Q2 2025 H World Group Ltd Earnings Call

Have a listen only mode.

After the speaker's presentation, there will be a question and answer session.

To ask a question. During this session you will need to press star one one on your telephone you will then have an automated message advising Johan just raised to withdraw your question. Please press star one one again.

Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Jason Chen. Please go ahead.

Thank you Heidi.

And good evening, everyone. Thanks for joining us today welcome to <unk> Group 2025 second quarter earnings Conference call.

Speaker #1: After the speakers' presentation, there will be a question and answer session. To ask a question during this session, you will need to press star one, one on your telephone, you will then hear an automated message advising your hand is raised.

Joining us today is our founder and chairman Mr Chi Chi.

Our CEO, Mr. Jean Cui, our CFO, Mr Wei and our CSO misquotes equal.

Speaker #1: To withdraw your question, please press star, one, one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jason Chen.

Following their prepared remarks management will be available to answer your questions. Before we continue. Please note that the discussion today will include forward looking statements made under the safe Harbor provision of the United States Private Securities Litigation Reform Act of 1995.

Speaker #1: Please go ahead.

Heidi: Thank you, Heidi. Good morning and good evening, everyone. Thanks for joining us today. Welcome to H World Group 2025 second quarter earnings conference call. Joining us today are our Founder and Chairman, Mr. Qi Ji, our CEO, Mr. Hui Jin, our CFO, Ms. Chenhui, and our CSO, Ms. Jihong He. Following their prepared remarks, management will be available to answer your questions. Before we continue, please note that the discussion today will include forward-looking statements made under the safe harbor provision of the United States Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. H World Group does not undertake any obligations to update any forward-looking statements except as required under applicable laws.

Speaker #2: Thank you, Heidi. Good morning and good evening, everyone. Thanks for joining us today. Welcome to H World Group 2025, second quarter earnings conference call.

Forward looking statements involve inherent risks and uncertainties as such our results may be materially different from the views expressed today.

Speaker #2: Joining us today is our founder and chairman, Mr. Jichi; our CEO, Mr. Jinhui; our CFO, Ms. Chen Hui; and our CSO, Ms. Hui Jihong.

A number of potential risks and uncertainties are outlined in our public filings with the SEC.

<unk> group does not undertake any obligations to update any forward looking statements, except as required under applicable laws.

Speaker #2: Following their prepared remarks, management will be available to answer your questions. Before we continue, please note that the discussion today will include forward-looking statements made under the Safe Harbor provision of the United States Private Securities Litigation Reform Act of 1995.

On the call today, we will also mention adjusted financial measures during the discussion of our performance reconciliations of those measures to comparable GAAP information can be found in our earnings release that was distributed early today.

Speaker #2: Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC.

As a reminder, this call.

Or is being recorded.

Cost of this conference call as well as supplementary slide presentation is available at IR Dot <unk> dot com with that now I will hand over the call to our CEO, Mr. Jim <unk> to discuss our business performance in the second quarter of 2025, Mr. Jing. Please.

Speaker #2: H World Group does not undertake any obligations to update any forward-looking statements except as required by applicable laws. On the call today, we will also mention adjusted financial measures during the discussion of our performance.

Heidi: On the call today, we will also mention adjusted financial measures during the discussion of our performance. Reconciliations of those measures to comparable GAAP information can be found in our earnings release that was distributed early today. As a reminder, this conference call is being recorded. The content of this conference call, as well as a supplementary slide presentation, is available at ir.hworld.com. With that, now I will hand over the call to our CEO, Mr. Hui Jin, to discuss our business performance in the second quarter of 2025. Mr. Jin, please.

Does it go ahead.

I'm going to use with agile consider digest and Yahoo, Japan.

Speaker #2: Reconciliations of those measures to comparable gap information can be found in our earnings release that was distributed early today. As a reminder, this conference call is being recorded.

DRG to.

So as you only have ranges infringe on sharpie and pieces on at one time.

Susana she's Permian so in.

When you go to Hong Kong, So the Orleans, and so would you could you kind of some global and Ethernet switching Suzhou <unk> syndrome.

Speaker #2: Cost of this conference call, as well as supplementary slide presentation, is available at ir.hworld.com. With that, now I will hand over the call to our CEO, Mr. Jinhui, to discuss our business performance in the second quarter of 2025.

That answer your question <unk> sequence equal Hudson's yet.

Because we're going to be some switching shelving for you in the range of <unk> 20, higher yen translation towards it.

Speaker #2: Mr. Jin, please.

Hui Jin: 2025年第二季度业绩电话会. 首先, 我想分享一下对于整体市场的观察. 市场需求方面, 从中国铁路、航空、出游人次等数据可以看到, 中国国内整体出行需求依然保持了相对稳定的增长, 但同时由于过去两年酒店市场整体供给过快增加, 叠加各种宏观因素对商务出行和消费者支付意愿的负面影响, 整体行业依然存在一些挑战. Dear investors and analysts, good day. Thank you for joining our second quarter 2025 earnings conference call. First, I'd like to share some observations on the overall market. On the demand side, the domestic number of travelers continues to grow steadily according to the data released from railways, airlines, and tourism statistics. However, due to the rapid increase in hotel supply over the past two years, coupled with the negative impacts of various macro factors on business traveling and consumer spending wellness, the hotel industry is still facing some challenges. 但是, 即便在当前的市场情况下, H World Group Limited 始终坚持长期主义, 强化高质量发展, 快速抢占核心城市核心位置, 持续深耕下沉市场, 优化存量门店质量和布点. 二季度, H World Group Limited 通过各区域的不断突破以及低线城市的不断渗透, 实现了又一季度的高质量网络扩张. 在银房量同比增加18.3%的驱动下, 集团酒店 GMV 同比增长15%至 RMB 26.9亿元. 同时, 随着网络布局的逐步完善以及 H Rewards 能力的进一步重构, H World Group Limited 的会员规模及会员预订间夜量持续增长. 二季度, 会员数量同比增加17.5%至2.9亿, 会员预订间夜量超6,000万间夜, 同比提升28.8%.

Speaker #3: Appreciate it.各位投资人分析师, 大家好。感谢大家参加华助集团2025年第二季度业绩电话会。首先我想分享一下对于整体市场的观察。市场需求方面, 从中国铁路航空出游人次等数据可以看到, 中国国内整体出行需求依然保持了相对稳定的增长。但同时由于过去两年酒店市场整体供给过快增加, 叠加各种宏观因素对商务出行和消费者支付意愿的负面影响, 整体行业依然存在一些挑战。Dear investors and analysts, good day, thank you for joining our second quarter 2025 earnings conference call. First, I'd like to share some observations on the overall market.

Dear investors and analysts good day. Thank you for joining our second quarter 2025 earnings conference call.

First I'd like to share some observations on the overall market on the demand side domestic number of travelers continues to grow steadily. According to the data released from Railways Airlines and tourism statistics, However, due to the rapid increase in hotel supply over the past two years.

Coped with the negative impacts of various macro factors on business traveling and the consumer spending willingness the hotel industry is still facing some challenges.

She brings a downturn Susanna Marsha <unk> chunghwa caused an adviser clients, which rounds out <unk> Cushing woods.

Some ghansham this is Tom.

Speaker #3: On the demand side, domestic number of travelers continues to grow steadily according to the data released from Railways Airlines and the Tourism Statistics. However, due to the rapid increase in hotel supply over the past two years, coupled with the negative impacts of various macro factors on business traveling and consumer spending wellness, the hotel industry is still facing some challenges.

Hard to know my Indians, who put it.

All right you too.

With Honeywell good shoe that put <unk> into the production tool <unk> to the call today.

Same vania Tobey ginger revenues by the incentive Chileans yet.

Time to <unk>.

Yeah <unk>.

Poses either one hope would you there are two big ones that geological intermediate team boots on the go <unk> G <unk>.

Speaker #3: ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? 18.3% ????????? GMV ???? 15%?? 269 ?????????????????????????????????????????????????????????????? 17.5% ? 2.9 ?????????? 6000 ???????? 28.8%?Despite the current challenging market conditions, we remain committed to focus on the long-term business development.

Jay.

So Houston job RGD.

<unk> and <unk> two.

I think Joey.

18, GNL saw no.

<unk> Chamber engineer <unk> filings, our suburbia and Bob.

Despite the current challenging market conditions, we remain committed to focus on the long term business development.

<unk> on high quality growth occurring in prime locations in the major cities further deepening our presence in the lower tier cities and optimizing the location and the quality of our existing hotels in the second quarter by breaking through into more new cities in the regions and further penetrating into the lower tier cities.

We achieved another quarter of high quality network expansion.

Driven by an 18, 3% year over year increase in the number of rooms in operation.

Hui Jin: Despite the current challenging market conditions, we remain committed to focus on the long-term business development, emphasizing on high-quality growth, securing prime locations in the major cities, further deepening our presence in the lower-tier cities, and optimizing the location and quality of our existing hotels. In the second quarter, by breaking through into more new cities and regions and further penetrating into the lower-tier cities, we achieved another quarter of high-quality network expansion. Driven by an 18.3% year-over-year increase in the number of rooms in operation, our group hotel GMV grew by 15% year-over-year to RMB 26.9 billion. Meanwhile, along with our hotel network expansion and continuous enhancements of our H Rewards membership program, our member base also grew by 17.5% year-over-year to nearly 290 million in the second quarter, while the number of room nights booked by members exceeded 60 million nights, representing a 28.8% year-over-year growth. 更为重要的是, 集团轻资产的加盟业务无论在规模、收入还是利润上均实现了强劲的增长.

