than 36 years. They have two of <unk>.

66 hotels in operation, meaning they opened seven hotels per year.

Upscale per year and the.

Marriott opened 11 upscale hotels per year.

So I think we.

We're going to accelerate our expansion in upscale hotel segment is the use of more innovative structure and approach.

Okay.

Thank you so much so my second question is that.

Debt in the longer future.

So when the market share of the top players in the hotel industry ROE of logs and the computation, becoming crazy Eaton would we see a day crazy branches fee will keep the phase out of your share.

So a big chunk of it each of that kind of blocked you should without your approaches as you get toward the end of the whole, which she has no. She talks a lot of sometimes do all of the whole T J.

The Chilean unless you should quickly TJ macdonalds either the good guys.

Download to each of you and she has demonstrated the the chartwell showed them the out of them well. Thank you so much per month.

<unk> the <unk> the Jos.

So the parcels the woodlands, we know it's the same way to either the chief of punching swung into the new hospitals and the needed Houston dosage. She thought of the way of calling you tons of.

Can do the charts.

You guys are of hardwood debt and good to hear from them for the chances.

The tenants one of the templates the shoot it to the rule with uncharted for the England.

The two.

So unless the something of a leader for cash and debt enrolment in the <unk>, whether it's the only cause Ohio kind of out of treaty.

And that's and the good.

You go you bought the books.

Guys with the rollout of <unk>.

So as of June foods, I'm glad that you could switch you said Gee do you go through it all of which year.

Kind of implemented the <unk> due to the says on the spending.

Which of the.

And the take rates of hope out. So you can for example of it.

Yeah.

So the ash actually we think the franchise he resembled the value of top player can provide for the industry.

<unk> has been.

Please make significant efforts of increasing our empowerment to the industry through the innovation in business model and also organization.

Power. Therefore, we think considering all the enhance the capability to provide value to the industry and considering the still low penetration of the top players in the market, especially in the upscale segment and also considering the further consolidation.

The <unk> available there we think there are still a very healthy.

The track for the take rate increase in the franchise business the G.

G T. The reach of the leaf.

The retail part of the lunar influence on the economy.

The condo she said the applied to the group, it's only on the team.

And of your query of your goods and zone.

Yeah.

Yes.

So for example, you know we look at the contribution of our Central Reservation system, we provide more and more bookings for our system compared to the outside channel, which is kind of generate from more feed to us.

Okay.

Yeah.

Okay. Thank.

Thank you.

Okay.

Thank you so much of it there are no further question at this time of speakers you may continue.

Thank you. Thank you everyone for taking your time with US today kind of we look forward to conduct the year with the gas.

This concludes the call today, Thank you bye bye.

Yes.

That is smoother conference for today, Thank you for participating in the.

[music].

[music].

[music].

Ladies and gentlemen, thank you for standing by and welcome to watch the group Levered at 2020 Ford quicker and for your earnings Conference call. At this time, all participants she'll bring the listen only mode. The will be of presentation, followed by a question and answer session at the way.

Each of them if you wish to ask the question you will need to press the star and one on your telephone.

Advisory debt discount for instance, being recorded I would now like to hand, the conference over to your speaker Mr. Jason Child. Thank you. Please go ahead.

Thank you Rob good morning, and good evening, everyone. Thanks for joining US today welcome to auto group 2024th quarter and the full year earnings conference call. Joining us today is our Thunder and the CEO Mr. Qi, Our president Mr. Jingly, all the Chief Digital Officer Mrs.

There was a machine and our CFO Mr. Chu in each one.

Following their prepared remarks management will be available to answer your question. The bolt. 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 Litigations Reform Act of 1995 forward looking statements of the.

Both inherent risks and uncertainties as such all the results might be materially different from the views expressed today.

The number of potential risks and uncertainties outside the our public filings with the FTC for auto group does not undertake any obligations to update any forward looking statement, except as required under applicable laws on the call. Today. We will also mention adjusted financial measures during the discussion of our performance.

Conciliation of those measures to comparable GAAP information can be found in our earnings release that was distributed yesterday night.

That's the reminder, this conference call is being recorded the webcast of this conference call as well as supplementary slides of presentation is available on the <unk> group's website at IR dot sponsored with Dot com with that now I will kind of all of our too.

Two of the GT Mr cheaply.

Good morning, and good evening everyone.

Thanks for joining us today.

So the southern tentative one of the challenging COVID-19.

The non human synthetic Johnny has affected both of our China.

On the European business.

However, the.

The real happy to see our Chinese China business recovered as Johnny throughout for the year.

As mentioned at the end of the stick in the heart of 2020.

Thanks to the Chinese government's effective prevention measures the corporation from Chinese people.

More importantly.

Our hotel networks on the pipeline continued expanding in 2020.

Thanks to our dedicated employees.

Out of Palm for brand volume and a solid the execution.

For all of our European business hours of use is still being impacted by COVID-19 pandemic.

And.

And keep our utilization plan in progress.

So we took the opportunity to make some organizational change and for them.

Yeah for future recovery.

Moving to slide two.

We believe the COVID-19 epidemic or not has not changed in the long term growth potential of China margin.

Following the China do circle AG economic of developments.

The all of them model mentioned, the five president of heat module helps at the three key strategic for our long term growth.

The first.

The continued to the emphasize our China focused strategies.

The targeted to open 10 thousands of hotels.

In one zone entities of China by 2022.

Our feature of the packaging.

Not only focus on speed at all.

