Q4 2024 Atour Lifestyle Holdings Ltd Earnings Call
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Operator: Ladies and gentlemen.
Okay.
Ladies and gentlemen.
Operator: Thank you for standing by and welcome to Atour Lifestyle Holdings fourth quarter and full year 2024 earnings conference. At this time, all participants are in listen-only mode.
Thank you for standing by and welcome to our top lifestyle holdings fourth quarter and full year 2024 earnings conference call.
At this time, all participants are listen only mode.
Operator: After the speaker's presentation, there will be a question and answer session. Today's conference is being recorded.
After the speaker's presentation, there will be a question and answer session.
Today's conference is being recorded.
Luke Hu: At this time, I would like to turn the conference over to Mr. Luke Hu from Senior IR Manager. Please go ahead, sir. Thank you, operator. Good morning and good evening, everyone.
Speaker Change: At this time I would like to turn the conference over to Mr. Luc Pez.
From senior IR manager. Please go ahead Sir.
Speaker Change: Thank you operator, good morning, and good day, everyone welcome to our fourth quarter and the full year 'twenty three 'twenty four earnings conference call. Today, you will hear from our founder Chairman and CEO, Mr want hygiene, and our E. B P codes therefore, Mr. Paul before we continue please.
Luke Hu: Welcome to our fourth quarter and four-year 2024 earnings conference call. Today, you will hear from our founder, chairman, and CEO, Mr. Wang Haijun, and our EVP co-CFO, Mr. Jianfeng Wu.
Luke Hu: Before we continue, please be aware that today's discussion will include forward-looking statements and federal securities laws. These statements are subject to various risks and uncertainties, and the actual results may differ significantly from what is stated or implied in our comments today. The company is not obligated to update any forward-looking statements except as required by applicable laws.
Speaker Change: A weird that todays discussion will include forward looking statements and are federal securities laws did the statements are subject to various risks and uncertainties and actual results may differ significantly from what it states are empowered to in our comments today.
Speaker Change: Company is not obligated.
Speaker Change: Public data to update any forward looking statements, except as required by applicable laws. Additionally, during this call our management will discuss certain non-GAAP financial measure are solely for comparison purposes for a clear understanding of these measures and a breakfast edition of GAAP to non-GAAP financial.
Luke Hu: Additionally, during this call, our management will discuss certain non-GAAP financial measures solely for comparison purposes. For a clear understanding of these measures and a reconciliation of GAAP to non-GAAP financial results, please refer to the earliest release issued earlier today.
Speaker Change: Results. Please refer to the earn yesterday released issued earlier today. Furthermore, a web cast replay of this conference call will be accessible on our website at IR adult.
Luke Hu: Furthermore, a webcast replay of this conference call will be accessible on our website at ir.yaduo.com, where a copy of the results presentation is also available.
Mr. <unk>: Why AUO com, where a copy of the results presentation is also available now I will turn the call over to Mr. <unk> our CEO.
Haijun Wang: Now, I will turn the call over to Mr. Wang, our CEO. Thank you, Hechen. Hello, everyone. Thank you for taking part in the 4th quarter of the 2024 Asia-Pacific Group's annual performance conference. Thank you, Luke. Hello, everyone.
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Haijun Wang: And thank you for joining Atour's fourth quarter and full year 2024 earnings call today.
Speaker Change: You look hello, everyone and thank you for joining a towards fourth quarter and full year 2024 earnings call today.
Haijun Wang: 请大家翻到我们PPT的第三页 2024 is a year of innovation and breakthrough in Atour's three-year strategic plan. Under the strategic leadership of China Experience 2000 Good Shops, we continue to expand brand influence and achieve a double standard of business scale and management quality. In the process of experience upgrade, we continue to deepen the value of Chinese experience through the business model of accommodation and retail double-wheel drive. In terms of scale expansion, we have successfully built a diversified brand array. Sijie Lin, Ronald Leung, Sijie Lin, Xianda Xu, Haijun Wang, Xin Chen, Jianfeng Wu, Wei Liu, Hong Lu, Atour Lifestyle In 2024, we have built 471 hotels.
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Haijun Wang: New contract, 670 taels Not only did they exceed the target set at the beginning of the year, but they also further boosted the scale of 2000 Good Shops.
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Haijun Wang: Please turn to slide three of our fourth quarter and financial year 24 results presentation. The year 2024 marked a chapter of innovation and breakthroughs in Atour's three-year strategic roadmap. Guided by our vision of Chinese Experience 2000 Premier Hotels, we continued to expand our brand influence, driving sustained growth in both business scale and operational excellence. As we elevated our experiential offerings, we further deepened the essence of the Chinese experience through a dual-engine business model that seamlessly integrates hotel and retail. In terms of network development, we have successfully curated a diversified hotel brand portfolio, reinforcing our leadership in the upper mid-scale hotel market.
Ricky: Sure.
Ricky: Please turn to slide three of our fourth quarter and financial year 'twenty for results presentation.
Ricky: The year 'twenty 'twenty four marked a chapter of innovation in our breakthroughs in a tourist three year strategic roadmap guided by our vision of Chinese experience 2000 Premier hotels, we continued to expand our brand influence driving sustained growth in both businesses scale.
Ricky: Operational excellence as.
Ricky: As we elevated our experiential offerings, we further deepened the absence of the Chinese experience through a dual engine business model that seamlessly integrates hotel and retail in terms of network development. We have successfully curated a diversified hotel brand.
Ricky: Portfolio reinforcing our leadership in the upper mid scale hotel market in.
Haijun Wang: In 2024, we opened 471 new hotels and assigned 670 new projects, not only exceeding our initial targets but also solidifying the foundation for achieving our 2,000 premier hotels target.
Ricky: In 2024, we opened 471, new hotels and signed 670, new projects not only exceeding our initial targets, but also solidifying the foundation for achieving our 2000 premier hotels targets.
Haijun Wang: Next, I will introduce the details of the fourth quarter of 2024 and the business of the year. Now I would like to provide more details on our performance for the fourth quarter and the full year of 2024. In the 4th quarter, the gross profit of the group reached 337 yuan, which is 94.1% of the same period in 2023. Among them, OCC is 98.2% in the same period of 23 years ADR is still affected by high-frequency and recovered to 96% in the same period of 23 years Let's begin with our hotel business.
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Speaker Change: Now I would like to provide more details on our performance for the fourth quarter and full year of 2024, so essentially panned out well then PBT that yet.
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Speaker Change: Let's begin with our hotel business. Please turn to slide five our Revpar reached to RMB 337 during the fourth quarter, representing 94.1% of 2023 level for the quarter.
Haijun Wang: Please turn to slide 5. Our REVPAR reached RMB 337 during the fourth quarter, representing 94.1% of 2023's level for the quarter. Specifically, OCC stood at 98.2% of its level for the same period in 2023. ADR endured ongoing pressure due to the high comparison base effect, reaching 96% of its level for the same period in 2023.
Speaker Change: Specifically OCC stood at 98, 2% of its level for the same period in 2023, ADR endured ongoing pressure due to the high comparison base effect, reaching 96% of its level for the same period in 2023.
Haijun Wang: Please turn to page 6 Most mature hotels have more than 18 months worth. And still they have a great ribbon-cutting experience. In the fourth quarter, copper, electricity, copper, pen, Rollipop Recovered to 96% of the same period last year Among them, OCC recovered to 99% in the same period last year, and ADR to 97.4% in the same period last year.
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Haijun Wang: Please turn to slide six. Our mature hotels in operation for more than 18 months continued to outperform the group's hotels overall performance during the fourth quarter. Same hotel, Ravpar, for the fourth quarter reached the 96% of 2023's level for the same period. Notably, OCC steadily recovered to 99% of 2023's level for the fourth quarter, while ADR reached a 97.4% of its level for the same period of 2023.
Speaker Change: Please turn to slide six our mature hotels in operation for more than 18 months continued to outperform the group's hotels overall performance during the fourth quarter.
Speaker Change: Same hotel Revpar for the fourth quarter reached the 96% up 2023 level for the same period.
Speaker Change: Notably Occ's steadily recovered to 99% of 20, 23% level for the fourth quarter, while ADR reached at 97, 4% of its level for the same period of 2023.
Haijun Wang: Please turn to page 7 In 2024, the brand will continue to grow, and the organization of our development team will be fully developed. The number of newly opened and signed hotels throughout the year has broken a record high, and the hotel network has expanded rapidly. In the fourth quarter, we opened 111 new hotels and opened 471 new ones throughout the year, which is 63% higher than the previous year. 截止四季冬末 The number of hotels in the group has reached 1,619, an increase of 33.8%. The number of pipe projects has reached 741, which is a 20% increase.
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Haijun Wang: to achieve the goal of 2,000 good stores in 2025.