Our hotel our group hotel <unk> grew by 15% year over year to RMB $26 9 billion.

Speaker #3: Emphasizing on high-quality growth, securing prime locations in the major cities, further deepening our presence in the lower-tier cities, and optimizing the location and quality of our existing hotels.

Meanwhile, along with our hotel network expansion and continuous enhancements of our etch rewards membership program. Our member base also grew by 17, 5% year over year to nearly $290 million in the second quarter, while the number of room nights booked by members exceeded $60 million.

Speaker #3: In the second quarter, by breaking through into more new cities and regions and further penetrating into the lower-tier cities, we achieved another quarter of high-quality network expansion.

Night, representing 20.

28, 8% year over year growth.

Speaker #3: Driven by an 18.3% year-over-year increase in the number of rooms in operation, our group hotel GMV grew by 15% year-over-year to RMB 26.9 billion.

All of us.

Design changes in the German you Lindsay I agree more so disappearance of genes to Jim a challenging isn't done.

As you too Jonathan So <unk> filings archive and bought <unk> gene Molly <unk> are behind Us and there are two <unk>.

Speaker #3: Meanwhile, along with our hotel network expansion and continuous enhancements of our H Rewards membership program, our member base also grew by 17.5% year-over-year to nearly 290 million in the second quarter.

<unk> are a few times NTT module.

More importantly, our SLI monetized in the franchise the business delivered robust growth in hotel network revenue and profit.

Speaker #3: While the number of room nights booked by members exceeded 60 million nights, representing a 28.8% year-over-year growth. 各位重要的是, 集团轻资产的加盟业务, 无论在规模、收入还是利润上, 均实现了强劲的增长。二季度, 加盟收入同比提升22.8%至29亿元, 经营毛利同比增长23.2%至19亿元, 贡献了近三分之二集团整体经营毛利。 More importantly, our asset line monetized and franchised the business delivered in the past to growth in hotel network, revenue, and profit.

<unk> revenue Rose 22, 8% year over year to RMB, two 9 billion in the second quarter, while its gross operating profit increased by 23, 2% year over year to RMB, one 9 billion contributing nearly two thirds of the group's total gross operating profit.

Hui Jin: 二季度, 加盟收入同比提升22.8%至 RMB 2.9亿元, 经营毛利同比增长23.2%至 RMB 1.9亿元, 贡献了近2/3集团整体经营毛利. More importantly, our asset-light managed and franchised business delivered robust growth in hotel network revenue and profit. M&F revenue rose 22.8% year-over-year to RMB 2.9 billion in the second quarter, while its gross operating profit increased by 23.2% year-over-year to RMB 1.9 billion, contributing nearly two-thirds of the group's total gross operating profit. Macro uncertainties and weakened consumer spending wellness should have more pronounced impacts on the high-end consumption. H World remains steadfast in our strategic focus on the economy and the midscale segments to serve the mass market. Against the backdrop of consumers favoring value-for-money products and services, H World is well-positioned to demonstrate even stronger competitive advantages. By enhancing our brands, optimizing and upgrading our products, and improving our services, we will further solidify our core competitiveness, earn long-term customers' loyalty, and achieve resilience while navigating through cycles.

Won the pretreatment machine surveys.

So for you in <unk>.

Switching to.

<unk> heard some of the onshore Cushing for thousands of us understand that.

So it's always a <unk> passu.

Speaker #3: M&F revenue rose 22.8% year-over-year to RMB 2.9 billion in the second quarter, while its growth operating profit increased by 23.2% year-over-year to RMB 1.9 billion, contributing nearly two-thirds of the group's total growth operating profit.

Yeah.

Ghansham youll, either tingling homeworking managing timed in the Europe, Heartless and G. <unk> harnesses Cardinale Kirkwood, a Canadian club here in China, So, which he doesn't know.

Macro uncertainties and weakened consumer spending well and this should have more pronounced impact on the high end consumption.

Speaker #3: 宏观的不确定性、消费者意愿、支付意愿的下降对高端消费的影响更为显著。华助始终保持以经济型和中档酒店为核心服务大众市场的战略并未不变。在消费者追求极致性价比的大背景下, 华助应当展现更强有力的竞争优势。通过品牌的建设、产品的优化和升级, 以及服务的提升进一步夯实核心竞争力, 赢得客户的长期认可, 实现穿越周期的能力。Macro uncertainties and weakened consumer spending wellness should have more pronounced impacts on the high-end consumption. H Rewards remains steadfast in our strategic focus on the economy and the middle-scale segments to serve the mass market.

Edge or remains steadfast in our strategic focus on the economy in the middle scale segment to serve the mass market.

Against the backdrop of consumers favoring value for money products and services <unk> is well positioned to demonstrate even stronger competition competitive advantages by.

By enhancing our brands optimizing and upgrading our products and improving our services. We will further solidify our core competitiveness and long term customer loyalty and achieve resilience, while navigating through cycles.

<unk> seen the argument about that.

In the Huntington Beach hotels.

<unk> gone through that change or tacos.

<unk> on the Basel Sandwich range of funding I'll tell you that it doesn't mean that.

Speaker #3: Against the backdrop of consumers favoring value-for-money products and the services, H Rewards is well-positioned to demonstrate even stronger competitive advantages. By enhancing our brand, optimizing and upgrading our products, and improving our services, we will further solidify our core competitiveness, earn long-term customers' loyalty, and achieve resilience while navigating through cycles.

So the Union will go on in Egypt during the daytime game changing synergy for Johan <unk> timing.

Men's which relate to the future.

<unk> momentum is a firewall a hunting scaling bandwidth.

The environment, the hunting putting in synergy in Venice, Hemmingsen G concerta in the grilling season.

Hum soldier content <unk> she didn't.

Hui Jin: We are delighted that after 20 years of development, our HanTing Hotel brand ranked number one on the latest Hotels Magazine's World's Top 50 Hotel Brands list, becoming the world's largest hotel brand by room count. However, we believe this is just the beginning, and we continue to refine and upgrade our product to improve product quality and to better meet customers' demand. Recently, we officially launched HanTing 4.0 version. This is not just a simple product upgrade, but a revolutionary supply chain reform. Through systematic optimization across CapEx construction, maintenance, and operations, we have successfully developed a benchmark product with lower cost, higher quality, and greater efficiency. HanTing Hotel will serve as a key driver for our further penetration into the lower-tier cities. HanTing Hotel has undoubtedly become the leading hotel brands in the economy segment, while JI Hotel has been losing the midscale segment.

Speaker #3: 我们很高兴地看到, 在经历20年的发展, 我们的汉庭品牌在Hotels杂志最新公布的全球Top 50酒店品牌排行中荣登榜首, 成为全球房量最大的酒店品牌。在我们认为这远远不够, 我们依旧不断地对产品进行升级和优化, 以提高产品质量, 满足消费者的需求。最近我们正式发布了汉庭4.0版本, 4.0版本的汉庭不仅仅是简单的产品升级, 更是革命性的供应链升级。我们通过造价、工程、维保及运营的全链路系统化优化, 成功打造出造价更低、品质更高、效率更优的标杆产品。汉庭将成为华助进一步深耕中国、布局下沉市场的核心利器。We are delighted that after 20 years of development, our Han Ting brand ranked at number one on the latest hotels magazines, world's top 50 hotel brands list, becoming the world's largest hotel brand by room count.

Single cell.

Jack in the teens, who can go show you continue that bill F&B hunting, John Someway causal chain boosting reasonable produced short answers on the beach.

We are delighted that after 20 years of development, our hunting brand ranked at number one on the latest the hotel's magazines Ward's top 50 hotel brands list, becoming the world's largest hotel brand by room called However, we believe this is just at the beginning and we continue to refine and.

Upgrade our product to improve product quality and to better meet customers' demand.

Recently, we officially launched hunting 4.0 version.

This is not just simple product upgrades, but a revolutionary supply chain report.

Through systematic optimization across capex construction maintenance and operations, we have successfully developed at our benchmark products with lower cost higher quality and greater efficiency.

Hunting will serve as a key driver for our further penetration into the lower tier cities.

Speaker #3: However, we believe this is just the beginning, and we continue to refine and upgrade our product to improve product quality and to better meet customers' demand.

How you are in some way.

Change is sundar.

Yes.

<unk>.

Speaker #3: Recently, we officially launched Han Ting 4.0 version. This is not just a simple product upgrade, but a revolutionary supply chain reform. Through systematic optimization across capex, construction, maintenance, and operations, we have successfully developed it into a benchmark product with lower cost, higher quality, and greater efficiency.

Gentlemen, boom goes into kind of <unk>.

<unk> core E change either do something.

We are hiring and the timing be.

Sorry <unk>.

Due to Genco as we did in some real quadruped sundar to audiences on the Trs and nitrogen.

Look the Hunton Shinji Jujitsu center using routine handover phase.

Based on challenging you can really see bondswoman, Suzanne chimps, and when their audience and removal of the closings frequently.

Speaker #3: Han Ting will serve as a key driver for our further penetration into the lower-tier cities. Han Ting???????????????, ???????????????????????????, ??????????????, ?1000????????????????, ??????????, ???????????????????????????, ?????????????????????, ??????????, ???????????2.0????????????? Hotel has undoubtedly become the leading hotel brand in the economy segment, while G Hotel has been leading the middle-scale segment.

Hunting hotel has undoubtedly become the leading hotel brands in the economy segment, while G Hotel has been using.