Oncology just the law.

Lack of we did before.

Secondly.

With continuous focus on innovation.

We build our business around the the three in the one Super Compositor model combining brand.

Perfect technology.

We pushed for the full utilization.

The utilization of until lots of.

To provide the better service from our customers the improved hotel efficiency and of to make more profits for all of our franchisees.

Last but not the least we.

We think upgrading our organizational capability is a key.

Our hotel networks are keeping closing we're penetrating into low tier cities meantime, we are expanding in Europe.

We are all of ours of speeding up the developing the.

Development of upscale hotels.

All of these strategies strategic moves the quiet organizational transformation on the diversifying the talents.

With that our turn the call total weight to discuss our 2020 strategic reviews.

In 2021 set of strategic.

Lucas please.

So the GTA.

The central Atlanta, earning the incentives of channel Omni channel a push out of in the early on in Yeah, Sandy it's only in the Washington, Paul Cheng <unk>.

Thank you Gigi before we talk about the strategic focus of the 2020, one I would like to review our achievements in 2020, please turn to page five so.

So the G maintain the closeout sequence of the easing of the email.

<unk> seen.

<unk> seen kind of year to day in Sudan.

On the other each and debate for the Georgia.

Top line the jewel against would've asked one of the earnings each on the NV the downturn down but it was out of Jackie for her.

Adding earning the NPD that idea of chance of the bank so the Georgia.

First of all is the accelerated quantity hotel expansion.

The affected by the pandemic the Grand opening of our hotel in 2020 as deal each one zone and 649 and the pipeline has increased to 2000 of 449 from the 2220 62 by the end of <unk>.

2019.

It's early early in the in cash or non couldn't do the Guangzhou diodes, the down the core zone.

The agenda around <unk>, that's what I'm seeing that the challenge is sort of a woman build dumping by far the fujitsu.

From the beginning of 2020, we pay more attention to the quality of expansion, we redefined our nonstandard hotels and the use this as the right one of our development of extended brand.

Francis I of course, Janine, yes, Linzess I'm in the.

For the synergies total of hunting Sunday.

Although the team.

The strategic or the name the initiative for <unk>.

Meantime, we have been upgrading our products were being launching the new version of <unk> III <unk>, Hi, E. Six Plano and the version two point out of Crystal Orange and Orange.

She says the.

Towards the bottom so to speak out of the lease up.

The amendments of men and women to us for lunch and through the end of the whole curve.

What are you <unk>.

But these are the EMEA.

And the pace with the social area third she is EMEA performance issue kind of a total of the assumed the chief of cohort three year cohort of the G&A corn chips on each of them and the.

He is in the early early in their bags of Stifel.

We've strengthened the direct sales capabilities throughout the channels.

The hotel level.

<unk> launched the multi touch point to attract members such as Wi Fi.

<unk> projection et cetera, and the really equipped sales staff at the low code sales level to push for the local sales.

And we keep developing yield cooperating customers the contribution of corporate members room nights.

The increased to 10% by 2020 from Knight from 8% by 2019.

So the Hawaii proven just requiring new hard to acquire the.

George on the see the.

The huge its age range whole G suite of content and compare the change from them.

Both of them <unk>, who the cheese, which in zone four.

I'll call. It a total of two P. M is the are the hunting the English channel Mississippi.

<unk> came in Hsinchu posture of the why the change income from them.

Lastly, the.

The building out of global of technology base to share service platform.

In China, we have been upgrading our infrastructure for example, the rollout of <unk> 2020, and meantime, we are working on the digitalization of the G. H.

So as of <unk>, So it's hard to tune the water, earning on EMEA and the key to the EG group, which includes <unk> and low.

To briefly introduced.

Third quarter.

The performance of 2021, please turn to page six.

So the low base on the aging toga the issue. The other thing is in the email from <unk>.

In cash or in Guadalajara jewel of equal in the heart of total reported cengage ounce chunks of treaty that will meet the button of adult Youll you toward the accordions into the existing 10 year Ho from <unk> for the $3 range.

Tayo the as usual for U T. Soon so we'll do the Samson chooses sylvan shipped to the OS uses <unk> Trimble of deepening and EG creeping gear thing hunting vouchering, what's the old homes, Inc.

One of <unk> G budgets.

Here's the thing is for that whole Oswald facility the other.

Of our intelligence some of the already equal income sheet, Tianjin Shanghai of balance sheet of about one day.

The chairman of oil opinions of the cultural diversity of IC.

Due to the impact of the second wave for the 19 separate provinces and cities like Shanghai and Beijing.

Our occupancy has been declining in January and also because of the sale of local policy by the government for the spring holiday.

The occupancy in the Chinese fast flow of drop to the for the lowest point, but actually the rebounded pretty fast after the Chinese holiday driven by the strong travel the demand the occupancy has been increasing fast, especially after the March 16th people can travel freely in the law.

Low risk zone.

Through their health the Green card of the the Green code of.

There have cut so actually the travel limits has been has been removed the most of the buy.

March 13th the occupancy of plateau reached the 79, only 7% lower than the same period of 2019.

The <unk> performance is actually 21 percentage higher than the national average.

The key is on Zillow home loans.

How the group, which you can call you total do playful which uses households.

Oh, yes.

The issue of.

Jim Please for the Audi E Junior in total Sheila Patten the chooses.

And as we used to do.

So it is with all of our society the pop group from Arlington, Julien Gong XI the effect in the balance sheet.

On page seven.