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Haijun Wang: Please turn to slide 7. In 2024, as the group's brand awareness continued to strengthen, the efficiency of our development team became increasingly evident. For the full year, both new hotel openings and signings reached record highs, accelerating the rapid expansion of our hotel network. In the fourth quarter alone, we opened 111 new hotels, bringing the total number of openings for the year to 471, representing a 63% year-over-year increase. By the end of the fourth quarter, the number of hotels in operation had risen to 1,619, representing a 33.8% year-over-year growth. Meanwhile, the number of hotels under development expanded by 20% year-over-year, reaching 741 as of the end of the quarter, further solidifying the foundation toward achieving our goal of 2,000 premier hotels in operation by 2025.
Speaker Change: Please turn to slide seven and 2024 as the group's brand awareness continued to strengthen the efficiency of our development team became increasingly evident.
Speaker Change: For the full year, both new hotel openings and the signings reached a record highs accelerating the rapid expansion of our hotel network.
Speaker Change: In the fourth quarter alone, we opened 111, new hotels, bringing the total number of openings for the year to 471, representing a 63% year over year increase.
Speaker Change: By the end of the fourth quarter the number of hotels in operation had risen to 1619, representing a 333, 8% year over year growth.
Speaker Change: Meanwhile, the number of hotels under development expanded by 20% year over year, reaching 741 as of the end of the quarter.
Speaker Change: We're solidifying the foundation toward achieving our goal of 2000 Premier hotels in operation by 2025.
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Haijun Wang: Next, I would like to share the latest developments for Atour's hotel brand. Please turn to page 8 Yaduo 4.0 is an all-round upgraded hotel product by Yaduo Group. Since its launch, it has continued to support our leading brand and product power in the mid-to-high-end market. As of now, Atour 4.0 has opened 16 hotels and 67 projects within the pipeline. With the opening of hotels in the core towns of many high-end cities, we have realized a two-way study of management and experience. to verify Atour's leading position in the mid-to-high-end hotel brand to the market again. With the expansion of the Atour 4.0 hotel, we will provide high-quality accommodation for more consumers.
Next I would like to share the latest developments for eye towards hotel brands.
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Haijun Wang: please turn to slide 8. As our comprehensively upgraded hotel product, Atour 4.0 has consistently reinforced our leadership in the upper mid-scale segment since its launch. Enhancing both our brand strength and product offerings. Currently, there are 16 Atour 4.0 hotels in operation and 67 projects in the pipeline.
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Speaker Change: Please turn to slide eight.
Speaker Change: As our comprehensively upgraded hotel product a tour 4.0 has consistently reinforced our leadership in the upper Midscale segment since its launch.
Speaker Change: One thing, both our brand strength and product offerings.
Speaker Change: Currently there are 16 at all for there are hotels in operation and 67 projects in the pipeline.
Haijun Wang: These hotels in operation have swiftly emerged as top performance in both operating performance and customer experience across key business districts in several higher tier cities nationwide Further highlighting Atour's dominance in the upper mid-scale segment As more of the Atour 4.0 hotels commence operations, we will be well positioned to deliver an exceptional accommodation experience to an even broader customer base Please turn to page 9, we are very happy to announce to you that this quarter Qingju 3.0 has successfully reached the stage milestone of 100 hotels. These hotels are mainly located in the core areas of second-tier and sub-cities.
Speaker Change: These hotels in operation have swiftly emerged as top performance in both operating performance and the customer experience across key business districts in several higher tier cities nationwide.
Speaker Change: Further highlighting a tourist dominance in the upper Midscale segment.
Speaker Change: As more of the tour 4.0 hotels commenced operations, we will be well positioned to deliver an exceptional accommodation experience to an even broader customer base.
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Haijun Wang: 作为我们重点打造的下一个签订评论 rely on unique product positioning and huge development risks to continue to win the market. Please turn to slide 9.
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Speaker Change: Please turn to slide nine.
Haijun Wang: We are delighted to share that during the fourth quarter, Atour Light 3.0 achieved the significant milestone of 100 hotels in operation. These hotels are strategically located in key business districts across second-tier cities and above. As our next brand poised for expansion to 1,000 hotels, Atour Lite continues to gain robust market traction, driven by its distinct product positioning and substantial growth potential. We have always valued the quality of Qingju's brand. Since the launch of the Qingju 3.0 product, we have been closely monitoring the needs of users to create a unique starting point. We have launched many joint activities to show the unique innovation of Qingju as a young lodging brand.
Speaker Change: We are delighted to share that during the fourth quarter of two or 3.0 achieved the significant milestone of 100 hotels in operation.
Speaker Change: These hotels are strategically located in key business districts across second tier cities and above.
Speaker Change: As our next brand poised for expansion to 1000 hotels mature light continues to gain robust market traction driven by its distinct product positioning and substantial growth potential.
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Haijun Wang: We also redefined the concept of personalized lodging in the process of building a youthful social setting. Thanks to the precise market positioning and the youthful communication strategy, we have effectively improved the brand awareness and market penetration of Qingqu, and laid the foundation for the expansion of Atour Group's scale in the mid-range hotel market. We have always been deeply committed to strengthening strong brand awareness for Atour Lite. Since the debut of Atour Lite 3.0, we have closely focused on customer needs, thoughtfully crafted unique touch points, and successfully launched a series of brand collaborations that have not only showcased Atour Lite's unique identity as an innovative, youth-centric hotel brand, but also redefined the personalized accommodation experience through a range of immersive social interactions.
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Speaker Change: We have always been deeply committed to strengthening strong brand awareness for a tour of light.
Speaker Change: Since the debut of Twilight 3.0, we have closely focused on customer needs thoughtfully crafted unique touch points and successfully launched a series of brand collaborations that have not only showcased at four lights unique identity as an innovative youth centric hotel brand.
Speaker Change: But also redefined the personalized accommodation experience through a range of immersive social interactions.
Haijun Wang: With well-defined market positioning and a targeted communication strategy tailored to the younger generation, we have significantly enhanced Atour Lite brand recognition and market penetration. These efforts have laid a solid foundation for Atour Group's expansion in the mid-upscale hotel market.
Speaker Change: With well defined market positioning and targeted communication strategy tailored to the younger generation, we have significantly enhanced our core light brand recognition and market penetration.
Speaker Change: These efforts have laid a solid foundation for a tour groups expansion and mid upscale hotel market.
Haijun Wang: Next is our retail business.
Haijun Wang: Please turn to page 10. In 2024, the Asian retail business continued a strong growth market GMV reached 25.9 billion yuan in the whole year and increased by 127.7% We are more than 90% surrounded on the Internet Moving now to our retail business, please turn to slide 10. In 2024, Atour's retail business maintained its strong growth momentum with four-year GMV reaching RMB 2.59 billion, representing an impressive 127.7% year-over-year increase. Online channels remained the primary driver, consistently contributing to over 90 percent of total GMV, fueled by strong sales performance across multiple e-commerce platforms. Thanks to the sharp market observation and close attention to the consumer's weaknesses, Atour's retail GMV broke through 4.2 billion yuan during the Double 11 period.
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Jason: Moving now to our retail business. Please turn to slide 10 in 2020 for a tourist retail business maintained its strong growth momentum with full year GMB, reaching RMB 259 billion.
Jason: Representing an impressive 127, 7% year over year increase al.
Jason: Line channels remained the primary driver consistently contributing to over 90% of total GMB fueled by strong sales performance across multiple e-commerce platforms.
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Haijun Wang: In the 23rd year, Double 11 increased by more than 80%, and in the 24th year, 618 shopping festival increased by more than 36%. During the Spring Festival, we take hold of important marketing nodes, combine the Spring Festival scene with the user-created emotional connection, innovate and express brand value, and re-create the eye-catching market performance. Atour Planet's deep sleep series of products continue to be popular, fully confirming its constant strengthening of brand value and strong growth. With our astute market insights, we remain highly attuned to evolving consumer trends For the 2024 Double 11 Shopping Festival, our retail GMV exceeded RMB $420 million reflecting an 80% year-over-year increase and a 36% growth compared to the 2024 June 18th Shopping Festival During the recent Spring Festival, we once again delivered outstanding results by seizing key marketing opportunities Creatively fostering emotional connections with customers by seamlessly integrating the festive atmosphere with our fresh brand messaging The ongoing success of Atour Planet's Deep Sleep series further validates our brand market appeal and the strong growth momentum we continue to generate.
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Speaker Change: With our astute market insights, we remain highly attuned to evolving consumer trends for the 'twenty 'twenty four double 11 shopping festival, our retail G. M D exceeded RMB 420 million.
Speaker Change: Reflecting an 80% year over year increase and a 36% growth compared to the 2024 June the 18th shopping festival.
Speaker Change: During the recent spring festival, we once again delivered outstanding results by seizing key marketing opportunities creatively fostering emotional connections with customers by seamlessly integrating the festive atmosphere with our fresh brand messaging.
Speaker Change: The ongoing success of tour planets deep sleep series further validates our branch market appeal and the strong growth momentum we continue to generate.
Haijun Wang: Retail business, as Atour's innovative interpretation and extension of the Chinese experience, is important.
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Haijun Wang: Next, we will talk about our thoughts and practices in the field of deep sleep. Serving as an innovative interpretation and a tangible extension of Atour's signature, Chinese experience, our retail business plays a vital role in supporting our strategy.