The middle scale segment. Nevertheless, we are more excited to see our Orange Hotel recently, surpassing the 1000 hotels milestone.

With its industry, leading products cost cost competitiveness and operational capabilities Orange hotel is well positioned to become our second growth engine in the middle scale segment.

Together hunting GE and Orange from the Golden Triangle brands of our limited service segment demonstrate formidable competitiveness and serve as the core driver to reach our two hotels in 2000 cities strategic targets in midterm.

Hui Jin: Nevertheless, we are more excited to see our Orange Hotel recently surpassing the 1,000 hotels milestone with its industry-leading products, cost competitiveness, and operational capabilities. Orange Hotel is well-positioned to become our second growth engine in the midscale segment. Together, HanTing, JI, and Orange form the golden triangle brands of our limited service segment, demonstrating a formidable competitiveness and serving as the core driver to reach our 20,000 hotels in 2,000 cities' strategic target in midterm. At the same time, H World has made rapid breakthroughs in the upper-midscale segment. As of the second quarter, the number of upper-midscale hotels in operation and in pipeline exceeded 1,500, up 23.3% year over year. In particular, our IntercityHotel has been rapidly gaining traction among both franchisees and consumers and achieving remarkable growth in the recent quarters, thanks to its clear brand positioning, exceptional product quality, and strong operational performance.

Speaker #3: Nevertheless, we are more excited to see our orange hotel recently surpassing the 1,000 hotels milestone. With its industry-leading products, cost competitiveness, and operational capabilities, orange hotel is well positioned to become our second growth engine in the middle-scale segment.

This is answer the hardwood.

Some other asset values is quite visible.

Even more savings you quite dominated haynesville down.

<unk>, he chuang Badger <unk> filings.

Yohji assortment thats anything that can be a change.

<unk> been working with through the time influences.

Speaker #3: Together, Han Ting, G, and Orange form the golden triangle brands of our limited service segment, demonstrating formidable competitiveness and serving as the core driver to reach our 20,000 hotels in 2,000 cities strategic target in the midterm.

Sure Jim Garcia, some clients, who are the dominant some conservative assumptions in that.

And as a coach you introduced a freeze on price with the tender.

Two <unk> <unk>.

Speaker #3: 与此同时, 华助在中高端赛道也实现了快速突破, 截止二季度末, 华助再营及管道内的中高端门店数量已突破1500家, 同比增长23.3%。尤其是我们的成绩品牌, 凭借清晰的品牌定位、卓越的产品品质和优秀的经营表现, 正快速获得加盟商和消费者的双重青睐, 可以看到成绩在过去几个季度实现了非常快速的增长。二季度, 成绩品牌更是实现了成熟门店real part的同比增长。At the same time, H Rewards has made rapid breakthroughs in the upper-mid-scale segment. As of the second quarter, the number of upper-mid-scale hotels in operation and in pipeline exceeded 1500, up 23.3% year-over-year.

At the same time as to what has made rapid breakthroughs in the upper mid scale segment.

As of the second quarter, the number of upper mid scale hotels in operation and in pipeline exceeded 1500 up 23, 3% year over year in.

In particular, our intercity hotel has been rapidly gaining traction among both franchisees and consumers and achieving remarkable grosses in the recent quarters. Thanks to its clear brand positioning exceptional product quality and a strong operational performance.

In the second quarter Intercity achieved a positive year over year growth in at same hotel Revpar.

What are you seeing full houses to managing time payments as Johan <unk> challenged article Union leaders is almost is the only one we're going in and we support on the call today.

So Neil <unk>.

Speaker #3: In particular, our intercity hotel has been rapidly gaining traction among both franchisees and consumers, achieving remarkable growth rates in the recent quarters. Thanks to its clear brand positioning, exceptional product quality, and strong operational performance, in the second quarter, intercity achieved a positive year-over-year growth in its same hotel RevPAR.

Puzzled returned to <unk> from <unk>.

Sinjar module volume Youll have timing Citibank, Phoniness cologuard sit down the timing Couldnt leader.

In June.

You can learn English sheep Ponzi achievable hansel according to the leasing season.

Hui Jin: In the second quarter, IntercityHotel achieved a positive year-over-year growth in its RevPAR. Whether it's the limited service or the upper-midscale segment, continuous product optimization and upgrades rely on strong supply chain capabilities. We firmly believe that supply chain strength is a critical pillar of high-quality development. Therefore, we continue to innovate and optimize our supply chain through enlarging our supplier pool, strengthening modular applications, and optimizing product design to achieve higher product quality, lower OpEx and CapEx, and a shorter construction period, which is in turn further strengthening our core competitiveness. Lastly, we remain focused on our direct sales capability through H Rewards membership program. Our membership and direct sales are vital to our sustainable long-term business growth. As we expand our hotel network and enter more new cities, our membership base continues to grow.

Whether it's the limited service or the upper mid scale segment continuously product optimization and upgrades relies on strong supply chain capabilities, we firmly believe that supply chain strengths as a critical pillar of high quality development. Therefore, we continue to innovate and optimize our supply.

Speaker #3: 无论是有限服务还是中端的酒店, 产品的持续优化和迭代升级离不开强大的供应链能力的支持。我们始终认为供应链能力是保障高质量发展的重要核心能力之一。因此, 华助不断地对供应链进行优化和创新, 通过扩大供应伙伴、增加模组化应用、优化产品设计等方面实现更高质量的产品, 更低的运营件和运营成本, 以及更短的营建工期, 同时也进一步夯实了公司的核心竞争力。Whether it's the limited service or the upper-mid-scale segment, continuously product optimization and upgrades rely on strong supply chain capabilities.

Through enlarging our supplier pool, strengthening module applications and optimizing product design to achieve higher product quality, lower opex and capex and a shorter construction period, which is in turn further strengthening our core competitiveness.

Sure.

Almost its own GNC hartzell.

<unk> <unk>.

<unk> Xian and he sits in sequence of the yield tongue in cheek because as your partners.

Speaker #3: We firmly believe that supply chain strength is the critical pillar of high-quality development. Therefore, we continue to innovate and optimize our supply chain by enlarging our supplier pool, strengthening modular applications, and optimizing product design to achieve higher product quality, lower OPEX and CAPEX, and a shorter construction period, which, in turn, further strengthens our core competitiveness.

So these are all mini and of course, our conditions of the team for a minute.

<unk>.

As you do more plausible.

<unk>.

Module to me young within Chicago, Schinder 10 year now attempting to up I mean, it was holding.

<unk> <unk> <unk>.

TG <unk> <unk> Goldman <unk> Shang will continue with that.

Speaker #3: 最后, 在营销方面, 我们始终坚持以华助会为核心, 会员体系及直销能力是支持公司业务长期可持续发展的重要核心能力。随着我们门店的扩张和更多城市的进入, 我们的会员数量也在持续增长, 截止二季度末, 华助会会员数量稳步增长至2.9亿, 同时华助中央预订系统贡献的建议量占比达65.1%, 同比提升5.2%个百分点。近期, 我们推出了会计陪的会员价格保障功能, 确保会员预订享有更低价, 未来我们将进一步针对会员权益积分使用场景异业合作等方面进行优化和探索, 以实现更强的会员粘性, 持续强化直营直销能力的建设。 Lastly, we remain focusing on our direct sales capability through H Rewards membership program.

<unk> yeah.

As with the Farmington and Johan Huntsman.

Ghansham the Hoegh LNG, so huge Howard Zinn.

As shown in <unk>.

Lastly, we remain focusing on our direct sales capability through <unk> rewards membership program.

Our membership in the direct sales are vital to our sustainable long term business growth.

As we expand our hotel network and enter more new cities, our membership base continues to grow.

At the end of the second quarter extra rewards membership reached nearly 290 million members with direct bookings through Crs rose five two percentage points year over year to 65, 1%.

Recently, we introduced our price guarantee features in our etch rewards app, ensuring our our members get the best room rate.

Speaker #3: Our membership and the direct sales are vital to our sustainable long-term business growth. As we expand our hotel network and enter more new cities, our membership base continuously to grow.

Going forward, we will further enhance membership benefits expanded loyalty points usage scenarios and exploring cross industry partnership to improve member engagement and stickiness and a further boost our direct sales capability.

Hui Jin: By the end of the second quarter, H Rewards membership reached nearly 290 million members, with direct bookings through CRS rose 5.2% points year over year to 65.1%. Recently, we introduced the price guarantee features in our H Rewards app, ensuring our members get the best room rates. Going forward, we will further enhance membership benefits, expand the loyalty points usage scenarios, and explore cross-industry partnerships to improve member engagement and stickiness and further boost our direct sales capability. 以上就是华硕2025年二季度业务情况的更新。下面请 CFO Chenhui 为大家更新集团二季度的财务情况。 This concludes the business updates for H World's second quarter 2025. Now I will hand over the call to our CFO, Ms. Chenhui, to present the group's financial performance for the quarter.

Speaker #3: By the end of the second quarter, H Rewards membership reached nearly 290 million members, with direct bookings through CRS rising 5.2% year-over-year to 65.1%.

Zohydro earnings ITW Qimonda crunching, some inching, therefore temporarily didact engine technology to the table.

Okay.

This concludes the business update for <unk> second quarter 2025, now I will hand over the call to our CFO Ms <unk>, 2% of the group's financial performance for the quarter.

Speaker #3: Recently, we introduced a price guarantee feature in our H Rewards app, ensuring our members get the best room rates. Going forward, we will further enhance membership benefits, expand the loyalty points usage scenarios, and explore cross-industry partnerships to improve member engagement and stickiness, and further boost our direct sales capability.