It shows the recovery of our Revpar following in the same trend of occupancy due to the COVID-19 patent January and February the <unk>.

Revpar is only 17% and 56% of the sale of <unk>.

2019 number but.

But in March 23rd the Revpar has returned to the 87% of 2019 number.

The chimney recharge free to your warranty the dog GE zone caution glass emerges from this will turbo.

Which includes the total it she wants that woman <unk> channel.

<unk> equivalent to the junior and their balances at June <unk> Zoom, Google of T true yes.

So from call each of the cornea and the inkjet.

And you're saying it ourselves of the robot <unk> group with a range of in the balances you'll soon stop at Lipa.

Anticipating the upcoming holiday season for example tomb sweeping holiday in the label holiday and also the gradual roll out of COVID-19 vaccine, we anticipate that the net.

Revpar of 2021, its kind of reached the 90% to 95% of 2019, if we exclude the impact of January and February.

The Revpar of March to December, it's actually come out of rebound to the 95% to 100% of 2019.

So instead of if I assume the island.

In the San Antonio.

So the China, RTL and <unk>, yes.

Our email on the John <unk>, John Berger Lyndon the quota thoughts with our total to the total.

The change of <unk> Hi, This is Sam min for her.

Low hanging down from there with idea of had to send the attendees on the provision.

Will hinge hinge all of them at the end of quote up T J.

<unk> is our sales will that's usable for nano.

Sure.

The strategic focus of trying to help clients stay the same as the 2020.

We will continue to focus all of the rapid expansion of quality Hotel network multi dimension direct sales and the global technology platform <unk>.

<unk> and I are going to talk about the execution of its free strategic focus I'll start with rapid expansion of the quality Hotel network and changing we will follow later on AI and the anti settlement rather.

You can assume that the most.

<unk> two of three of <unk>, but will add some of the G&A climbing.

The.

So the total supervisors of the way to the touch in the.

Qiang Gong Zhang millions in the basins that we are part of the alumina.

From 2021.

We launch it.

Standard to define the quality hotel from dimension.

Only in the hotel and satisfy the four dimensions can be defined as the flex Hotel the Inc.

So again the cook.

The Maggie because of the India show Youku to machine.

The clear who the peers.

And then to the <unk> therapy.

From Cowen <unk> lymphoma, and other things of that goes in the electric.

First of all of our satisfied customer.

Quality Hotel should center on customer experience based of the rating of customers and of course.

Has the minimum standard for safety and cleaning it that's the bottom line and also reach of certain standard.

Branded exposure at the also the.

Loyalty members repurchase and ex cetera.

Yeah, I assume in the U S.

The England EMEA hull two of them.

And then share a bunch of the young fleet loans of LNG to the England feel of the Xinjiang the soldier.

The board of onto your father of PS.

She will even when the when the launching tomorrow of pods will the flow hub Cook will adhere to the team for the season.

The secondly, happy of importantly, the quality of hotel should pay attention to.

Worker welfare 14 experiences provide respect and delegation in the working environment provide them development and promotion of opportunity in the work incentify them and that too.

To help them to.

Provide a good service to the customers.

Dissemble the jumbos answer of Boswell yield at Houston, non jumbo loans engine Assortments of <unk>, India to its only of the chance to go to the from a price of EUR 2000 beautiful machine.

All of <unk> conditions with little change.

Changing the the.

The GOP quality, Jean Booties income was on the England.

Franchisees is the cornerstone of our business therefore of profitable franchisees of third criteria.

By using the big data of plots you we choose the right.

Writes locations for hotel and then make the right investment decision and also we start to do the GOP management of single store to provide such service and enhance the franchise profitability.

Profitability.

Feasible versus the daughter of income for Magellan Sushi Chunghwa band in the <unk>.

We had some good auto credit issues when it goes to the full year.

Biogen hartzell without tissue the Gordon zone.

Florida is there.

For the reservation contribution from the members, we're going to continue to recruit new members at a single store level and in large the size of the flatter loyalty program, which is also very important to the long term growth of <unk>.

And the adjustment this year.

Sure. This is on the side of it since <unk>.

Total non <unk>.

Sanjay Angie shots of Institute in Sudan, early earning in the <unk> sensitive teeth in the early <unk> incentive.

So on type of land vehicle like kind of.

Sanctioned GE judgment through the pipeline.

Arlene Arena, if you do the balances all season, the TPG to the revenues.

We have been penetrating into lower tier city steadily.

From the strength of the hotel breakdown the Ho.

Talents located in the third year and below cities contribute to 38 percentage of.

The fourth quarter of 2020 from the 36 percentage in the first quarter.

From the pipeline of the hotel the contribution of per account from third tier and the low Cds increased to 52% in the fourth quarter from 45% in the first quarter.

Per Vishal challenge for the idiots.

<unk>. This is on the <unk> woman.

<unk> introduced from the parts of the goods tissue the bottoms up.

Yeah.

Having said that while we are pushing to.

Penetrate interest now appears to be the absolute hotel the numbers in tier one tier two cities actually also increasing.

The C at Zillow of into the in terms of the progression from here.

This is the junior and the.

Some of the or maintain Jordan for gorilla shipper of sense.

Good sense.

<unk> entered into a full candidates through the seasons as Jamba SSO group.

While most of the answers on the collegiate either Susan.

<unk> instead of the team <unk> Julio <unk>.

The way.

The downturn down by group.

Our total within from credit by the sensor charter of pipeline that you have the <unk> way.