Speaker Change: Serving as an innovative interpretation and the tangible extension of a tour signature Chinese experience, our retail business plays a vital role in supporting our strategy, let me elaborate on our prospectus and a key initiatives within a deep sleep sector.
Haijun Wang: Let me elaborate on our perspectives and key initiatives within the deep sleep sector. Please turn to page 11 Thank you.
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Haijun Wang: At the same time, the industry is also facing a lack of brand awareness, serious product homogenization, and the pain of product innovation. In this context, Atour planet, based on its deep understanding of consumer needs, The brand philosophy of continuous deepening and natural deep sleep Improves product core competitiveness Leads to a new trend in the development of sleep economy please turn to slide 11. In recent years, the market potential of the sleep economy has gradually been unlocked. However, the industry faces challenges such as limited brand differentiation, widespread category homogenization, and stagnating product innovation. Against this backdrop, Atour Planet has leveraged a deep understanding of consumer needs to continually elevate to refine its natural deep sleep brand concept and enhance product competitiveness.
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Speaker Change: In recent years the market potential of their sleep economy has gradually been unlocked however, the industry faces challenges.
Speaker Change: Limited brand differentiation widespread pedigree of Modernisation and stagnating product innovation.
Speaker Change: Against this backdrop a tour planet has leverage his deep understanding of consumer needs to continually elevate to refine its natural deep sleep brand concept and enhance product competitiveness. These efforts have positioned it to our planet as a pioneer at the port.
Haijun Wang: These efforts have positioned Atour Planet as a pioneer at the forefront of emerging trends within the sleep economy. In terms of product development, we focus on the diverse sleep needs and pain points of consumers. Through the innovation of technology and materials, we have created high-quality deep sleep products and continuously innovated according to users' feedback. In the process of brand development, the Asian planet is gradually sinking into a unique product view. 以我们的深睡记忆诊Pro系列的产品为例 凭借卓越的产品力和精准的营销策略 我们成功打造出深度契合消费者 对优质睡眠追求的爆款单品 The product of deep sleep memory pillow Pro series has sold 3.8 million units in total sales throughout the year In the whole track, Atour Planet has always maintained a leading position in the industry, firmly occupying the consumer's heart and soul.
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Haijun Wang: To fuel our product development, we rigorously analyze customers' diverse sleep needs and pain points. These insights coupled with our innovation in technology, craftsmanship, and materials have led to the creation of an extensive range of premium deep sleep products. We continuously refine and iterate these products based on customer feedback. Throughout the brand's development, Atour Planet has cultivated a distinctive product philosophy that drives market success. A prime example of this is the Deep Sleep Memory Foam Pillow Pro series, which has achieved outstanding performance. Through exceptional product quality and a well-executed marketing strategy, we have established a blockbuster product model that aligns perfectly with consumers' pursuit of superior sleep, as evidenced by the Deep Sleep Memory Foam Pillow Pro series annual sales exceeding 3.8 million units.
Speaker Change: To fuel our product development, we rigorously analyze customers' diverse sleep needs and pain points.
Speaker Change: These insights coupled with our innovation and technology craftsmanship and materials have led to the creation of an extensive range of premium sleep deep sleep products, we continuously refine and iterate these products based on customer feedback.
Speaker Change: Throughout the brand development of tour planet has cultivated a distinctive product philosophy that drives market success. A Prime example of this is the deep sleep memory foam pillow Pro series, which has achieved outstanding performance.
Speaker Change: Through exceptional product quality and a well executed marketing strategy, we have established a blockbuster product model that aligns perfectly with consumers pursuit of superior sleep as evidenced by the deep sleep memory foam pillow Pro series annual sales exceeding 3.8.
Haijun Wang: In the pillow segment, Atour Planet has consistently maintained its industry-leading position, further cementing our reputation as the go-to choice for the deep sleep in consumers' minds. In addition, with the deepening of the sleeping market and the continuous breakthrough of new products, we have formed a mature research and development team, ranging from new products to product systems. and expand the product lines In 2024, as an important achievement for us to expand our product range, the Deep Sleep Cooling Cup and Deep Sleep Emptiness Cup Pro series has won the consumers' admiration. The annual sales have exceeded 770,000 units.
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Speaker Change: In the Pillow segment, a tour planets has consistently maintained its industry leading position further cementing our reputation as the go to choice for the deep sleep in consumers' minds.
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Haijun Wang: 随着辈子品类表现持续向好 In 2024, the ratio of retail revenue exceeded 20%, and the growth of the share price exceeded 300%. It not only became another important force for promoting Asia's continued development, but also successfully verified our ability to replicate the ability of repayment of loans. Furthermore, through our dedicated efforts in the sleep market and continuous breakthroughs in product innovation, we have developed a sophisticated product development mechanism that has evolved from creating individual blockbusters to offering a comprehensive product category series.
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Speaker Change: Our dedicated efforts and the sleep market and a continuous breakthroughs in product innovation.
Speaker Change: We have developed a sophisticated product development mechanism that has evolved from creating individual blockbusters to offering a comprehensive product category series.
Haijun Wang: Further expanding our Deep Sleep product portfolio, take our Comforter product series, which represents a significant milestone in our category expansion as an example. In 2024, the Deep Sleep Lightweight Comforter and the Deep Sleep Thermal Regulating Comforter Pro series garnered exceptional market recognition, with annual sales surpassing 770,000 units. As the Comforter product line continued to perform strongly, it contributed to over 20% of total retail GMV for 2024, reflecting year-over-year growth of more than 300%. Its success not only serves as an emergent driver of Atour Planet's ongoing growth but also stands as a testament to our ability to replicate our Blockbuster product model across different product categories.
Speaker Change: Further expanding our deep sleep product portfolio.
Speaker Change: Our comforter product series, which represents a significant milestone in our category expansion as an example in.
Speaker Change: In 2020 for the deep sleep lightweight comforter and deep sleep thermal regulating comfort of pro series garnered exceptional market recognition with annual sales, surpassing 770000 units as the comforter product line continued to perform strongly it.
Speaker Change: Contributed to over 20% of total retail G. M D for 2024, reflecting year over year growth of more than 300%.
Speaker Change: Its success not only serves as an emergent driver of a tour planets ongoing growth, but also stands as a testament to our ability to replicate our blockbuster product motto across different product categories.
Haijun Wang: In 2025, we will continue to focus on deep ecology, efficiently promote brand construction and product development. At the same time, we will also pay more attention to improving the basic skills of retail business, bringing users more and better sleep products and higher quality products. for the long-term development of the Asian planet brand. We believe that in the context of the rapid development of the sleep economy and the acceleration of industry integration, we will continue to explore scientific sleep and promote the overall public service level and quality standards of the industry to continue to improve and lead consumers to a better sleep experience.
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Haijun Wang: In 2025, we will remain focused on the deep sleep ecosystem, efficiently driving progress in both brand development and product innovation. At the same time, we will further strengthen the fundamentals of our retail business, offering customers a broader array of superior sleep products and enriched experiences to propel the long-term growth of the Atour Planets brand. We are confident that as the sleep economy continues to expand rapidly and the industry undergoes accelerating consolidation, our ongoing exploration of scientific sleep solutions will catalyze continuous advancement in industry craftsmanship and quality standards.
Holger: In 2025, we will remain focused on the deep sleep ecosystem efficiently driving progress in both brand development and product innovation.
Holger: At the same time, we will further strengthen the fundamentals of our retail business offering customers a broader array of superior sleep products and enriched experiences to propel the long term growth of the tour planet brand.
Holger: We are confident that as the sleep economy continues to expand rapidly and the industry undergoes accelerating consolidation our ongoing exploration of scientific sleep solutions.
Holger: Hello, guys continuous advancements in industry craftsmanship and quality standards.
Haijun Wang: with Atour Planet leading and shaping the evolution of the customer sleep experience.
Holger: With a tour planet, leading and shaping the evolution of the customer sleep experience.
Haijun Wang: Please turn to page 12 Finally, I would like to introduce the progress of channels and members.
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Haijun Wang: Please turn to slide 12. Last but not least, I would like to share our progress across channel development and our membership. In terms of channels, in the fourth quarter, our CRS channel sales-share ratio reached 63.5%, and the annual ratio reached 63%. As the number of corporate clients continues to grow, the sales-per-company ratio of corporate agreements has increased by 21.1% in the fourth quarter. In terms of channel development, our CRS channel accounted for 63.5% of total room nights sold for the fourth quarter and 63% for the full year, respectively. Notably, the contribution of room nights sold to our corporate members rose to 21.1% in the fourth quarter, driven by the ongoing growth of our corporate members.
Holger: Please turn to slide 12 last but not least I would like to share our progress across channel development and our membership business.
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Holger: In terms of channel development, our Crs channel accounted for 63, 5% of total room nights sold for the fourth quarter and 63% for the full year, respectively, notably.
Holger: Notably the contribution of room nights sold to our corporate members rose to 21, 1% in the fourth quarter driven by the ongoing growth of our corporate members.