Yeah.

Thank you and can't wait for the evening and good morning, everyone.

Let me walk you through our second quarter financial overview.

During the quarter, our total revenue.

Four 5%.

<unk> to RMB six 4 billion.

Speaker #3: ??????2025???????????????CFO???????????????????????This concludes the business updates for H Rewards second quarter 2025. Now, I will hand over the call to our CFO, Ms. Chen Hui, to present the group's financial performance for the quarter.

Near the high end of our previous guidance.

Of which <unk> five revenue increased five time.

7% year over year.

We are glad to deploy that.

As we continue repairing our asset light strategy.

Cost optimization efforts.

Chenhui: Thank you, Hui Jin. Good evening and good morning, everyone. Let me walk you through our second quarter financial overview. During the quarter, our group revenue grew 4.5% year over year to RMB 6.4 billion, near the high end of our previous guidance, of which H World's revenue increased 5.7% year over year. We are glad to report that as we continue carrying out asset-light strategies and cost optimization efforts, we saw year-over-year margin improvements from both H World and DH segment. As a result, our group adjusted EBITDA rose by 11.3% year over year to RMB 2.3 billion. Adjusted net income increased 7.6% year over year to RMB 1.3 billion. More importantly, as we may notice, we started providing revenue and gross operating profit breakdown for our managed franchise and lease-and-operate business in our presentation.

Speaker #4: Thank you, Jinhui. Good evening and good morning, everyone. Let me walk you through our second quarter financial overview. During the quarter, our group revenue grew 4.5% year-over-year to RMB 6.4 billion, near the high end of our previous guidance.

Yes, we are margin improvements from legacy <unk> and <unk>.

As a result, our Apple adjusted EBITDA Rose by 11, 3%.

So Andy proprietary bidding.

And adjusted net income increased seven 6% year over year to RMB, one time strengthening.

Speaker #4: Of which, let's see if our group revenue increased 5.7% year-over-year. We are glad to report that we are as we continue carrying out asset line strategy, and the cost optimization efforts we saw year-over-year margin improvement from both Lexi Huazhu and Lexi DH.

More importantly, ethylene.

We may have noticed that we started providing revenue and cross operating profit breakdown for our monetized franchise and Nissan business.

In our presentation.

It could it be better demonstrate our future business development strategy.

Speaker #4: As a result, our group adjusted EBITDA rose by 11.3% year-over-year to RMB 2.3 billion. Adjusted net income increased 7.6% year-over-year to RMB 1.3 billion.

Especially on the profit growth driver given our asset light transformation period.

Looking into the number in the second quarter.

Our Medicare franchise business revenue.

Speaker #4: More importantly, as we may notice that we started providing revenue and gross operating profit breakdown for our monetized franchise and Nissan-owned business in our presentation.

The party.

Matt.

Can you talk to a client <unk>.

<unk>, yeah, well yeah Paul.

So RMB <unk> 9 billion and across operating profit.

<unk> three.

Chenhui: We believe it could better demonstrate our future business development strategy, especially on the profit growth driver during our asset-light transformation period. Looking into the numbers in the second quarter, our managed franchise business revenue reported a robust 22.8% year over year growth to RMB 2.9 billion, and the gross operating profit rose by 23.2% year over year to RMB 1.9 billion in the second quarter, respectively. The robust growth in both revenue and profit was mainly driven by hotel network expansion. More importantly, given the nature of asset-light business model, managed franchise margin profile is relatively stable and is less impacted by RevPAR movement compared to lease-and-operate. On lease-and-operate business front, we continue reducing the exposure. In the second quarter, our lease-and-operate revenue and lease-and-operate gross operating profit decreased 7.6% year over year and 13.4% year over year, respectively.

Speaker #4: We believe it would be better to demonstrate our future business development strategy, especially regarding the profit growth driver. During our asset line transformation period, looking at the numbers in the second quarter, our monetized and franchise business revenue reported a robust 22.8% year-over-year growth to RMB 2.9 billion, and the gross operating profit rose by 23.2% year-over-year to RMB 1.9 billion.

<unk> yeah yeah.

So RMB, one 9 billion in the second quarter, respectively.

Hello basketball in both revenue and profit was mainly driven by hotel network expansion.

More importantly, given the nature of asset light business model.

Monetized our franchise margin.

Profile.

Relatively stable.

Is less impacted by rather panromantic competitor Lisa.

Our leasing business front, we've continued reducing that exposure.

Second quarter hour lithium revenue and Lisa on broth operating profit.

Speaker #4: In the second quarter, respectively, the robust growth in both revenue and profit was mainly driven by hotel network expansion. More importantly, given the nature of the asset-light business model, the monetized and franchise margin profile is relatively stable and is less impacted by revenue movement compared to Nissan-owned.

Increased seven.

Seven 6% year over year.

And the 13, 4%.

Yes effectively.

Our asset light chance of transformation is starting to add for the lost profit contribution.

<unk> and franchised business.

In the second quarter, our managed and franchise business.

Speaker #4: On the Nissan-owned business front, we continually reduced our exposure in the second quarter. Our Nissan-owned revenue and Nissan-owned gross operating profit decreased 7.6% year-over-year and 13.4% year-over-year, respectively.

Year to date.

64% of our total gross operating profit.

Uptown client a five percentage point year over year.

Moving to the cash flow and liquidity position.

Our second quarter.

<unk> integrated the RMB, two 7 billion operating cash flow.

Chenhui: Our asset-light transformation resulted in a further enlarged profit contribution to managed franchise business. In the second quarter, our managed franchise business contributed to 64% of our total gross operating profit, up 7.5% year over year. Moving to the cash flow and the liquidity position, in the second quarter, we generated RMB 2.7 billion operating cash flow. As the quarter ends, the group had RMB 13.7 billion cash and cash equivalent and RMB 6.2 billion net cash on the balance sheet. We are committed to pay out dividends consistently and stick to our shareholder return plan. For the first half of 2025, we are glad to declare a US dollar 250 million interim cash dividend, which represents 74% of our first half net profit and together with roughly US dollar 62 million share buyback.

Speaker #4: Our asset line transformation resulted in further enlarged profit contribution from our monetized and franchise business. In the second quarter, our monetized and franchise business contributed to 6.4% of our total gross operating profit.

And as of quarter end, the group had RMB 13, 7 billion cash and cash equivalent and <unk>.

RMB six 2 billion net cash on the balance sheet.

We are committed to pay out dividend consistently let's take it to our shareholder return.

Speaker #4: Up 7.5 percentage points year-over-year. Moving to the cash flow and the liquidity position, in the second quarter, we generated RMB 2.7 billion in operating cash flow. As of quarter end, the group had RMB 13.7 billion in cash and cash equivalents, and RMB 6.2 billion in net cash on the balance sheet.

For the first half of <unk>.

Glad to declare a U S dollar 200.

50, meaning entirely in cash dividend.

Which represents 74% of our first half net profit and.

And together with roughly 62 million share buyback.

Lastly.

Guidance for the third quarter of 2025.

Speaker #4: We are committed to pay out dividend consistently and stick to our shareholder return plan. For the first half of 2025, we are glad to declare a US dollar 250 million interim cash dividend.

We expect our global revenue to grow 12% to six.

6% compared to the same quarter last year, and 4% to 8% excluding the edge.

The monetize and franchise revenue in the third quarter of $10 25.

Speaker #4: Which represents 74% of our first half net profit. Together with approximately $62 million in share buybacks, lastly, regarding our guidance for the third quarter of 2025, we expect our group revenue to grow 2% to 6% compared to the same quarter last year, and 4% to 8% when excluding DH.

It's expected to grow in a range of.

Tim Davies and 24%.

Pad towards the third quarter last year.

With that we're ready to take your questions.

Chenhui: Lastly, on our guidance for the third quarter of 2025, we expect our group revenue to grow 2% to 6% compared to the same quarter last year and 4% to 8% if excluding DH segment. The managed franchise revenue in the third quarter of 2025 is expected to grow in a range of 20% to 24% compared to the third quarter last year. With that, we are ready to take your questions. Operator, please open the line for Q&A.

Operator, please open the lines for Q&A.

Thank you.

To ask a question.

You will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again please.

Speaker #4: The monetized and franchise revenue in the third quarter of 2025 is expected to grow in a range of 20% to 24% compared to the third quarter last year.

Please standby, while we compile the Q&A roster.

We will take our first question and the question comes from the line of Manav Leung from Bank of America. Please go ahead. Your line is open.

Speaker #4: With that, we are ready to take your questions operator, please open the line for Q&A.

Yeah.

Hey, good morning, Tom Watson.

If anything what you guys he limits you quite well.

Jason Chen: Thank you. As a reminder to ask a question, you will need to press star one, one on your telephone, and wait for your name to be announced. To withdraw your question, please press star one, one again. Please stand by while we compile the Q&A roster. We will take our first question, and the question comes from the line of Ronald Lung from Bank of America. Please go ahead, your line is open.

Speaker #1: Thank you. As a reminder, to ask your question, you will need to press *1, 1 on your telephone and wait for your name to be announced.

<unk>.

Or when do you think one Ralph part of Q.

One is.

Hi, Olczak NIM, Ralph potash Gucci is helpful.

Speaker #1: To withdraw your question, please press star one, one again. Please stand by while we compile the Q&A roster. We will take our first question.

Hi al.

Chan men.

Yes.