On page 11, we share the information of the cities, we covered by our hotels.

The March 22nd we covered 730 40 cities and the if we add pipeline of hotels the coverage increased to 932 cities.

Notwithstanding the <unk>.

Oregon market of China is actually more than 2200, the white space is still fairly large the coverage of current facts of hotel. Its current is the only 33% including pipeline is only 42%.

Does that Iowa, Zhang with other loans <unk> ph.

The change the way through <unk> share in climate in 210 <unk>.

Under the true change liquids content.

<unk> the <unk> the CEO for fluids hanger opinions at the edge of the field.

On page two of them.

Like to introduce the new members of D. H the chair.

Chairman of Supervisory Board and also the new management team.

First of all Mr underway Chi is the chairman and for.

Advisory Board of DH, he used to be the CEO of a core of Germany and also the board member and he also he was also the previous CEO of GH.

Marcos <unk> and the CEO.

<unk> total parts of the of one if I'm into ours the <unk> yet.

Cost of <unk>.

The the ocean.

Diana <unk>.

Market is the new CEO of GH, who joined the company.

In November of last year he has.

Accumulated more than 24 years experience in travel industry served in Europe car Gulf Air and also stagnant Brooklyn Hotel did for them.

Europe.

<unk> CFO.

<unk> auto parts of the edge.

<unk> share.

In Hong Kong.

Therefore seen yet the joke.

And it's the new CFO of <unk>, who joined the in last November.

Before that you work as the CFO of condo.

Subsidiary of Thomas Cook are airlines.

The <unk> the society was that of the entire doesn't want the India shifting pad onboard with EBIT of Chunghwa.

The element of <unk> <unk>.

The early on year, earning earning union pipeline zone, EG of which App Intercity Sanjay.

Sanjay matched by Steinberg of stay tuned.

Since the <unk> Who's also the woman and though the because of the issue of damaging the senior zone size of <unk> shoot in June okay.

On page 13.

We talk about the th brand development in China, which has been very steady.

The end of 2020, and our pipeline are up 5% interest for the hotel and the three matched by stagnant for the hotel.

As shown on page 13.

Interest City Hotel Inkjet and Joe next to highway patients, it's actually in the trial operation stage already and the other hotels on the interest of the hotels in Shanghai the already under construction.

So we'll see you at home in the Colorado day, and using the tool.

Thank you.

<unk> thousand shame index.

The <unk> hurdle.

EMEA volume little far too hoods the consoles.

First of all of the Jones from the impact the the book looking by the hiding the margin hunting cash spin GM will give us the wounds the net change in dental manager called agile debt.

Also we also meda.

Very good.

Progress very very very big progression in the development of the upscale hotel on March 22, we announced the formation of the JV between <unk> and its true Nag, which is one of the largest.

The real estate developer in China the.

The joint venture will be focused on the development of Steinberger and brought in house brands the true.

Our debt is to sign up 200 upscale hotel in five years.

<unk> heard about here on the yields on loans humorless civil the civil of Diglot the Tanzania.

Or do you play in terms of <unk>.

In the edge of debt.

Adjusted within the <unk> financed with another change yet in page Zyla.

The <unk> launching on the challenging interest proposals Z the price.

Without medallion can do of thank all of the whole project in the leases.

All of March 'twenty set and we sign of the management contract of stagger them further and the stagger the icon of Changsha of National Exhibition Center Hotel the.

Total room counts are rich are reaching 1000 rooms, and also have the facility of one.

170000 square meter conference.

We will leave.

We think the cooperation of its just the start and we're going up for C more and more of cooperation later all.

San Antonio <unk>, Zhu of diverse and zoom and the social <unk> volume in that San Antonio using Tc.

Now, let me turn to the microphone to shoot for.

Introduced our strategic focus sales force.

And the technology.

And can share.

Thanks, Tinkly, despite the COVID-19 pandemic impact, we still expanded our membership base non roughly $150 million by the end of 2000 1910 year 170 million of by the end of 2019, our strong direct the sales.

Capability was also one of the critical factors to drive our strong on Badger line in that could encourage during 2020 group.

Moving forward when would the for the emphasize from beauty, even stronger multi dimensional divert the sales capabilities.

<unk> for FX, including in store sales Edgewood App cost with the customer and cross industry aligns and shown on slide 15 out of a discuss one by one.

For the new dose at the left hand side of the slide displays our jive each for attracting new member in our hotels with many of <unk> acquisition cost cut comes the scan. The QR code, we provided it to become our panda for using the various facilities.

Selling and the functions our hotel such as zoom Kiwi projection longyi, selling kind of England service and if so.

However, only of check the new member 19, NAV. We also utility return then and transfer them to be repeated custom the.

Therefore, we have for that empower our offline hotel by providing comprehensive technical tools and systems.

As that CRM system, and online hotel efficiencies 10 for helping done too badly.

Then content.

Needs and the for the improved seven columns by doing so we believe our.

Offline hotel, we are not only have capacity to attract new members, but also to transfer them into low you cut and where high repurchasing fleet.

When two of our Android App, where we have launched our edge, whether the new <unk>, we call. The <unk> III at the upcoming few days comparing to the <unk> the new at the or provide miles more membership tree of related more infrequent and sell it is true in baby in the.

<unk> functions, such as the online checking and the more value added service such as the more room facility come true and the newly added the function in the upcoming new App will be part of the team to further improve our user experience and the highest higher repurchase.

The Street.

Moving to next slide the cockpit of custom development was also another area as well.