Haijun Wang: The steady growth of the CRS channel is due to the continuous improvement of the Atour membership system and the continuous enrichment of membership rights. As of the end of 2024, the number of registered members of Atour has exceeded 89 million. has grown by more than 40%. In 2024, we upgraded the A-card membership system of Atour and completed the transformation of hotel and retail members' identities and rights. further deepened the living and retail scene. At the same time, we have also expanded the range of Asia-Pacific service to better meet the growing needs of users and continue to create more unique accommodation conditions for users.
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Haijun Wang: The steady growth of our CRS channel can be attributed to our continuous enhancement of Atour's membership ecosystem and the ongoing expansion of member benefits. By the end of 2024, our registered individual members surpassed 89 million, representing year-over-year growth of more than 40%. In 2024, we also completed a comprehensive upgrade of the ACARD membership ecosystem, seamlessly integrating membership identities and benefits across our two primary service areas. This upgrade reinforced the synergy between accommodation and the retail experience. Additionally, we expanded our input service categories to better cater to the evolving demand for high-priced solutions. consistently delivering unique and tailored accommodation experiences to our customers.
Holger: The steady growth of our Crs channel can be attributed to our continuous enhancement of the tourists membership ecosystem and the ongoing expansion of member benefits.
Holger: End of 2024 hour registered individual members surpassed $89.089 billion, representing year over year growth of more than 40%.
Holger: In 2024, we also completed a comprehensive upgrade of the card membership ecosystem seamlessly integrating membership identities and benefits across our two primary service areas. This.
Holger: These upgrades reinforced the synergy between accommodation and the retail experiences. Additionally, we expanded our service categories to better cater to the evolving demand provide solutions.
Holger: Consistent mid delivering unique and tailored economy.
Holger: Commendation experiences to our customers.
Haijun Wang: Please turn to page 13 In 2025, we will start from the full-screen and keep improving the A-card member ecosystem so that residents and retailers can enjoy consistent and high-quality experiences and services At the same time, promote the improvement and integration of enterprises and individual members of the equal rights and interests system. In addition, we will continue to build a service experience wall to stimulate the cross-consumer potential of accommodation and retail business. In the future, we will continue to create a member-experience integration, launch more scenario-driven operations, and make the Asian-led Chinese experience more contentious and rich in scenarios.
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Haijun Wang: Please turn to slide 13. In 2025, we will continue refining and strengthening the ACARD membership ecosystem by expanding value-added benefits across all touchpoints, ensuring that our hotel and retail customers enjoy seamless, high-quality services across various scenarios. Meanwhile, we will consistently upgrade and iterate the tiered benefit system for both corporate and individual members. Additionally, we will strengthen our closed-loop service experience, unlocking the cross-consumption potential between accommodation and retail. Looking ahead, we will continue to widen our membership experience moat and roll out more diverse scenario-based promotional activities, further deepening and expanding the Atour's signature Chinese experience to enrich its meaning and broaden its scope.
Please turn to slide 13 in 2025.
Holger: We will continue refining and strengthening the <unk> card membership ecosystem by expanding value added benefits across all touch points, ensuring that our hotel and retail customers enjoy seamless high quality services across various scenarios.
Holger: Meanwhile, we will consistently upgrade and iterate the tiered benefit system for both corporate and individual members.
Holger: Additionally, we will strengthen our close loop service experience unlocking the cross consumption potential between accommodation and the retail looking ahead, we will continue to widen our membership experience moat and rollout more diverse scenario based promotional activities further.
Holger: Deepening and expanding the tour signature Chinese experience to enrich its meaning and broadened its scope.
Haijun Wang: Please turn to page 14 2025 is the year of the end of our three-year strategy, and it is also the critical juncture before and after the city. As the market environment deepens day by day, we will continue to hone our basic skills. which focuses on brand craftsmanship, group enthusiasm and digital influence. In the process of accurately grasping the opportunity to develop, we will promote the expansion and quality improvement of housing and retail business. In the future, we will continue to strengthen the Chinese experience benchmark on the basis of steadily achieving scale goals and help the group's long-term high-quality growth.
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Haijun Wang: Please turn to slide 14.
Haijun Wang: As the final year of our three-year strategic roadmap, 2025 represents a pivotal moment in laying the foundation for our next phase of growth. As the market landscape becomes increasingly fragmented, Atour will remain focused on strengthening its core competencies. Our priorities will remain on amplifying brand momentum, boosting organizational vitality, and advancing digital capabilities. By strategically seizing on development opportunities, we will drive continuous breakthroughs in both scale expansion and quality enhancement across the hotel and retail business. Moving forward, with steadfast dedication to achieving our expansion goals, we will continue to establish the benchmark for customer experience, strategically driving sustained, high quality growth for the long term.
Speaker Change: Please turn to slide 14, as the final year of our three year strategic roadmap 2025 represents a pivotal moment in laying the foundation for our next phase of growth.
Speaker Change: As the market landscape becomes increasingly fragmented a 12 well remain focused on strengthening its core competencies are.
Speaker Change: Our priorities will remain on amplifying brand momentum boosting organizational vitality and advancing digital capabilities by strategically seizing on development opportunities, we will drive continuous breakthroughs in both scale expansion and quality enhancements across the hotel.
Speaker Change: And we pay our businesses.
Speaker Change: Moving forward with steadfast dedication to achieving our expansion goals. We will continue to establish the benchmark for customer experience strategically driving sustained high quality growth for the long term.
Jianfeng Wu: Next, let's welcome Jianfeng Wu from Lianqi CF to introduce the financial situation of the company to everyone. Now, I'll turn the call over to our co-CFO, Mr. Jianfeng Wu, to discuss our financial results. Thank you, Haijun.
Speaker Change: So Matt Yamamoto Yankees, therefore, we can't hope.
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Speaker Change: Okay.
Speaker Change: Now I will turn the call over to our co CFO, Mr. Jin song to discuss our financial results.
Jianfeng Wu: Now I would like to present the company's financial performance for the first quarter of the full year 2024. Please turn to slide 16 of the presentation. Our net revenues for the first quarter of 2024 grew by 38.5% year-over-year and 9.8% quarter-over-quarter to RMB2084 million. Net revenue for full year 2024 increased by 55.3% year-over-year to RMB7,248 million The increases were driven by growth in the monetized hotels and retail business. Revenues from our monetized hotels for the first quarter of 2024 will be 1,106 million, up by 30% year-over-year and down by 6.2% quarter-over-quarter. For full year 2024, revenues from our monetized hotels increased by 53.3% year-over-year to RMB4,149 million.
Speaker Change: Thank you Heidi.
Speaker Change: Now I would like to present, the company's financial performance for the fourth quarter of the full year in 2004.
Speaker Change: Please turn to slide 16.
Speaker Change: Of the supplementation.
Speaker Change: Our net revenue for the fourth quarter of 2024 grew by 38, 5% year over year, and nine 8% quarter over quarter to RMB 2000 84 million.
Speaker Change: Net revenues for full year <unk> increased by 55, 3% year over year to RMB 7240 $8 million.
Speaker Change: The increases were driven by growth in the.
Speaker Change: <unk>, the hotel and retail businesses.
Speaker Change: Revenue from our monetize the hotels for the fourth quarter, often therefore were RMB 1106 minute up by 30% year over year and down by six 2% quarter over quarter.
Speaker Change: For full year 2024 revenues from our monetize the hotels increased by 53, 3% year over year to RMB 4140 $9 million.
Jianfeng Wu: The year-over-year increases were primarily fueled by our ongoing hotel network expansion and the growth of our supply chain business. The quarter-over-quarter decrease was mainly due to a decrease in red pox. Revenues contributed by our these hotels for the first quarter of 2024 will be RMB 164 million, reflecting 15.9% year-over-year and 13.4% quarter-over-quarter decline. For the full year 2024, revenues from our leased hotels decreased by 16.4% year-over-year to RMB702 million. The declines were primarily due to a decrease in the number of leased hotels as a result of our product needs optimization. Revenues from our retail business for the first quarter of 2024 were RMB 765 million, reflecting 85.6% year-over-year and 59.5% quarter-over-quarter increase.
Speaker Change: The year over year increases were primarily fueled by ongoing hotel network extension and the growth of our supply chain business.
Speaker Change: The quarter over quarter decrease was mainly due to a decrease in revpar.
Speaker Change: Revenue contributed by our leased hotel for the first quarter of 2024.
Speaker Change: <unk> $164 million, reflecting.
Speaker Change: 15, 9% year over year, and 13, 4% quarter over quarter decline.
Speaker Change: We'll have four years in Italy for revenues from our lead hotel decreased by 16, 4% year over year to RMB $702 million that's.
The decline was primarily due to a decrease in the number of the hotel as a result of our product optimization.
Speaker Change: Revenue from our retail business for the first quarter of Syndeton equal were RMB, 600, or $765 million, reflecting 85, 6% year over year, and nine 5% quarter over quarter increases.
Jianfeng Wu: For full year 2024, revenues from our retail business increased by 126.2% year-over-year to RMB 2,198 million. The increases were driven by widespread recognization of our retail brand and effective product innovation and development as we successfully broadened our range of product offerings.
Speaker Change: For full year cynically for revenues for our retail business increased by 176, 2% year over year to RMB 2190 $8 million.