Yes, I think I said Eagle when people Thiago <unk> Kuan yew seem Dan.

Hey, Ralph.

Speaker #1: And the question comes from the line of Ronald Lang from Bank of America. Please go ahead; your line is open.

You called <unk> that's it.

You may all content does seem Dan Thai hot water.

Hui Jin: question is about RevPAR. What is your expectation for the RevPAR in Q3 and also Q4? Is there any change to the full-year revenue guidance? This is my first question. My second question is about any potential impact on RevPAR from new hotel openings. Do you see any potential cannibalization when new hotels open and ramp up, and that could affect the old hotels? If yes, are there any initiatives that management can take to address this conflict? Thank you very much. Thank you for your question. First of all, everyone is still very concerned about RevPAR, but I particularly want to share with you that I think you can pay more attention to H World Group Limited's steady increase in market share in the Chinese market in the long term, as well as our high-quality brands and our improvement in many core capabilities.

Ken I'm doing a deal within there Ralph.

Speaker #5: Hi, 管理层, 晚上好。谢谢你给我一个提问的机会。我有两个问题。第一个问题是关于Roth part的预期的。请问管理层对三季度还有全年Roth part的预期是什么? 还有就是全年的收入的指引有没有什么改变? 这个是第一个问题。第二个问题是关于新店对总体Roth part的影响的一个问题。就是管理层有没有看见在新店开还有爬坡的时候, 可能对旧店的Roth part会有一些坏的影响? 如果有的话, 这个矛盾可以有没有什么方法可以解决? Hi, good evening. Management, thank you for taking my question. So I have two questions.

Thank you Michelle.

Now without <unk>.

<unk> got mountain KLA may have some more phone calls.

Hey, Julien.

Hi, Good evening management. Thank you for taking my question. So I have two questions.

First question is about the rod pump.

What is your expectation for the loss in <unk> and also 202 five.

It.

Is there any change to the full year revenue guidance. This is my first question.

My second question is about any potential impact on <unk>.

Some new hotel openings. So do you see any potential can thereby season, when new hotels opened and.

Ramp up and that could affect the old house.

Yes.

Are there any new Jacobs that management can take to address this context. Thank you very much.

Speaker #5: My first question is about Roth part. So what is your expectation for the Roth part in 3Q and also 2025? And is there any change to the full year revenue guidance?

Okay.

Sure Randall.

Okay.

So here or there hasn't been quasi railcar.

Provision can digest pinch out which of the cheese.

Speaker #5: This is my first question. My second question is about any potential impact on Roth part from new hotel openings. So do you see any potential cannibalization when new hotels open and ramp up, and that could affect the old hotels?

She said IP co worker in Guangzhou Hartzell, some sheets versus Honda, sometimes I ended on booties and EQM of coffee to the team.

As humans and dogs human nutrition.

The Macquarie.

Which oh Gee it could change.

Speaker #5: If yes, are there any initiatives that management can take to address this conflict? Thank you very much.

Thank you to the Nurse's office English involve either towards the 20 the Vita.

Our <unk> business, which you kind of them to work with each other avenue, that's either for your fiber to handle them encouraging bunge either your questions to the cable choices that swing or something to say on the geopolitical front room and so those are two <unk>.

Speaker #2: 谢谢Ronald。感谢你的问题。首先, 我大家还是很关心Roth part, 但我特别想跟大家分享我觉得其实可以各位更关注华助的长期在中国市场的市场占有率的稳步提升, 以及我们高品质品牌, 以及我们在很多核心能力的提升。那么关于Roth part, 我想结合近期的我们三季度的本旅市场和中国的情况, 我给大家做一个统一的回答。我们今年确实暑期看到了很多各地加大本旅的这个服务, 也发布了很多门票的减免、半价的优惠, 限时的开放, 确实带来了中国市场的这样的进一步的这个繁荣。但是受到一些极端天气以及宏观的不确定, 一些因素确实我们目前三季度, 我们预测三季度Roth part同比仍然会略有下滑, 但是同比降幅要将二季度进一步收窄。至于我们关于全年的Roth part和收入的指引, 目前确实面对宏观的一些不确定性, 尤其过去两年中国酒店业同质化供应的迅速增加, 确实造成了一些经营的挑战。对我们整个经营确实有Roth part造成了一些影响。我们预计全年的Roth part会略低于我们年初的预测, 同比下滑低个位数, 低个位数的这样的一个下滑。但是不管外面挑战怎么样, 我想我们还是这个努力实现我们我开头讲的, 我们在品牌, 我们在供应链, 我们在科技, 在会员, 在营销方面等等核心能力的构筑, 使得我们华助在经营压力下表现得非常强的经营的韧性。结合我们的整个的高质量的门店扩张, 以及轻资产化的这样的一个战略, 我们今年全年的收入预测, 我们将努力达到我们年初给到的市场的指引区间。OK, let me translate.

Hui Jin: Regarding RevPAR, I would like to give you a unified answer based on the recent situation in our Q3 local market and China. This summer, we did see many places increasing local services and releasing many ticket reductions, half-price discounts, and limited-time openings, which indeed brought about such a progressive prosperity in the Chinese market. However, due to some extreme weather and macro uncertainties, we currently predict that RevPAR in Q3 will still decline slightly year-on-year, but the year-on-year decline will further narrow compared to Q2. As for our full-year RevPAR and revenue guidance, facing some macro uncertainties, especially the rapid increase in homogenized supply in China's hotel industry over the past two years, it has indeed caused some operational challenges and had some impact on our overall operations and RevPAR. We expect the full-year RevPAR to be slightly lower than our initial forecast, with a single-digit year-on-year decline.

Ensure tusa woman.

And since you do or maybe you could send it to <unk>.

We agree with Shanghai Tang.

Tony will be Johnson, <unk> already too cheap.

Yeah.

So your roaming growing junior in the Red Hot So that's seen much interest maybe when the issue you're appreciating yohji country done yet doing what youre doing in tons required green shoots.

Results from Asia G&A towards that.

Two women and girls Jean Tricia your railcar talking to as well.

While my EOG Chinula railcar.

Do you have into that you took.

<unk> net shelf article with the good.

<unk> they show up.

As a boy Oh boy alignment.

We sell the highest to the annuities as you'll remember I told you on the women's team.

Their courage their holdings.

And Jeff on the it and the increasingly need to go to pseudo among hardwood.

Genealogy amputation free lunch on the Jimmy Choo.

Zero minutes and good cultural element in courts are changes how hard the Sandy Assembly will mounting in junior in the suit who took over in.

Jen <unk>.

Okay.

Okay.

Let me translate so.

I understand you guys are still very much looking at the revpar movements for so for.

We hope you can.

You're going to focus more on the long term.

No it's true it towards a performance in terms of the market share gaining and our improvements in terms of the products and the brands as well as you know a lot of improvements from different different fronts to create our core competency.

In terms of the Revpar guidance for the third quarter and our full year for the third quarter, especially during the summer holiday.

Ups served that's you know a lot of you know local governments are promoting.

Speaker #2: So I understand you are still very much looking at the Roth part movements. First of all, we hope you can focus more on the long-term H Rewards performance in terms of market share gains, our improvements in terms of products and brands, as well as a lot of improvements from different fronts to create our core competency.

The tourism industry for example by providing deep discounting in terms of the tickets even free tickets, giving.

Just trying to boost the demand for the leisure traveling.

However, in some regions and areas was affected by some extreme weather extreme weather conditions.

Some of the macro uncertainties.

You know some of the weekend.

Speaker #2: In terms of the Roth part, guidance for the third quarter and the full year, for the third quarter, especially during the summer holiday, we observed that a lot of local governments are promoting the tourism industry, for example, by providing deep discounts in terms of the tickets, even free tickets giving just trying to boost the demands for the leisure traveling.

Consumer spending well in this.

The overall performance to now for the summer holiday.

Hui Jin: However, no matter what the external challenges are, I think we are still striving to achieve what I mentioned at the beginning: building our core capabilities in brands, supply chain, technology, membership, and marketing, so that H World Group Limited can demonstrate strong operational resilience under operational pressure. Combined with our high-quality store expansion and asset-light strategy, we will strive to achieve our full-year revenue forecast within the guidance range given to the market at the beginning of the year. The overall performance till now for the summer holiday is slightly below our previous expectation. Therefore, we think the third quarter's RevPAR will still have a very slight year-over-year decline. However, it is going to be quite significantly narrowed on a sequential basis.

Slightly below our previous expectation.

Therefore, we're seeing the third quarter's revpar.

<unk> do you have a very slight year over year decline.

Wherever it's going to be.

Quite significantly narrowed on the sequential basis.

Speaker #2: However, in some regions and areas, we were affected by some external weather conditions and extreme weather events. Plus, some of the macro uncertainties and weakened consumer spending have led to the overall performance, till now, for the summer holiday being slightly below our previous expectations.

In terms of the you know.

Full year Revpar again, because of some some of the macro uncertainties, especially as I mentioned previously there was quite a lot of supply increased over the last two years.

SKU, creating some of the challenges currently.

Combining the performance for the first half as well as you know the current summer holiday performance.

Speaker #2: Therefore, we think the third quarter's Roth part will still have a very slight year-over-year decline; however, it's going to be quite significantly narrowed on a sequential basis.

We are currently expecting you know the revpar for the full year performance will be slightly below our previous guidance.