Well, we put a lot of assets during 2020, well, we're happy to see a very good cost of Com, we achieved during the last year our penetration.

Two of the top 3000 public leasing companies due to the tune of 13, 2% by the end of 2020 compared to only 10% in 2019.

Hi, Syed.

Eight of the slide.

Some of the customer we signed the recently.

See the covering all kinds of state owned enterprise global companies and online cooperation we believe that corporate of cut them. We are still play a very important in the June for our direct sales strategy, especially considering we have taken leave the delayed penetrating into the.

Hi, and thank you Matt.

No we have nearly 100 of 17 million members now with dosing.

This is still very small and our target is to sell abroad of population. Therefore, a part of our path from above mentioned the Jive is to include members organically. We are also attempting to across the industry aligned with the large.

Traffic aggregate debt platforms, when they made the b to b to ex aligned strategy.

The only clients the false traffic started internally please move to slide 20.

For the Bto B to B modules, we are attempting to cooperate with those platforms, which are offering us the by completion weighted with the connect our reservation system with those platforms and enable us the of corporate accustomed to easily book our hotels for the <unk>.

<unk> B to C model, where we're deeply quickly with the Franks.

Frankly yields for our large traffic consume our platform highly relevant the two hotel services.

Such as map airline business and car hailing E Commerce online way due to attract the new customers moving to D edge.

As of the COVID-19 pandemic of steel affecting our European business.

Our digitalization project still remains it remains of progressing with the funnels of grid for the last of 100 the base.

We expect for the whole process to be completed by the middle of 2020, one we would like to fully utilize fly to China comp.

Confidence of high optional efficiency and the loans the technology capabilities to further optimize the DH operation for battery efficiency and the profitability in the future that would it be of bank starting of the basis for a lack of development in European market.

In conclusion as mentioned of <unk> earlier in the <unk>.

<unk> is one of the important of strategy for Baidu also directed sales is in handset and pad of knowledge is the ABP and catalyst both a critical part of our three England Philippa component.

The Formula two sub part of flash of long term sustainable growth.

Where would the continually reinforced our direct sales efforts and further develop develop of our advanced the technology capabilities with that now our talent culture Teal to discuss our Q4 and 2020 full year operation of financial rebuilt.

Yes.

Thank you <unk>.

Good morning, or good evening, everyone wherever you us, let's move on to our operational and financial review for 2020.

As shown on slide day tree at the end of 2020, we had the total number of six thousands of 189 hotels with 600 ramp of <unk> one.

100, I think the two of group.

In operations, an increase of 21% from the end of the engine.

Excluding the room inventory from the hedge which was consolidated into watching from the <unk>.

January 2nd the 20 legacy of Batu <unk> would have been 628135 at the end of 2020, an increase of 18% from the end of 2019.

Despite the prolonged lockdown due to the COVID-19 pandemic, we accelerated our hotel openings at the second half of total 'twenty. However, due to the impact of COVID-19 impacting both of our China Chinese and European business total <unk> at the hotel level declined by 6% to the degree.

In ex excluding the hedge total turnover would have reduced by 12% to 30 billion from a year ago.

Turn to page 20 for less.

Legacy <unk> blended revpar for Q4, 'twenty have recovered from the 97% level of 2019 level.

The ADR in Q4 2020, you have almost recovered.

2019 level to 200, the day, one and indeed, while the occupancy in Q4 is one percentage point lower compared to 2019.

For the full year of 2020 due to the Lockdowns and travel restrictions as a result of the COVID-19 in China, particularly during the first half of 2020, I'll wrap PA declined by 25 percentage points.

The benefit of defense to 149, reminbi compared to last year.

This was attributable to a drop in ADR by 11% and the drop of occupancy by 13 percentage points compared to last year.

Please turn to page 25, our legacy business had severely impacted by COVID-19 pandemic in Europe since March 20.

Our European business recovered during the last summer by has since been negatively impacted by the second and third waves of the pandemic since September 2020, many European countries important markdown in order to contain the pandemic for example, the German government initially plan to import the lockdown from November to early December.

In 2020, then extended to January in day to day, one and then data onto February and now through April 18th 2021.

The German government also recently announced hearts proud of restriction during the coming is the holiday in April these travel restrictions significantly impacted our revpar on patient five legacy <unk> blended Revpar for Q4 day 20 declined by more than 74% to 31 euro compared to Q4.

For Ben and I did.

The ADR dropped by 22% to 76 Euro and the occupancy dropped by 45 for five percentage points compared to Q4 day.

For the full year in 2020 of the blended revpar declined by more than 50% to 31, Europe attributed to lower ADR and significantly lower occupancy given the provide an update on how the core with the extended COVID-19.

In Europe, Nathan in my presentations.

Please see our financial results on slide 26, all of the revenue grew by 6% in Q4 of declined by 9% the for the full year of 2020.

These revenue trends were better than our previous guidance breaking down of the revenue growth in Q4, 2020 net revenues from our lease and operate the hotels improved by 5% year over year and net revenues from our <unk> and franchised hotels was also up by seven percentage year over year.

In Q4 2020.

The revenue mix of our business that the acquired in early 2020 had the early and had a higher weighting of lease and operate the hotels relative revenue contributed by asset light.

The <unk> business model of how the core debt at 3% in total revenues same as 2019.

Excluding the hedge revenue contributed by ex unlike many of <unk> models improved by three percentage points of 35% in Q4, 'twenty 'twenty. The I expect the contribution from our <unk> business will continue to increase going forward.