Speaker Change: The increases were driven by what Brad recommended recommendation of our retail brand and effective product innovation and development. After we successfully broadened our range of product offerings.
Jianfeng Wu: Now let's move to cost and expenses.
Speaker Change: Now, let's move to costs and expenses, please turn to slide 17.
Jianfeng Wu: Please turn to slide 17. Hotel operating costs for the fourth quarter of 2024 increased by 8.3% year-over-year and decreased by 9.4% quarter-over-quarter to RMB 794 million. Hotel operating costs for the full year 2024 increased by 38.7% year-over-year to RMB3,108 million. The year-over-year increases were primarily due to the increases in variable costs such as supply chain costs associated with our ongoing hotel network expansion. The quarter-over-quarter decrease was due to a decrease in our number of leased hotels as a result of our product needs optimization. Growth margin of our hotel business was 37.5% and 35.9% for the first quarter and full year 2024, compared with 29.9% and 36.8% for the same period of 2023.
Speaker Change: Hotel operating costs for the fourth quarter of 2024 increased by eight 3% year over year and decreased by nine 4% quarter over quarter to RMB.
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Speaker Change: Hotel operating costs for the full year 2024 increased by 38, 7% year over year to RMB 3000 $180 million.
Speaker Change: The year over year increases were primarily due to the increases in variable costs.
Speaker Change: <unk> costs associated with our ongoing hotel network pension.
Speaker Change: The quarter over quarter decrease was due to a decrease in a number of the hotel at the results of our product mix optimization.
Speaker Change: Gross margin of our hotel business was 37, 5% and 35, 9% for the first quarter.
Speaker Change: Full year 2024, compared with 29, 9% and 36, 8% for the same period of time.
Jianfeng Wu: Retail cost for the first quarter of 2024 rose by 66.2% year-over-year and 69.8% quarter-over-quarter to RMB386 million For full year 2024, retail costs increased by 111.1% year-over-year to RMB 1,084 million. The increases were associated with the rapid growth of our retail business. The gross margin of our retail business was 49.6% and 50.7% for the first quarter and the full year of 2024, compared with 43.7% and 47.2% for the same period of 2023. The increases were attributable to the increasing contribution from higher-margin products.
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Speaker Change: Retail comps for the first quarter of 2024 rose by 50, or 66, 2% year over year, and 69, 8% quarter over quarter to RMB $386 million.
Speaker Change: For full year 2024 retail costs increased by a 111, 1% year over year to RMB 1000 in <unk>.
Speaker Change: $84 million the increases associated with the rapid growth of our retail business.
Speaker Change: The gross margin of our retail business was 49, 6% and 57% for the first quarter of for the first quarter and the full year of 2017, compared with 43, 7% and seven 2% for the same period of 2023.
Speaker Change: The embraces attributable to the increase in contribution from higher margin products.
Jianfeng Wu: Now please turn to slide 18 Setting and marketing expenses accounted for 17% and 13.4% of net revenue for the first quarter and the full year of 2024, compared with 13.7% and 10.1% for the same period of 2023 respectively. The increases were mainly due to our enhanced investment in brand recognition and the effective development of online channels in line with the growth of our retail business. General and administrative expenses, including share-based compensation expenses, accounted for 4.8% and 4.5% of net revenue for the first quarter and full year of 2024, compared with 6.8% and 6.2% for the same period of 2023, respectively.
Speaker Change: Now please turn to slide 18.
Speaker Change: Selling and marketing expenses accounted for 17% and 13, 4% of net revenue for the first quarter and the full year of any ball compared with 37% and 10, 1% for the period of 2023, respectively.
Speaker Change: The increases were mainly due to our enhanced investments in brand recognition and the effective development of online channels in line with the growth of our retail business.
Speaker Change: General and administrative expenses, including share based compensation expenses accounted for 8% and four 5% of net revenue for the first quarter and full year of 2024 compel.
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Jianfeng Wu: The decreases were primarily due to improved management efficiency and economic upscale. Technology and development expenses accounted for 2.2% and 1.8% of net revenue for the first quarter and full year of 2024, compelled with 1.5% and 1.7% for the same period of 2023, respectively. The increases were mainly due to increased investment in technology systems and infrastructure to support our expanding hotel network and retail business and improved customer experience.
Speaker Change: The decreases were primarily due to improvement improve management efficiency and economics of scale.
Speaker Change: Technology and development expenses accounted for two 2% and one 8% of net revenue for the first quarter and full year of 2020 full compelled with one 5% and one 7% for the same periods of 2010 feet respectively.
Speaker Change: The increases were mainly due to increased investments in technology systems and infrastructure to support outstanding Hotel network and retail business and improved customer experience.
Jianfeng Wu: Please turn to slide 19 Adjusted net income for the first quarter of 2024 was RMB333 million, representing a 49.9% increase year-over-year. Adjusted EBITDA for the first quarter of 2024 was RMB443 million, up by 76.5% year-over-year. Adjusted net profit margin for the full year 2024 was 18%, representing a decrease of 1.4 percentage points year-over-year Adjusted EBITDA margin for the full year 2024 was 24.4%, a decrease of 1.5 percentage points year-over-year The decreases in both margins were primarily due to a decline in red pockets, along with organic growth in selling and marketing expenses amid our retail business expansion.
Speaker Change: Please turn to slide 19.
Speaker Change: Adjusted net income for the first quarter of 2024 was RMB $333 million.
Speaker Change: Presenting a 49, 9% increase year over year.
Speaker Change: Adjusted EBITDA for the first quarter of 2024 was RMB $443 million up by 76, 5% year over year.
Speaker Change: Adjusted net profit margin for the full year 2024 was 18%.
Speaker Change: Representing a decrease of one four percentage points year over year.
Speaker Change: Adjusted EBITDA margin for the full year and if any for was 24, 4% a decrease of one five percentage points year over year.
Speaker Change: The decreases in both margin were primarily due to a decline in revpar along with the of the magic of that organic growth is that in our marketing expenses are meet our retail business expansion.
Jianfeng Wu: Please turn to slide 20. We also maintained a healthy cash position with stable growth momentum. As of December 31, 2024, our cash and cash equivalents totaled RMB 3,618 million. with net cash of RMB 3,556 million.
Speaker Change: Please turn to slide 20.
Speaker Change: We also maintained a healthy cash position with stable growth momentum at <unk>.
Speaker Change: December 31st 2024.
Speaker Change: Our cash and cash equivalents totaled RMB 3000 $618 million.
Speaker Change: With net cash of RMB 3150 $6 million.
Jianfeng Wu: Please turn to slide 21. For full year 2025, the company currently expects total net earnings to increase by 25% compared with full year 2024. That concludes our financial highlights for the first quarter and the full year 2024.
Speaker Change: Please turn to slide 21.
Speaker Change: Full year 2025, the company currently expects total net revenues to increase by 25% compared with full year 2024.
Speaker Change: That concludes our financial highlights for the fourth quarter and the full year and if any for now let's open for Q&A.
Operator: Now let's open for Q&A. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
Speaker Change: Thank you.
Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.
Speaker Change: Your question. Please press star one again.
Operator: For the benefit of all participants on today's call, if you raise a question in Chinese, please immediately repeat your question in English. Please limit your question to one at a time. If you wish to have a follow-up question, please rejoin. Standby and compile while we compile the Q&A.
Speaker Change: For the benefit of all participants on today's call. If you raise your question in Chinese. Please immediately repeat your question in English. Please.
Speaker Change: Please limit your questions to one at a time.
Speaker Change: Wish you have a follow up question. Please rejoin the queue.
Speaker Change: Standby and compile while we compile the Q&A roster.
Dan Qi: Our first question comes from Dan Qi from Morgan Stanley, your line is now open. Good evening, everyone. Thank you for the opportunity to ask questions.
Speaker Change: Our first question comes from Dan Shaw from Morgan Stanley. Your line is now open.
Speaker Change: Great.
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Dan Qi: First of all, congratulations to Guanlingcheng for breaking the record in the number of new business and front-line hotels throughout the year. My question is about the hotel business. I would like to ask if the company can give us an overview Another question is about the 25% increase in annual income of the company. I would like to know how much of this is due to the increase in hotel business. And what is the purpose of the Red Pot for the whole year of 2025? Please allow me to translate my question. This is Dan from Morgan Stanley.
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Stan: Please allow me to translate my question. This is Stan <unk> from Morgan Stanley.
Dan Qi: First of all, congratulations on the new hotel opening and signings record highs in 2024. My question is about the hotel business. Can you share some colors about the hotel's performance on REVPA in first quarter 2025? We also noticed about the full year revenue guidance of 25%. We're wondering what is the contribution from the hotel business and the company's REVPA assumption for the full year?
Stan: First of all congratulations on the new hotel opening in signings recall housing for if any for my question is about the hotel business can you share some.
Stan: Some colors about the hotels performance Revpar in first quarter 2025.
Stan: We also noticed about the full year revenue guidance of 25%.
Stan: We are wondering what is the.
Speaker Change: Could you be a shift from the hotel business and the company's Revpar assumption for the full year 2025. Thank you.