Hui Jin: In terms of the full-year RevPAR, again, because of some of the macro uncertainties, especially as I mentioned previously, there was quite a lot of supply increase over the last two years. It is still creating some of the challenges currently. Combining the performance for the first half as well as the current summer holiday performance, we are currently expecting the RevPAR for the full-year performance will be slightly below our previous guidance. But however, as I mentioned, we have been putting a lot of efforts in terms of improving our products, our sales capability, our supply chain capability, just to make sure that we can be much resilient even under this kind of challenging market conditions. Therefore, in terms of the revenue, we will strive to achieve our previous guidance.

But however, as I mentioned, we have been putting a lot of efforts in terms of to improve our products our sales capability our supply chain capability.

Speaker #2: In terms of the full-year Roth part, again, because of some of the macro uncertainties—especially, as I mentioned previously—there was quite a lot of supply increased over the last two years.

To make sure that we can be much resilient, even under this kind of challenging.

Speaker #2: It's still creating some of the challenges currently. Combining the performance for the first half as well as the current summer holiday performance, we are currently expecting the Roth part for the full year performance will be slightly below our previous guidance.

Market conditions. Therefore in terms of the revenue, we will strive to achieve our previous guidance.

<unk> how are you doing.

The panel with you.

<unk> in Nevada.

This year. So is there any view about the yard instances she assortments in day two of the larger attempting.

Speaker #2: But however, as I mentioned, we have been putting a lot of effort into improving our products, our sales capability, and our supply chain capability, just to make sure that we can be much more resilient even under these challenging market conditions.

Brokers are oriented geologic time, peanuts, which imaging finding chatting a variety of conditions.

<unk> foods, a coach junior enrollment changes from sending incident.

Amy.

As you need the Odeon in the ascending huntington's treat other sending sending them within stemming from the timing needs to gender.

Speaker #2: Therefore, in terms of the revenue, we will strive to achieve our previous guidance. 关于同店的Roth part, 我也很愿意跟你探讨。因为的确华助经过了20年的发展, 在一些市占率比较高的一二线城市, 确实我们存在比较多的老旧产品。不可否认这些老旧产品在目前的经营环境下承压, 压力会更大一些。由于华助在过去几年, 比如我们全季从3.0、4.0到目前的5.0, 橘子经历了2.0到3.0, 汉庭从最早的3.0、3.5到目前的4.0, 我们的产品力出现了非常大的提升, 根本性的品质的提升, 同时在这些核心城市, 由于房地产的一些周期的缘故, 出现了不少优质的物业, 更为优质的物业。在这种情况下, 华助布局了一些应该讲物业更好、品质更佳的新产品, 对于我们老的同店的这些门店的确造成了Roth part的一定的影响。在这个情况下, 我认为是一个阵痛期, 也是我们华助必须得迈过的这样一个门槛。因为我们希望以更高的品质去实现我们未来的市场占有率, 不仅仅是我们的规模。我觉得我们的市占率的质量也是我们非常关注的一个核心要素。因而, 当然对存量门店遇到这个问题以后, 我们怎么解决, 我认为毫无疑问, 第一个就是对存量门店的做出升级, 这个帮助改进是我们非常重要的一个方法。同时, 进一步合理规划我们未来的高质量的布局, 也是我们正在展开的工作。所以, 大概是这样情况。这个问题确实是目前我们遇到的同店在核心城市高质量替换接单的一个阵痛。谢谢你们的问题。

Todd Chisum convincing the piece of the T cell <unk>.

Hui Jin: 关于我关于同店的这个ROTH Part, 我也很感兴趣跟你一并探讨, 因为的确华硕经过了20年的发展, 在一些市占率比较高的这个一二线城市, 确实我们存在比较多的老旧产品。不可否认这些老旧产品呢, 在目前的经营环境下承压压力会更大一些。呃, 由于华硕在过去几年, 比如我们全季从3.0、4.0到目前的5.0, 橘子经历了2.0到3.0, 汉庭从最早的3.0、3.5到目前4.0, 我们的产品力出现了非常大的提升, 啊, 根本性的品质的提升。同时在这些核心城市, 由于房地产的一些周期的缘故, 出现了不少优质的物业, 更为优质的物业。在这种情况下, 华硕布局了一些应该讲物业更好, 品质更佳的新产品, 对于我们老的同店的这些门店的确造成了ROTH Part的一定的影响。在这个情况下, 我认为是一个阵痛期, 也是我们华硕必须得这个迈过的这样一个门槛, 因为我们希望以更高的品质去实现我们未来的市场占有率, 不仅仅是我们的规模, 我觉得我们的市占率的质量也是我们非常关注的一个核心要素。呃, 因而当然对存量门店遇到这个问题以后, 我们怎么解决, 我认为毫无疑问第一个就是对存量门店的做出升级, 这个帮助改进是我们非常重要的一个方法。同时进一步合理规划我们未来的高质量的布局, 也是我们正在展开的工作。所以, 呃, 大概是这样情况。第一, 这个问题确实是目前我们遇到的同店在核心城市高质量替换接单的一个阵痛。谢谢你们的问题。 In terms of the impact from the new hotels to the old hotels, we have to admit, over the past 20 years of development, especially in those tier one to tier two, where we have higher market share, we have a much higher basis. There are a lot of old versions of the products which have been running for many, many years. Of course, in the current environment, this kind of products' competitiveness is quite low. So, as you may notice that we have been constantly introducing new products.

Sushi acquaintances will you fund is an issue.

<unk> and <unk>.

We can we're used to that.

Two launching launch out to <unk>.

<unk> here.

John we can call.

Jud sometime to do them in Lauder tremendous achievement.

And the Revpar the eighteens.

Yeah, I wouldn't want to see good tendencies.

The amount of auto PGD.

Michael It's Eric.

And we will Miss you want you can go to <unk> Sahin warmer winter. This is something that continues to have an agreement with Jerome and this is a needed to deal with silver feed subsequent through the Eagle accretion you also.

So now when you go.

<unk> <unk> <unk>.

Towards through synergy too.

So the bonds, Okay, Jim Suva, 3000, or the Eagle Fone line.

Gene pool really grew while warm woman would either close it on our books.

I assume since its incredible.

Sorry.

Residential <unk> channel than you thought it will be entire quaintance causally on tier one under the units until.

Tissue.

In terms of the impacts from the new hotels to the old hotels, we have to admit you know over the past 20 years of development, especially in those tier one to tier two where we have higher market share and we have a much higher basis.

There are a lot of you know.

Old version of the product, which has been running for many many years.

Of course on the currency.

Power months that this kind of product competitiveness is quite.

No.

So as you may notice that we have been.

Constantly introducing new products for example, we upgraded.

Speaker #5: In terms of the impacts from the new hotels to the old hotels, we have to admit that over the past 20 years of development, especially in those tier one to tier two cities, where we have a higher market share, we have a much higher basis.

Hotels from previous 353 points zero two currently five zero the Orange from 1.0 to the current straight 0.0 and hunting from previous maybe 2.0 to the latest of four points a year ago.

Or the product itself the quality has been improved massively.

Speaker #5: There are a lot of old versions of the products which have been running for many, many years. Of course, in the current environment, this kind of product's competitiveness is quite low.

Of course that we are adding some of the pressures to the older products.

And also in addition to this in the tier one tier two cities because of the real estate market.

Speaker #5: So as you may notice that we have been constantly introducing new products, for example, we upgraded G Hotels from previous 3.02 currently 5.0, the orange from 1.0 to the current 3.0, and Hunting from previous maybe 2.0 to the latest 4.0.

Weakness there is a lot of you know.

Hui Jin: For example, we upgraded JI Hotels from previous 3.5 or 3.0 to currently 5.0, the Orange Hotel from 1.0 to the current 3.0, and HanTing Hotel from previous maybe 2.0 to the latest 4.0. All the products itself, the quality has been improved massively. Of course, we are adding some of the pressures to the old products. In addition to this, in the Tier 1, Tier 2 cities, because of the real estate market weakness, there are a lot of high-quality properties coming out to the market, which we can have much better property to open new hotels with much higher quality products. That is why, I mean, we have to admit that kind of creating some of the negative impacts to the existing, old hotels.

High quality proper properties are coming out to the market, which we can have.

Much better property to open new hotels with much higher quality products.

And that's why I mean, we have to admit that kind of creating some of the <unk>.

Speaker #5: All the products itself, the quality has been improved massively. Of course, as we are adding some of the pressures to the old products. And also in addition to this, in the tier one, tier two cities, because of the real estate market, weakness, there is a lot of high-quality property coming out to the market.

<unk> <unk> to the existing <unk>.

All the hotels, but we do believe.

It is a short term pain and that we have to go through this because our target is not only gaining market share, but we won't get any market share with high quality products.

Desktop has never been changed of.

Course, we are looking for some of the solutions to solve this kind of problem. Firstly, we are actively looking for upgrades for the existing hotels and.

Speaker #5: Which we can have much better property to open new hotels with much higher quality products. That's why we have to admit that's going to create some of the negative impacts to the existing old hotels.

And secondly, we will be more rationally.

In terms of you know.

Positioning for the new hotel openings. Thank you.

Yes.

Hui Jin: But we do believe it is a short-term plan, and we have to go through this because our target is not only gaining market share, but we want to gain market share with high-quality products. That strictly has never been changed. Of course, we are looking for some of the solutions to solve this kind of problem. Firstly, we are actively looking for upgrades for the existing hotels. Secondly, we will be more rationally in terms of the positioning for the new hotel openings. Thank you.

Speaker #5: But we do believe it is a short-term plan, and we have to go through this because our target is not only gaining market share, but we want to gain market share with high-quality products.

Thank you.

We will take our next question.