Please turn to slide 27, due to the Covid 1919 impact in 2020, our revenue from mid and upscale hotels decreased by 3% to 6 billion accounting for 54% of the total net revenue.

Excluding revenue from <unk> revenue from mid and upscale hotel would have been decreased by 20% to for 5 billion.

Let's now turn to slide 10, the eight on the operating income and margin the repair.

For the loss from operations for Q4, 2020, while the $134 million compared to a profit of $486 million last year the <unk>.

Loss from operation had already considered a non cash fixed asset impairment totaling 100 and for the.

The $40 million related to.

Our hotels two hotels in the H all of which we plan to close upon the expiry of the leases as well as a couple of hotels in China.

Excluding the impact of this fixed asset impairment the across or even better than breakeven, excluding the hedge which had continuous to be effected by the second and third wave of COVID-19.

The in September 2020, as well as the success of impairment legacy quality recorded in income from operation of $215 million in Q4 2020.

The hotel operating cost and other costs for Q4, <unk> was $2 7 billion as mentioned above this amount included a noncash fixed asset impairment of $140 million.

Related to hotels that we plan to close.

Excluding the history of the hotel operating costs amounted to $2 billion compared to $1 9 billion in Q4.

Last year.

Higher hotel operating cost of our mainly attributed to high end of these costs.

Position of amortization cost consumables related to our leased the operate the hotels opened in Q3 and Q4, the intensity and also in China of $20 million, except the impairment related to hotels debt to be closed in China.

As Julie mentioned during his presentation earlier.

Going forward, we would use.

Like approach to speed up the development of our upscale hotel brands in China. In this connection we reported a lower operating expenses in Q4 day 'twenty and we expect this trend to continue going forward.

In Q4, we recorded in selling and general administrative expenses of $399 million, excluding the hedge our SG&A expenses were $388 million compared to 375 million in Q4 last year.

The higher selling expenses in Q4 was mainly due to the several major promotional events, including but not limited to five sessions of the Guangzhou low conference held in Guangzhou, Changsha, Chengdu, Beijing, and Shanghai in Q4, and also of setting out of local area of direct sales team to both our two beep business.

As Susan mentioned in her presentation earlier the.

The higher selling expenses was partially offset by a lower G&A of general administrative expenses due to headcount reduction exercise in 2020 Q1.

Turn to slide 29 on the operating income and margin for the full year for.

The reported loss from operations was $1 7 billion compared to a profit of $2 1 billion last year ex.

Holding the hedge again, which has continually been effected by the second wave of COVID-19.

Legacy of watching recorded a loss from operations of 100 million for any lending.

The hotel operating costs and other costs for the full year in 2020 was $9 8 billion excluding.

Excluding the hedge the hotel operating cost of module to seven 4 billion compared from so that by 2 billion for 2019.

Higher operating costs were mainly attributed to higher lease cost depreciation amortization and consumables relate to our new lease and operate the hotels that has been opening day event.

As mentioned in earlier patients, we will use our new approach to speed up development of our upscale hotel brands and therefore, we have recorded a roll up the operating expenses in 2020 totaling $288 million compared to our current 2 million last year.

We expect to record of lower operating expense of whats going forwards.

For the full year, a day 20, we recorded an ex selling and general administrative expenses of $1 8 billion ex.

Excluding the hedge our selling and general administrative expenses was <unk> 1 billion compared to $1 3 billion last year the.

Total SG&A costs were attributable to our aggressive cost cutting and hit call restructuring taking place during Q1 2020.

Turning to page 30.

Our adjusted EBITDA decreased to two hundreds of the $5 million.

In Q4, 2020 compared to 854 million last year. This amount had considered the fixed asset impairment of $140 million mentioned that I mentioned earlier that had been recorded in both of the hedge and enter our China business.

Excluding the patients allowed to the QUADRA as of the EBITDA loss of $164 million, representing 11% decrease compared to last year due to debt. We suggest the pandemic in selected cities within China During November and December in 2020.

In Q4, we reported an adjusted net loss of $8 million, excluding the hedge we record an adjusted net income of $300 million of extending our 27% decrease in adjusted income.

Due to lower Revpar the.

Our non-GAAP pro forma adjustment mentioned on this page included unrealized gain of losses from fair value changes of equity related low of investments such as our cautious.

Turning to page 31 for adjusted EBITDA and net income for the full year of the new Denting. Our adjusted EBITDA loss was $244 million. In 2020 is amount of had considered goodwill impairment of $437 million in Q3, and fixed asset impairment overall 272 million, which day.

Our total of $700 million in 2020, excluding these two non cash impairments, our adjusted EBITDA would have been in the positive territory.

Excluding the hedge legacy of Quadro <unk> record of positive adjusted EBITDA of $1 1 billion.

The chart on the right hand slide shows that the record adjusted net income loss of $1 8 billion in 2020.

Excluding the H led the required to reported an adjusted loss of $159 million.

Coming to pay for the tree.

COVID-19 update.

When we first reported to you on the impact of the COVID-19 impact in June 2020 view of experiencing negative operating cash flow and significant cash shortfall. We also had significant overlap.

Hanging from the potential default of our $1 billion syndication loans due to a drop in EBITDA debt fails to meet the financial covenants.

That will that will also of huge potential redemption rates from our corners of the 5 billion USD convertible bond due to our depressed share price debt fell below 30 U S. Dollar debt became a long way since last June as.