Haijun Wang: 好,谢谢Sam,我来回答你这个问题。 Thank you, Sam, I will answer your question. Thank you, Dan. Let me answer your question.
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Speaker Change: Thank you Dan Let me answer your question.
Haijun Wang: In the first quarter, under the influence of high-tech, our Red Pot in the whole year of 2024 decreased by 6.8% compared to 2023. is basically consistent with the previous market expectations.
Stan: Okay easy to southeast.
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Haijun Wang: In the first quarter of 2025, especially in March, due to the seasonal impact and the weather, the overall rapper performance is relatively fluctuating. We expect that this year's Q1 rapper is expected to fall in the mid- to high-ranking ranks. Due to our high base effect, our full-year ref par for 2024 decreased by 6.8% compared to 2023. And that was in line with the guidance we provided previously. And in this year, quarter one, especially the first half of March, due to some seasonal factors and the weather conditions, our overall RevPAR performance was relatively volatile, and we expect a year-on-year decline in Q1 RevPAR of mid to high single digits.
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Stan: Due to our high base effect, our full year Revpar for 2024 decreased by six 8% compared to 2023.
Stan: And that was in line with the guidance we provided previously.
Stan: And in this year quarter, one, especially the first half of March due to some seasonal factors and the weather conditions. Our overall revpar performance was relatively volatile and we expect a year on year decline in Q1 revpar of mid to high single digits.
Haijun Wang: As of now, we think that there are still uncertainties and challenges in 2025 The market is changing rapidly, and it is difficult to give a specific RAPPORT forecast But we also see the benefits of policies and the continued recovery of business Under the drive of these positive factors, we will continue to promote our economic revenue management strategy We are confident that in 2025, we will continue to improve the performance of our RAPPORT recovery group To improve the long-term revenue of our hotel and stabilize our brand value As of now, we believe 2025 still presents some uncertainties and challenges.
Stan: So more than Icahn, Nevada will materially on one year tenure I should say.
Stan: Which of these inputs.
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Stan: As of now we believe 2025 still presents some uncertainties and challenges the market is changing very rapidly, making it difficult for us to provide specific forecasts on the revpar.
Haijun Wang: The market is changing very rapidly, making it difficult for us to provide specific forecasts on the rough path. Nonetheless, against the backdrop of policy benefits and continued recovery in business travels, we will continue to implement our balanced and refined revenue management strategy and we are confident to enhance the recovery of RevPart performance, thereby boosting our long-term revenue of our hotels and solidify our brand value.
Stan: Nonetheless against the backdrop of policy benefits and continued recovery in business travels.
Stan: We'll continue to implement our balanced and refined revenue management strategy and we are confident to enhanced recovery up revpar performance, thereby boosting our long term revenue of our hotels and solidify our brand value.
Haijun Wang: Although there are some uncertainties about Redcard's performance, based on our continuous expansion of the hotel network and high-quality retail business growth, we are confident that in 2025, the group's revenue will grow by 20%. Although that the REVPAR still is going to remain not so sure, unknown, but our continuously expanding hotel network and the high quality growth of the retail business, we expect the group's revenue to increase by 25% year-on-year in 2025. Xiexie, thank you. Thank you, Dan.
Stan: So on Revpar that Delta that you think the opportunities.
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Stan: Although that the Revpar still is going to remain not so sure I'll note, but our continuously expanding hotel network and at the high quality growth of the retail business. We expect the group's revenue to increase by 25% year on year in 2025.
Operator: Next question. Thank you.
Speaker Change: Thank you.
Stan: Thank you Dan next question please.
Operator: Just a moment for our next question.
Speaker Change: Thank you just a moment Phil next question. Please.
Simon Chun: Next we have Simon Chun from Goldman Sachs. Your line is now open. Thank you for giving me the opportunity to ask questions, Mr. Wang, Mr. Hu, and Mr. Luke. I would like to ask a small question. In the past year, the company has made great strides in terms of opening and signing contracts.
Amit: Next we have Amit.
Amit Jones: Jones from Goldman Sachs. Your line is now open.
Speaker Change: Yeah.
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Simon Chun: I would like to ask if you have any suggestions for 2025. Thank you. Let me translate that into English. Last year, the company achieved record high in both the hotel opening as well as new signing. Perhaps, can you share with us what is your guidance on both measures in 2025? Thank you. Thank you for your question. Let's look at the opening part first. In 2024, the company opened 471 new branches. At the end of the year, the number of hotels in the camp was 1,619, which is more than 33.8% In 2025, the company will continue its positive trend.
John Edmunds: John John Edmunds.
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Speaker Change: And then let me translate that into English last year. The company achieved record high in both the hotel opening as well as new signing.
Speaker Change: Perhaps could you share with us what is your guidance on both measures in 2025. Thank you.
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Haijun Wang: We expect to continue to maintain similar power increase rates.
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Haijun Wang: In 2025, the goal of the year-on-year opening is 500 kilowatts.
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Haijun Wang: We also firmly recommend you implement Our 2000 terrorist reckless attacks Thank you, Simon. And let me try to answer this question. In terms of new openings, we had opened 471 new hotels throughout 2024, bringing our total number of operating hotels to 1,619 by the year end, a year-on-year increase of over 33.8%. And in 2025, this positive trend will continue. We expect to maintain a similar hotel opening growth rate with a four-year target of 500 new hotels so that we can steadily advance toward our strategic goal of achieving 2,000 premier hotels by 2025.
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Simon: Thank you Simon.
Simon: And let me try to answer this question in terms of new openings. We had opened 471, new hotels throughout 2024, bringing our total number of operating hotels to 1619 by the year end at year on year increase of over $33 eight.
Simon: Percent and in 2025. This positive trend will continue we expect to maintain a similar hotel opening growth rates with our full year target of 500, new hotels. So that we can steadily advance toward our strategic goal of achieving 2000 premier hotels by 2000.
Haijun Wang: In terms of signing a contract In the first quarter of 2025, we will see that the demand in the Jiamen market is still active. We can also see that mature hotel investors generally think that compared with other investment opportunities, the hotel industry has a lot of investment potential and is a stable place. In the process of investment decision-making, the most concerned by these mature partners is the long-term value of the brand. as well as the competitive advantage of hotel products. Based on Asia's leading brand and product power, we expect that the group will continue to maintain a good relationship in 2025.
Simon: 25.
Amit Jones: Hi, Amit.
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Haijun Wang: Regarding new signings, we can see that the demand in the franchise market remains very active during Q1 of 2025. We observed that franchisees generally believe that the hotel industry still holds significant, also quite stable investment potential when compared with other investment opportunities. In their decision-making processes, those mature franchisees pay particular attention to the long-term value of brand and the competitive advantages of hotel products. We believe that based upon Atour's leading brand power and product strength, we expect our group's signings performance in 2025 to remain strong. At the same time, we believe that high-quality supply in the market We will continue to strictly control the quality of our signings, especially with the new products like Atour 4.0 and Qingju 3.0.
Speaker Change: Regarding new signings, we can see that the demand in the franchise market remains very active during Q1 of 2025.
Speaker Change: We observed that franchisees generally believed that the hotel industry is still holds significant also quite stable investment potential when compared with other investment opportunities.
Speaker Change: And their decision, making processes those mature franchisees pay particular attention to the long term value of brands and the competitive advantages of hotel product.
Speaker Change: We believe that based upon a tourist leading brand power and product trends, we expect our groups signings performance in 2025 to remain strong.
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Haijun Wang: From a long-term perspective, we will set a high standard and requirement for the selection of the first batch of projects. This way, we can better show our long-term brand value and market competitiveness.
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Haijun Wang: As you all know, our three-year strategy for this year is to have 2,000 good stores. I think while we are trying to reach 2,000 stores, we should continue to be aware of the basics of good stores, thereby assisting our brand's long-term high-quality development. Thank you.
Jonathan: And then in turn on women's Union Keytruda, when does San Antonio Center downtown.
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Speaker Change: Our two lead women Kim head up township covered on our product vision.
Sijie Lin: Meanwhile, we believe that the high-quality supply in the market still remains scarce Therefore, we will keep strict sign-in quality control, especially when represented by our new products such as Atour 4.0 and Atour Light 3.0 From the perspective of long-term brand development, we will set high standards and requirements for the site selection and property conditions of those initial projects to better showcase our long-term brand value and market competitiveness We know that we have the strategy of 2,000 premier hotels So, while we achieved the 2,000 hotels scale target this year, we will continue to solidify our foundation of premier hotels, supporting the group's long-term high-quality development Thank you Our next question comes from Sijie Lin from CICC, your line is now open.
Speaker Change: While we believe that the high quality supply in our market still remains this gas. Therefore, we will keep strip signing quality control, especially when represented by our new products such as a tour for zero and a tour like 3.0.
Speaker Change: The perspective of long term brand development, we will set high standards and the requirements for the site selection and property conditions of those initial projects to better showcase our long term brand value and market competitiveness. We know that we have the strategy of 2000 Premier hotels.