Your next question comes from the line of Dan <unk> from Morgan Stanley. Please go ahead. Your line is open.

Speaker #5: That tactic has never been changed. But of course, we are looking for some solutions to solve this kind of problem. Firstly, we are actively looking for upgrades for the existing hotels.

Go ahead Glen why somehow.

A woman cut our teeth.

So to confirm the two foot <unk> camo quality Italia.

Speaker #5: And secondly, we will be more rationally in terms of the positioning for the new hotel openings. Thank you.

Good to hear.

Tingling ammonia.

Same thing when it comes through.

Hyphen, Behold Cody I'll see you guys coming out of the Qingdao.

Some children with somebody else.

We like what <unk> Passu says that doesn't that just yet.

Jason Chen: Thank you. We will take our next question. Your next question comes from the line of Dan Qi from Morgan Stanley. Please go ahead, your line is open.

Speaker #1: Thank you. We will take our next question. Your next question comes from the line of Dan Chi from Morgan Stanley. Please go ahead, your line is open.

People without.

<unk> institutional <unk>.

Hyphen, just using <unk> tomo.

Hello, Glenn.

So <unk> had some we don't count though Molly.

Hui Jin: 各位管理层, 晚上好。我们看到这一次这个财报, 首次公司就分拆披露了整个直营还有加盟管理的两个业务, 各自的直接经营的毛利。那么想请问公司这一次这样拆分的整个背后的考量是一个什么样的情况, 还有经营策略上着重点有没有在未来会有一些变化, 就是在这两个业务之间。进一步我想请教公司, 就是对于这一次的拆分, 就是想请教加盟管理业务, 现在占总体刚才陈hui总讲到毛利润是64%，那么收入的增速是23%。我们看到利润率是增长的, 就是轻资产的这一块, 但是重资产的直营业务呢, 这个毛利率是毛利是下降13%的。那么中国区的毛利下降20%，利润率是下降的。所以想请教对于中国区直营这一边的这个业务的整个利润率呢, 有没有什么方式呢, 公司可以帮助到这个直营利润未来的一个表现？那我翻译一下。Thank you, management, for this opportunity. We saw H World Group Limited break down the gross operating profit between the asset-heavy lease-and-operate and asset-light franchise and managed business segments. What is the key message behind the new disclosure in terms of strategic focus between these two business segments? Is there any change we should expect in the future? Another follow-up question on this topic is asset-light franchise and managed segment is now 64% of total gross operating profit, with its segment revenue growing 23% this quarter. So gross operating profit margin increased slightly, but the gross operating profit for asset-heavy lease-and-operate declined by 13%. Legacy China, H World Group Limited business lease-and-operate gross operating profit down by 20%. Gross operating profit margin also declined. So going forward, what is the outlook for the margin of this segment?

Speaker #5: 各位管理层, 晚上好。我们看到这一次财报首次公司就分拆披露了整个指引还有加盟管理的两个业务, 各自的直接经营的毛利。那么想请问公司这一次这样拆分的整个背后的考量是一个什么样的情况? 还有经营策略上着重点有没有在未来会有一些变化, 就是在这两个业务之间? 进一步我想请教公司就是对于这一次的拆分, 就是想请教加盟管理业务现在占总体刚才陈慧总讲到毛利润是64%。那么收入的增速是23%。我们看到利润率是增长的, 就是轻资产的这一块。但是重资产的直营业务, 这个毛利率是毛利是下降13%的。那么中国区的毛利下降20%。利润率是下降的, 所以想请教对于中国区直营这一边的这个业务的整个利润率, 有没有什么方式公司可以帮助到这个直营利润未来的一个表现? 那我翻译一下, thank you management for this opportunity. We saw the company breaks down the gross operating profit between the asset heavy lease and own and asset light franchise and managed business segments.

Sure.

So.

I was just.

Catalyst one.

It takes some time to take questions.

This is <unk>.

Molly Molly.

<unk> shutdown provinces, Santa <unk> Mount Isa.

These are leases, Canada, so he salad kit.

Yeah.

<unk> took a year without a good leader.

It's a function of constantly punctual without even wait I think it would be awesome.

Not well thank you John.

Thank you management for this opportunity we saw the company.

So the gross operating profit.

Between the asset heavy lethal and asset light franchise and manage business segments. Once the key message behind the new disclosure in terms of strategic forecast between these two business segments is there any change we should expect in the future.

Follow up question on this topic is asset light franchise and managed segment is now 64% of total GOP.

With this segment revenue growing 23% this quarter GOP margin increased slightly but the GOP for us a heavy lease and own declined by 13% legacy China Auto business, Lisa <unk> down by 20% GOP margin also declined so going forward, what's the outlook for the margin.

Speaker #5: What's the key message behind the new disclosure in terms of strategic focus between these two business segments? Is there any change we should expect in the future?

This segment and is there any operation that adjustment, we can expect to support the margin of this leasing business. Thank you.

Speaker #5: Another follow-up question on this topic is that the asset-light franchise and managed segment now accounts for 64% of total GOP, with this segment's revenue growing by 23% this quarter.

Yeah.

With that I know once you ask a question.

As you know addresses aren't anticipating get any of that changed.

But unfortunately, that's part of the Jamul couch and employ more partner chicken shack showed us some boxes that changing that thunder.

Speaker #5: So GOP margin increased slightly. But the GOP for asset heavy lease and own declined by 13%. Legacy China Huazhu business lease and own GOP down by 20%.

I think even assays, our machine being agile with hateful shoulder with that over to Jan Schott Shanghai.

Speaker #5: GOP margin also declined. So going forward, what's the outlook for the margin of this segment? And is there any operation adjustment we can expect to support the margin of this lease and own business?

Neither do something when deemed the January lesion count won't allow them answer that question.

Hui Jin: Is there any operation adjustment we can expect to support the margin of this lease-and-operate business? Thank you.

Jim O'neill, the Xinjiang, so going slower actual returns on a quite yet.

Speaker #5: Thank you.

What country in Shanghai in one quarter that's engine.

Chenhui: franchise and lease-and-operate businesses separately to the market. Also, please translate this first.

Speaker #4: 非常好。我来回答您的问题。过去几年华助始终在积极推进集团业务的轻资产化, 大家也可以看到过去的几个季度, 华助的加盟业务在高质量规模扩张的驱动下, 收入始终保持着强劲的增长。而直营业务随着我们直营店的逐步退出, 收入在逐步减少。显然, 利率率相对稳定的加盟业务已经成为了我们公司未来发展的核心。加盟业务的增长是公司未来收益增长的关键。在公司逐步从直营向加盟过渡的转型期, 为了可以更加清晰、直观地展现公司的核心业务的表现, 我们是从这个季度开始向市场披露加盟与直营分别的GOP。另一方面, 我们先翻译一下。

Let's say you can get CCH required attention going through the thinking.

Unless a concept like <unk> Sharma, Eugene Sandy that kill people.

Yes.

Okay.

Thanks, Dan for the questions as you may notice that over the past several years, we have been quite actively to.

During the transformation for the group.

Over the last few quarters.

Our <unk> franchise the business have been growing.

Quite rapidly driven by the high quality network expansion.

And also to drive the revenue growth as well in terms of the leased and owned business you have been seeing that you know the exposure for the leased and the online business has been gradually reducing of course.

Hui Jin: Okay. Thanks, Dan, for the questions. As you may notice that over the past several years, we have been quite actively doing the asset-light transformation for the group. Over the last few quarters, our managed franchise business has been growing quite rapidly, driven by the high-quality network expansion, and also drives the revenue growth as well. In terms of the lease-and-operate business, you have been seeing that the exposure for the lease-and-operate business has been gradually reducing. Of course, the stable asset-light business has a much stable gross margin. It also shows a real business development and the strategy for the group going forward. That is why, starting from this quarter, we started giving a breakdown between our asset-light business and the asset-heavy business.

Speaker #5: OK, thanks Dan for the questions. As you may notice, over the past several years, we have been quite active in doing the asset line transformation for the group.

The stable.

Mmm I felt like business.

So much stable gross margin and also it shows our real business development and strategy for the group going forward.

Speaker #5: Over the last few quarters, our monetized and franchised business have been growing quite rapidly. Driven by the high-quality network expansion, and also drives the revenue growth as well.

That's why starting from this quarter, we start started to giving a breakdown between our asset light business and asset heavy business.

Speaker #5: In terms of the lease and own business, you have been seeing that the exposure for the lease and own business has been gradually reducing.

Thank you Melanie <unk>.

Don't be shy enrollment at Chamberlain is our niche.

Sure.

Speaker #5: Of course, the stable M&F, the asset light business, has a much stable gross margin. And also it shows a real business development and strategy for the group going forward.

In addition to the email merchandising dance agile with hateful Leland.

Even the <unk>.

On a total shutdown in China, especially and that will allow them and you don't need a how should I think that you don't need uncle do.

Do you know what I'm Joe Moore.

That's what I'm going to contour, either Sheldon say, Oh I'm in the Eagle Ford.

Speaker #5: So that's why since starting from this quarter, we started to giving a breakdown between our asset light business and the asset heavy business.

Pat Jamesian bad during the general I can open the champagne yet.

That I can help with funding attention in English.

J D E data.