As mentioned by Jean for it earlier, our China business has been recovering very strongly from the pandemic and so did our EBITDA and operating cash flow.

In addition, we raised of $400 million U S. Dollar from a profitable bond issuance in may of 'twenty 'twenty before the rate of approximately $900 million from our secondary listings on the Hong Kong stock exchange with this cash we managed to reduce our net debt position from a cross the $10 billion at the end of.

Our Q2.

Two 5 billion at the end of Q for Q4 at any day.

The overhanging risk of breaching the financial covenants in the $1 billion syndication loans had been fully resolved we had achieved the financial covenant waiver condition that requires for the China business record the minimum of 1 billion adjusted EBITDA during the second half of 2020.

We recorded a $1 5 billion as of the EBITDA for our China business during that period.

The risk of comparable volume redemption had also been resolved following the recovery of volume share price.

There will almost zero redemption at the end of put debt back in early November 2020 from now on this 475 million convertible bond will only be redeemed or converted into auto share at the end of the eight and do.

We are pleased to share the bulk of our convertible bonds.

Well in the money therefore, the comfortable walk the investors were more likely to convert the ahead into quality sheds.

At the end of 2020, we had approximately $7 billion of cash on hand. In addition, legacy Quadro Unutilized bank facilities totaling $6 5 billion. This cash and bank facilities will allow for due to further pay down of Hua <unk> bank debt in the in 'twenty, one and also to be used where the.

True any unforeseen circumstances.

Coming to the finish of impact of COVID-19 on Deutsche Hospitality on page 34.

As mentioned in my earlier presentation, our European business had and call for the second and third wave of COVID-19 pandemic.

<unk> got the importance of markdown.

Initially the planning at the beginning of December and now extended to April 18 data in one of the German government has also announced the stockpile during the Easter holiday.

This had the ex.

Second our business in Europe to compensate for the business loss. The German government has extended the scope and the duration of government subsidies.

In addition to the salary subsidies on shop has put debt we had been receiving based on our estimates of the government of update to be received will will cover the shortfall in EBITDA due to the expansion of lockdown in 2021 we will only record the income upon the receipt of such cash.

Similar to our action in China, We had any had we have been negotiating with the landlords to reduce the rental payments.

We have been to be supportive. In addition, we have also put our staff on temporary furlough and frozen our hip pulse and reduce discretionary spending and capital expenditure.

We expect the maximum cash flow GAAP to be in the range of 40 to 50 million Euro for our German operation and the full year of the eight one.

We are also in discussion with our local banks in Germany for banking for Paul the has been supportive.

Turning to patients that the two on guidance compared to Q1 2020, we expect our net revenue for day 21.

The grow by 10, 8% to 10% of 61% to 63% excluding dot hospitality.

For the full year for <unk> 21, compared to 2020, we expect our revenue grew by 50% to 54% to provide a more meaningful comparison by comparing with 2019, we expect our net revenue for day 21 to decline by 7% to 9% or declined by 12% to 14% excluding Deutsche hospitality.

For the full year operating the one compared to 2019, we expect our revenues grew by 36% to 40% of 15% to 19% excluding the hedge as.

As mentioned earlier Chinese carbon imports the local policy during the Chinese new year period, which had negatively impacted our business in January and February they need to and what <unk>.

Excluding the first two months in 2020, one we expect our rent net revenue to grow to grow by 7% to 9% compared to Q1 during the night.

123%, excluding the hitch.

For the last 10 months of intended for the remaining Lockheed Martin in 2020, one we expect our revenue to grow by 45% to 49% both of the system for the defense if excluding the hitch.

We said our gross hotel openings positive of.

Hum of one 800 to 2020 day, one all of the ahead, we estimate our hotel closure at the range of $505 50.

With that please open the floor for Q&A.

Yes.

Thank you so much ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask the question you will need the press the star and one on your telephone and wait for your name to be announced if you wish to cancel the your request. Please press the hash key again.

And one if you wish to ask the question.

And our first question comes from the line of Justin Kwok from Goldman Sachs. Justin Your line is now open.

Hi morning management, Thanks for taking my question on.

Glad to hear about the strong recovery.

The March two day.

The more like the flow so that'd be the opening of the country I got to kind of top down question I wanted to check in the.

The first one that's on the expansion plan that the other one than some of the high end segment.

So on the first one.

With a with a deeper zone.

I mentioned in the about the progress. It seems like you guys are very well on track to achieve a 10th of what Josh the thousands of cheese and 10000 hotels sometime in next year. So can I check index too what do you think would be the mix of milestone for the company going beyond each of the next like three for five years in terms of the.

So the Ts in terms of the size of the portfolio and with that in mind, what would be the split of.

The segment.

And also the split of the cities by that that's true.

Perhaps I for one of the other question as well, which is one of the high end side.

I'm glad to see the you were making progress with the <unk> transaction with <unk>.

Can you also share a bit on what youre seeing on an aggregate on your high end of expansion plan because you still have some of your own brands now like Georgia and also in the city, which is north of our which are not even of the joint venture. What are you seeing on the growth and the trajectory for these brands as well. Thank you.

In the engine.

The diesel and use the tender on the essential items.

The idea, whereas some of them.

Yes.

Sandler O'neill.

The matching of fungi EMEA for.

Conditions in the holiday season.

The Juliet.

Got you.

Sure.

The deal in viewership with ICF for instance, in one day and we're making the audio.

Range because it will answer the June the went into China, which includes also the the assassin.