Speaker Change: While we achieved 2000 hotels scale target. This year, we will continue to solidify our foundation of Premier hotels supporting the group's long term high quality development. Thank you. Thank.
Sarah: Thank you Sarah next question please.
Speaker Change: Thank you.
Speaker Change: Our next question comes from JJ Lin from Ci Stacy Your line is now open.
Sijie Lin: Thank you, Guan Licheng. We can see that the 24-year-old retail business has continued a very strong trend of growth.
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Sijie Lin: What is your plan for the retail business in 2025? Do you have any new product plans and income goals?
Speaker Change: There are no validation going so yes.
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Speaker Change: So in totality for our retail businesses continue their strong growth momentum.
Speaker Change: So what's our plan for the retail business in 2005.
Speaker Change: And are there any plans for new product to our revenue targets. Thank you.
Haijun Wang: Thank you, Sijie.
Haijun Wang: Let me first talk about the overall plan of the retail business and the financial situation. First of all, I would like to say that we have spent a lot of effort to promote the development of the Asian planet. I think the development of the Asia-Pacific region is the Asia-Pacific region's long-term commitment to the positioning of brand groups and the natural development of the business model of our operating population. Thank you, Sijie.
Speaker Change: Although it.
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Haijun Wang: Let me first bring up our overall retail business and a product plan. Then I'll ask Tianjian to add some financial details related to retail later. Well, as we have announced in our financial report, Atour planet development is the natural outcome of Atour's long term commitment to our brand group positioning and serving people business model. In the past two years, Asia's Got Talent has made great achievements in terms of scale growth and brand visibility. However, we can see that there is still a lot of room for improvement in the whole sleep industry. Atour Planet has indeed achieved impressive results in terms of its scale growth and brand momentum.
Speaker Change: Thank you. So let me first to bring up our overall retail business and a product of plant then I'll ask Kim to add some financial details related to retail later.
Speaker Change: Well as we have announced in our financial reports a tour planet developments is the natural outcome of towards long term commitment to our brand group positioning and serving people business model.
Speaker Change: Yes.
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Speaker Change: A 12 planet has indeed achieved impressive results in terms of scale growth and brand momentum. However, we have to say that there is still substantial room for improvement across the whole industry.
Haijun Wang: However, we have to say that there's still substantial room for improvement across the whole industry. In the past 25 years, we have set higher standards for ourselves.
Speaker Change: Basically it's useful Congo, the onshore EMEA with Hong Kong of a dwarf countrywoman juggling soda even more.
Haijun Wang: We will also start with the basic skills of Asian retail from various dimensions. First of all, we will continue to strengthen our product research and development innovation and consolidate the advantages of existing products. to build the foundation of the product, and actively develop and expand new products around the categories of sleep and anti-sleep, enriching our deep sleep products, constantly releasing the ability to create high-quality products.
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Haijun Wang: In 2025, we have set higher goals for ourselves and will strengthen the core competencies of Atour's retail across all dimensions. First, we will continue to enhance product R&D and innovation, consolidate our leading position in existing categories, and build product barriers. We will also actively develop and expand new products in the sleep and tan sleep categories, enriching our deep sleep product matrix and continuously unleashing our ability to create blockbuster products. Secondly, we will continue to use our experience as a guide and adopt a higher standard in the clothing industry to create products for Asian planet retail.
Speaker Change: And 2025, we have set higher goals for ourselves and will strengthen the core competencies of our tourists retail across all dimensions.
Speaker Change: We will continue to enhance product R&D and innovation consolidate our leading position in existing categories and build product barriers. We will also actively develop and expand new product in the sleep and sleep categories enriching our deep sleep products.
Speaker Change: The matrix and continuously unleashing our ability to create blocked.
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Haijun Wang: which will lead to the improvement and innovation of the whole process technology in the hair salon industry today. The goal is to set the leading industry standards in the field of sleep, so as to promote the sustainable growth of our high-quality retail business. Secondly, we will remain user experience oriented and strive to create a 12-planet retail product by referencing a higher standard from the apparel industry so as to drive the home textile industry achieve overall improvement and innovation in its processes and technology. Thereby, we have the target of establishing a leading industry standard in the deep sleep domain and promoting high quality and sustainable growth in our retail business.
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Speaker Change: Secondly, we will remain user experience oriented and strive to create a 12 planet retail product by referencing our higher standards from the apparel industry. So as to drive the home textile industry achieve overall improvement and innovation and its processes and.
Speaker Change: Knowledgeable, thereby we have the target of establishing a leading industry standards in the deep sleep domain and promoting high quality and a sustainable growth in our retail business.
Haijun Wang: In terms of retail income, in 2024, our retail income accounted for 30% of our total revenue, which has become an important engine for our group's business growth. Looking ahead to 2025, as we continue to release our best products, as well as the promotion of new products and the motivation to release growth, we believe that the income of retail business will continue to exceed that of our residential business. It is expected that our retail income will increase by 35% in 2025. In terms of the revenue of retail business, it contributed 30% to our group's revenue in 2024, becoming a significant engine for the group's business growth.
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Speaker Change: In terms of the revenue of retail business.
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Haijun Wang: Looking into the full year 2025, with the continued scaling of dominant categories and the growth momentum from our new product matrix, we believe the retail business is expected to again outpace our hotel businesses in year-on-year revenue growth. We expect retail revenue to grow by no less than 35% year-on-year in 2025.
Speaker Change: Looking into the full year 2025, with the continued scaling of dominance categories and the growth momentum from our new product matrix. We believe the retail business is expected to again outpace our hotel business is in year.
Speaker Change: Year on year revenue growth, we expect retail revenue to grow by no less than 35% year on year in 2025.
Operator: 好的,谢谢 Okay, thank you 谢谢 Thank you Thank you, Sijie.
Speaker Change: Thank you.
Operator: Next question, please. Thank you.
Speaker Change: Thank you next question please.
Speaker Change: Thank you.
Lydia Lin: Our next question comes from Lydia Lin from Citi.
Speaker Change: Our next question comes from Lydia <unk> from Citi. Your line is now open.
Lydia Lin: Your line is now open. I want to follow up on the margin for size. And so, firstly, with the rise of the retail business, so how do you look like the margin trend for 2025? And also, especially for the retail business, what could be the margin trend for this year?
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Speaker Change: Two questions.
Speaker Change: Thank you Jeff.
Speaker Change: Yes.
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Speaker Change: How quickly that market. Thank you.
Jianfeng Wu: Thank you. Okay, thank you, Lydia. In 2024, we achieved an adjusted net profit margin of approximately 18% for the full year, a decrease of 1.4 percentage points compared to 2023. This was mainly due to the fluctuations in REF PAR throughout the year and structural factors such as the increased proportion of our retail business. For 2025, although we know that the changes in companies' revenue structure will continue, so we will also optimize our cost structure, improve our management efficiency to offset the impact on structural profit margins, we anticipate that the adjusted net profit margin will remain relatively stable.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay. Thank you Lydia.
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Speaker Change: And 2024, we achieved an adjusted net profit margin of approximately 18% for the full year, a decrease of one four percentage points compared to 2023.
Speaker Change: Mainly due to the fluctuations in revpar throughout the year and the structural factors such as the increased proportion of our retail business for 2025, although we know that the changes in the company's revenue structure will continue so we will also optimize our cost structure.
Speaker Change: To improve our management efficiency to offset the impact on our structural profit margins, we anticipate that the adjusted net profit margin will remain relatively stable.
Jianfeng Wu: In terms of retail sales, in 2024, the operating profit rate of retail sales has increased to a low-double-digit level In the future, as retail sales continue to grow, we will continue to invest in retail sales We expect that the operating profit rate of retail sales in 2025 will remain at a similar level In addition to continuously improving the efficiency of our channel investment, we will continue to strengthen the construction of our brand More importantly, we will consolidate the assets of our Asian planet brand In 2024, the operating profit margin of our retail business increased to low double digits.
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Speaker Change: In 2020 for the operating profit margin of our retail business increased at a low double digits and moving forward as our retail scale continues to expand we will maintain a certain level of marketing expenditure we.
Jianfeng Wu: And moving forward, as our retail scale continues to expand, we will maintain a certain level of marketing expenditure. We expect the operating profit margin of the retail business to remain at the similar level in 2025. In terms of the marketing strategy, we will continuously improve the efficiency of channel distribution to strengthen our brand building and more importantly, solidify our brand equity of Atour planet.
Speaker Change: We expect the operating profit margin of the retail business to remain at the similar level in 2025 in terms of the marketing strategy.
Speaker Change: We will continuously improve the efficiency of channel distribution to strengthen our brand building and more importantly, solidify our brand equity to our planet.
Jianfeng Wu: Thank you.
Operator: Thank you, Lydia.
Speaker Change: Thank you.
Operator: Next question, please. Thank you.
Speaker Change: Thank you next question please.
Xin Chen: Our next question comes from Xin Chen from UBS. Your line is now open. Thank you, Mr. Ye and Mr. Jianfeng, for giving me the opportunity to ask this question. I am very happy to see that our 4-liter performance meets the expectations of the market.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Sheng Chen from UBS. Your line is now open.
Speaker Change: Okay.
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Xin Chen: My question is about our hotel. We have seen that SAHA's first store has already opened. I would like to ask about the main development direction of high-end brands in the management layer this year. Second, I would like to ask, for example, how is the recent performance of Qingju 3.0? Does it meet the expectations of the management layer? Let me translate it to English. This is Xin from UBS. We noticed that the first SAHA store has already opened. Could the management share the main strategy for the high-end brand this year? Additionally, how is Atour Lite 3.0's recent performance, and does it meet management expectations?
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Haijun Wang: Thank you. Thank you, Chen Xin.
Haijun Wang: I will now share the situation of Gordon's brand. Thanks, Chengxin. And let me first address your question regarding upper scale mock Currently, our two high-end hotel brands, Yardoys and Sahe, are developing together. Among them, ADOIS meets the needs of the current market. With its precise market positioning and excellent service quality, it has won the admiration of high-end commodity consumers. Of course, we will also promote the upgrade of ADOIS. Currently, we are also actively preparing for the new version. In this way, we can maintain the competitiveness of our brand in the market and the popularity of our brand.
Speaker Change: Good.
Speaker Change: Okay. Thank you thanks, Aaron Gordon.
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Speaker Change: Thanks, Tracy and let me first address your question regarding upper scale markets.
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Haijun Wang: Thanks, Chengxin. And currently, our two upscale hotel brands, Atour S and Sahe Hotel, are developing in parallel. Among them, Atour S has won the favor of high-end business travelers by adapting to the contemporary needs, leveraging its precise market positioning and exceptional service quality. Of course, we will also promote the iterative upgrade of Atour S, and we are actively preparing a new version to maintain its competitiveness and brand vitality in the market. As for SAHA, we will continue to develop the brand with the mentality of long-termism. We strive to lead China's high-end hotel market with this brand.
Speaker Change: Thanks, Tracy and currently our two upscale hotel brand a tour S and Issaquah hotel are developing in parallel.
Speaker Change: All of them are tour S has won the favor of high end business travelers by adapting to the contemporary leveraging its precise market positioning and exceptional service quality of course, we will also promote the iterative upgrade of a towards us and we are actively preparing.
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Haijun Wang: We will carefully create standards for the quality and experience of each Shanghai hotel.
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Haijun Wang: 今年二月,我们第一家的萨盒酒店是落地在上海的北外滩 Since its opening, many customers have benefited from our engineered service, appropriate price and recognized quality in the market and by the customers. As for Saha, we continued to adopt a long-term mindset in our strategy, aiming to lead the development direction of China's upscale hotel market. We will meticulously craft each Sahe hotel to establish a flagship for quality and experience In February this year, our first Sahe hotel opened in Shanghai's northbound Since its trial operation, its advanced experiential services such as Sahe butlers and the room diffuser selection before checking in have received high praise from consumers and its pricing and positioning have also been well received by the market and customers Let me add on to the situation of Qingju 3.0 The development progress of Qingju 3.0 has always been more in line with our expectations By the end of 2024, we have deployed more than 100 Qingju 3.0 hotels in 46 cities across the country The operation has been very good and has greatly enhanced investors' confidence Qingju 3.0 is a new brand It needs constant polishing and accumulation while expanding rapidly We will also continue to receive feedback from consumers and partners We will continue to enhance our brand by providing products and optimizing operations Currently, we are opening more than 100 Qingju 3.0 hotels in Guangdong They are mainly located in the core shopping malls of second-tier and above cities And then let me add something on Atour Light 3.0.
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Haijun Wang: The development trajectory of Atour Light consistently aligned with our expectations. As of the end of 2024, we have expanded to over 100 Atour Light 3.0 hotels in 46 cities across the country, with strong operational performance that has significantly boosted the confidence of investment from the franchisees. As a new brand, Atour Light 3.0 requires accumulation and continuous refinement while rapidly expanding. We are now consistently incorporating feedback from consumers and franchisees, enhancing our brand strength through product iterations and refined operations. Currently, we have over 100 Atour Light hotels in our pipeline, primarily located in core business districts of second tier and above cities.
Speaker Change: The development trajectory as our Twilight consistently aligned with our expectations as of the end of 2024, we have expanded to over 100, a tour like three zero hotels in 46 cities across the country with strong operational performance that has significantly boosted the comfort.
Speaker Change: So the investments from the franchisees as a new bread toilet three zero requires accumulation and continuous refinement while rapidly expanding.
Speaker Change: We are now consistently incorporating feedback from consumers and franchisees enhancing our brand strength through product iterations and to refine operations. Currently we have over 112 <unk> hotels in our pipeline primarily located in core business districts of second nature.
Haijun Wang: Thank you. Thank you, Xin Xin.
Speaker Change: And above cities.
Speaker Change: Thank you.
Operator: Next question, please. Thank you.
Speaker Change: Thank you next question.
Speaker Change: Okay.
Ronald Leung: Our last question comes from the line of Ronald Leung from Bank of America, your line is now open. Good evening, Manager Chen. Thank you for giving me the opportunity to ask questions. My question is, what is the company's plan for closing shop for the entire year in 2025? In addition, what new plans does the company shareholder report for this year? Let me translate my question into English. Could you share the plans for hotel closures planned through 2025? Additionally, are there any new plans for shareholder return this year? Thank you very much.
Speaker Change: Thank you.
Speaker Change: Our last question comes from the line of Ronald Leung from Bank of America. Your line is now open.
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Speaker Change: Could you share the plans for a hotel closest plans throughout 225.
Speaker Change: Additionally are there any new paths for shareholder returns. This year. Thank you very much.
Haijun Wang: 好,谢谢大家 Thank you everyone Thank you, Ronald, for your question. A key consideration in our decisions of hotel closures is the consistency of experience. We aim at achieving the strategic goal of Chinese-experienced 2,000 premier hotels by the end of 2025. Therefore, we will maintain a similar pace of closures in 2025, continuing to strengthen the centralized evaluation of the property quality and operational performance of our hotels in operation. For hotels that still fail to meet operational performance expectations after rectification in areas such as services and customer experiences, we will proactively terminate contracts with them in accordance with the agreement.
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Speaker Change: Thank you Ron for your question.
Speaker Change: Key consideration in our positions of hotel closures is the consistency of experiences.
Speaker Change: We aim at achieving our strategic goal of Chinese experienced 2000 Premier hotels by the end of 2025. Therefore, we will maintain a similar pace of closures in 2025, continuing to strengthen with centralized the evaluation of the property quality and operational performance of our hotel.
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Speaker Change: Hotels that still fail to meet operational performance expectations. After rectification in areas, such as services and customer experiences, we will proactively terminate contracts with them in accordance with the agreement.
Haijun Wang: In terms of shareholder returns, we have always given great importance to and will continue to carry out the promise of continued shareholder returns. In August last year, we officially announced a three-year dividend plan. It is clear that within these three years, the annual accumulated sales amount will not be less than 50% of last year's net profit. Last year, our dividend amount was about $62 million. This year, we will also consider the overall business situation of the company, the future business development of the company, and other factors to decide our specific dividend time and dividend ratio.
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Haijun Wang: We will continue to give good returns to our major shareholders and share the results of our company's development with everyone. Regarding shareholder returns, we have always placed great emphasis on and actively fulfilled our commitment to sustained returns for shareholders. In August of last year, we officially announced a three-year annual dividend plan, clearly committing to distribute an annual dividend of no less than 50% of the previous financial year's net income over these three years. Last year, our dividend payout amount is around 62 million U.S. dollars. In 2025, we will continue to comprehensively consider our company's overall operations, cash reserves, and future business developments comprehensively to make integrated decisions on the timing and proportion of dividends, ensuring that our shareholders continue to share in the company's growth.
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Speaker Change: Regarding shareholder returns, we have always placed great emphasis on and actively fulfilled our commitment to sustained returns for shareholders.
In August of last year, we officially announced a three year annual dividend plan clearly committing to distribute an annual dividend of no less than 50% of the previous financial years net income over these three years.
Speaker Change: Last year, our dividend payout amount is around $62 million in 2025, we will continue to comprehensively consider our company's overall operations cash reserves at a future business developments comprehensively to make integrated positions on the timing and.
Speaker Change: The proportion of dividends, ensuring that our shareholders continue to share in the company's growth. Thank you.
Operator: Thank you. Thank you everyone. Thank you.
Speaker Change: Thank you Ronald.
Luke Hu: That concludes today's question and answer session.
Speaker Change: Thank you that concludes today's question and answer session I would now like to turn the conference back to Mr. Lynch.
Luke Hu: I would now like to turn the conference back to Mr Luke Hu for any additional or closing comments. Thank you for joining us today. If you have any further questions, please feel free to contact our IR team. We look forward to speaking with you again next quarter.
Speaker Change: For any additional or closing comments. Thank you.
Speaker Change: Thank you for joining us today, if you have any further questions feel free to contact our IR team. We look forward to speaking with you again next quarter, Thank you and goodbye.
Operator: Thank you and goodbye.
Operator: This concludes today's conference call. Thank you for participating.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
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