Now with Iot zone, and that's when the versus home for you kind of let's say <unk> from docs to model. The <unk> for example included 95.

Great.

Cumulative two items on the two northern got us on the other.

The other.

The Youtube <unk> zone that we've launched <unk> zone Uhm.

Dozens of his home in zone, the <unk> heard from losses.

The incidence.

Jones the chute.

The <unk> has October two of the.

The Continental G. Those with the uncertainty in China to pool, so the overlay the Hudson goodwill the.

Malibu and achieve items with you managing them.

Then the Hiseq 2000 through the gene using codes on the up to the end of <unk>.

Okay.

Sure.

So we foresee there are promising growth potential in all segments testing not just the upscale but also economy in the mid scale.

Yes.

We think as we penetrate into lower tier cities. The majority of the development will be focused on midscale and economy, and we will add more upscale hotel in the tier one tier two cities.

Our target is reached.

Alright.

10000, 15000 hotels in next five years and we believe the majority will continue to be a midscale and economy Hotel cheeses.

<unk> has for the further meetings thoughts into the doorway to this end of the.

And the jingles includes wind up the call.

In the quarter.

The two doses of <unk>, Jim Jim in the Youll need of industry PTC is going to go to $92 in the Chi.

This was the the dividend.

Yes.

So part of the target.

Segment's growth not only of economy mid scale, but also upscale in the resort hotel therefore.

I wanted to Echo chairman Chief point to own the organizational capability, we required all kinds of the organization.

<unk> formation and also the talent pools.

Yeah, the warranty issue.

Either control of the physicals of panel content.

Number two in Chicago, the MP mutual here for <unk>.

Interest <unk>.

Okay.

Sure.

Got the hard to pull off for example, the team.

The momentum.

All of the two doses of current Cushing volatile for the future can do so the coinsurance Goldust at home, who utilize all of the pin pad.

The <unk> Cushing part of the future the Mega comparatively to the that's how you quantify that.

Right.

So in the upscale segment, we see more and more diversified.

Men from various customers. Therefore, we deploy a multi brand strategy in the upscale segment.

For the Bureau down in the CTO Magellan with orders from <unk>.

In the June.

<unk> for the European Thats, adding seats or maintain the plaza true.

Yes.

And that is when the rule of thumb.

Lots of machines beyond the the tannenbaum.

Rich.

The engage our hardwoods the calls one of the finances of biologic for you guys thought of it.

For example of interest CD will follow the deployment of high speed train network in China to facilitate the transportation and joy represent more about the confidence of the new style of Oriental culture. So ensure.

<unk> <unk>.

There will be of different kinds of hotels catering to different kinds of the customer need.

Okay.

Yeah.

Thanks.

Next question please.

Thank you.

Hi.

Thank you so much once again, ladies and gentlemen, it's starting one if you wish to ask the question and our next question comes from the line of Julian <unk> from Bank of America. Kelly. Your line is now open.

Thank you good morning.

I also have two questions. My first question related to the revenue assumption.

The revenue guidance for 2021 can.

Can you tell us a little bit more in detail I know you guys mentioned about excluding January February are the.

From a growth assumption should be somewhere about like a dropbox I'm sure is based on 95 for 100 per ton of 2019 level.

If we look at the.

Revenue growth assumption of 50% to 54% in 2021.

The.

Sumption for the same store pool.

Compared to 2019 for.

For the China portfolio and also for the a.

The AG portfolio.

And that that's my first question.

Okay.

I will say that for the Chinese portfolio is that for the same hotel revpar.

Our revpar assumption will be in the range of 95 to one.

100.

95 for 100%, Okay, and then for the dose of stability, we have actually revised downwards. So the fact that the.

We give you the specific one but because of that this is the.

For the German operation Thats, because the timing of the completion of the Lockdown is still very uncertain, but the <unk>.

<unk> put in the appropriate range are the cargo the any potential the shortfall.

Okay.

And for the 90 Park 200 debt the same store number same store revpar for sure right.

Correct.

And also like the reason a ton of.

You just mentioned the recovery was quite strong in March of.

That's the recovery is somewhat different from the last one meaning like the what's the landmark here for Ya for city and also in terms of specifically Shanghai recovery.

Is there anything that you've noticed that well for sharing.

Okay.

I think our recovery has occupancy has reached approximately like a 7% already and it has already been considering the client the ramp up particularly net before the meat of before the long wait right.

The party conferences of beef.

For the ends of the January of total.

The 10 of March and subsequent debt there was a big rebound so constrained diabetes debt medium for the March we estimate that the occupancy to be around in the range of 87%.

Okay I see.

And my second question actually relates to the cost side and then also I think it's I.

Listen.

Correctly of the company has about 140 million write down and sort of like.

If we take that out how should we think of both the full Q cost structure, because it seems like it does still from increase compared to free to and if we think of about 2021 cost structure.

Fourth quarter.

Great place to start end of just based on debt to two.

To kind of.

Extrapolate for the 2021 number.

It's a good place to start the funded Hendi is that our view of share most of our some of the programs.

Because the <unk> 2021 is that beyond the only in the full recovery in the recovery stage by the also in the aggressive more in the expansion in both our development and also our sales efforts. So we would be the share more during the Q1 conference.

Okay.

Yes, sorry.

Sorry, yes and for the one.

140 million right of.

Whats the split between Deutsche Hospitality, and all of China of portfolio.

The hunter of $40 million of debt is the $120 million is related thoughts of stability related to hotels and $20 million is relative.