Chenhui: 另外, Dan, 前面问到就是我们“lease-and-operate”酒店的 gross operating profit, 那个利润率相比我们的加盟利润率是目前是有下降。这个呢, 的确是因为我们现在“lease-and-operate”酒店在逐步退出, 利润的绝对值以及它的利润率都会受到影响。但是呢, 为了我们利润率将来还是“lease-and-operate”酒店的利润率能够尽量稳住目前的一个情况, 现在我们也在做几方面的工作。一个是我们和我们的业主方谈“lease-and-operate”酒店的租赁的减租, 而且我们上半年已经取得了相当不错的一个成绩, 应该是几个亿的一个租赁的减租, 390 million, 就390 million的一个减租。另外呢, 我们针对“lease-and-operate”酒店的营销以及收益管理以及成本的优化呢, 目前也在加强这方面的工作。所以我们是希望我们的“lease-and-operate”酒店虽然我们在逐步的退出, 但是对存量的“lease-and-operate”酒店我们还是希望利润是能够稳定。

Speaker #4: 另外, Dan 前面问到就是我们直营店的毛利, 那个利润率相比我们的加盟利润率是目前是有下降。这个的确是因为我们现在直营店在逐步退出, 所以利润的绝对值以及它的利润率都会受到影响。但是为了我们利润率将来还是直营店的利润率能够尽量稳住目前的一个情况, 现在我们也在做几方面的工作。一个是我们在和我们的易主方谈直营店的租赁的减租, 而且我们上半年已经取得了相当不错的一个成绩, 应该是几个亿的一个租赁的减租。3.9亿吧, 就3.9亿的一个减租。另外我们针对直营店的营销以及收益管理以及成本的优化, 目前也在加强这方面的工作。所以我们是希望我们的直营店虽然我们在逐步的退出, 但是对存量的直营店我们还是希望利润是能够稳定。

Cool.

Fernando just any journey there Jim so anyone that won mandates in Beijing in that.

Additionally, acquiring <unk> youll find that more changes that are transforming our console sales.

Mr Shuang, the GDS sale element there.

Page, four Tasha, <unk> Stephens and ankle and uncle Wendy.

So for the margin performance for our leased and owned business.

Is that the.

Margins declined on a year over year business. This was mainly because you know that we are gradually exiting the expulsion reducing the exposure for the leasing on therefore, you know no matter from the volume or you know no matter from the margin from the absolute dollar amounts in terms of the profit.

In a declining trend, but however in order to maintain a relatively healthy year and stable margin performance for the leased and owned business.

We are doing several key measures. One is we are actively seeking for their rental reduction with the landlord for example in the first half of this year, we actually signed up are wrong.

Hui Jin: For the margin performance for our lease-and-operate business, as you said, the margin has declined on a year-over-year basis. That was mainly because we are gradually reducing the exposure for the lease-and-operate. Therefore, no matter from the volume or from the margin or from the absolute dollar amount in terms of the profit, it is in a declining trend. However, in order to maintain a relatively healthier and stable margin performance for the lease-and-operate business, we are doing several key measures. One is we are actively seeking for the rental reduction with the landlord. For example, in the first half of this year, we actually signed up around 390 million RMB in total for the contract value, for the rental reduction.

Speaker #5: So, for the margin performance for our lease and own business, as you said, the margin has declined on a year-over-year basis. This was mainly because we are gradually exceeding the exposure or reducing the exposure for the lease and own.

390 million RMB in total contract value.

Speaker #5: Therefore, no matter from the volume or no matter from the margin or from the absolute dollar amount in terms of the profits, it's in a decline trend.

For the rental reduction and secondly in terms of the revenue management as well as the sales and marketing and a coffee cost optimization. We are doing a lot of walks for our leased and owned business as well.

Speaker #5: But however, in order to maintain a relatively healthy year and stable margin performance for the lease and own business, we are doing several key measures.

Even though that we are you know.

Gradually reducing the exposure for our leased and owned business, but we are still putting a lot of efforts for the existing properties trying to improve their performance not only the top line, but also the bottom line as well. Thank you.

Speaker #5: One is we are actively seeking for the rental reduction with the landlord. For example, in the first half of this year, we actually signed up around 390 million RMB in total for the contract value.

Thank you.

Thank you.

We will take our next question.

Speaker #5: For the rental reduction, and secondly, in terms of the revenue management, as well as the sales and marketing, and the cost optimization, we are doing a lot of work for our lease and own business as well.

Your next question comes from the line of Lithia Lee from Citi. Please go ahead. Your line is open.

Hui Jin: Secondly, in terms of the revenue management as well as the sales and marketing and the cost optimization, we are doing a lot of works for our lease-and-operate business as well. Even though we are gradually reducing the exposure for our lease-and-operate business, we are still putting a lot of efforts for the existing properties, trying to improve their performance, not only the top line, but also the bottom line as well. Thank you. Thank you.

Wanted to also ask Debbie Yeah, no way today on <unk>.

Speaker #5: Or even though that we are gradually reducing the exposure for our lease and own business, but we are still putting a lot of efforts for the existing properties, trying to improve their performance.

<unk>.

Follow up Ross.

With that I think you said that with Janney.

Sandy.

Yes, Jonathan I think you hit it.

Yeah, it's about one month.

Speaker #5: Not only the top line, but also the bottom line as well. Thank you.

He also like how would you go or pay it all kind of Goldman Sachs.

Speaker #6: 谢谢, thank you.

<unk>.

Jason Chen: Thank you. We will take our next question. Your next question comes from the line of Lydia Ling from Citi. Please go ahead, your line is open.

Speaker #1: Thank you. We will take our next question. Your next question comes from the line of Lydia Ling from City. Please go ahead; your line is open.

No no go ahead Jessica.

Yes.

And as long as Anthony with ANZ.

Hum.

I just want to turn now to issue for <unk>.

Jihong He: 首先第一个是关于开店方面的. 我们也看到 Q2 这个开店开始有点放缓, 所以想了解一下在目前的一个宏观情况下的话, 一方面加盟商现在目前的开店情绪是怎么样子的, 我们接下来的这个开店节奏是否会有所调整? 如果可以的话, 能否跟我们分享一下最新的一些签约情况? 我的第二个问题呢, 是想也在成本和利润率方面想进一步跟进. 如果在集团层面的话, 而且是我们看到就是说 Q2 整体的整个费用管控还是不错, 想了解一下成本是否还有进一步优化的空间在整个集团层面, 是否也可以展望一下今年全年的一个利润率? 谢谢.

Speaker #6: 晚上好, 我是华吉的Lydia。那我这边有两个问题想请教一下。说今天的是关于那个开店方面的, 我们也看到二季度这个开店开始有点放缓。所以想了解一下在目前的一个宏观情况下的话, 一方面家门商现在目前的开店情绪是怎么样子的? 我们接下来的这个开店节奏是否会有所调整? 如果可以的话, 能否跟我们分享一下最新的一些切约情况? 那我第二个问题是想也在那个成本和利润率方面想进一步跟进。那如果在集团层面的话, 其实我们看到就是说二季度整体的整个费用管控还是不错。那想了解一下成本是否还有进一步优化的空间在整个集团层面, 是否也可以展望一下今年全年的一个利润率? 谢谢。High management, I have two questions. And the first one is on the store extension and so we saw some deceleration in the second quarter.

So and I don't know that championship, Ohio.

<unk> had some yes.

Thank you Doug.

Yes.

Hi management I have two questions and the first one on desktop expansion and so we saw some deceleration in the second quarter. So given the current macro background.

Ill hop out at the franchise sentiment all of our openings and.

In your planning for the new openings for this year and if possible could you share with us some color.

On the new signing momentum and then my second question is on the margin side and so at group level and.

Do you have any further.

For the optimization in terms of the cost and if so could you actually gave some items on the full year margin trends. Thank you.

Qi Ji: Hi management, I have two questions. The first one is on the store expansion. We saw some deceleration in the second quarter. Given current macro background, how about the franchisee sentiment over the openings? Any adjustment in your planning for the new openings for this year? If possible, could you share with us some color on the new signing momentum? My second question is on the margin side. At group level, do you have any further optimization in terms of the cost? Could you actually give some items on the full-year margin trend? Thank you.

Okay.

Quite a cut into it so what I believe I said he said.

So we would say Kochi.

Speaker #6: So, given the current macro background, how about the franchise sentiment over the openings and any adjustments in your planning for the new openings for this year?

Yeah, well I mean possesses one chance of hartsville, putting us back room with adviser consider Hunter you quoted on the Christmas She finds it so HR genes in the center.

Speaker #6: And if possible, could you share with us some color on the new signing momentum? And then my second question is on the modern side.

Chooses to.

So julien.

<unk> added some good if I didn't know what.

Speaker #6: And so at the group level, do you have any further optimization in terms of cost? Also, could you provide some guidance on the full-year margin trend?

She is a winner.

And good about war cabinets.

She knew that there were.

She didn't and it's Andrew.

Speaker #6: Thank you.

At the end of the woods for year.

G suite down to Washington to them in a bag with a triple a and then go to the under single idea.

Hui Jin: 不仅仅是大规模的发展, 更是强调一个高质量的可持续发展, 我们所谓叫经营增长的战略, 确实在指引着 H World Group Limited 从去年到今年以及未来的整个的发展的这个规划。其实我们未来呢, 会更加严格的把握开店的成功率, 签约的质量, 围绕着旗舰店的战略, 对于酒店的位置、物业这个质量都会进行全面的把关, 来确保我们高质量的成功开店。我们会在保证产品品质、服务品质和加盟商回报的前提下呢, 这个集团会保持一个相对健康稳定的开店速度。这是对于开店的整个预测。

Speaker #2: OK, 关于关于开店节奏, 我来回答一下。其实华助在过去几年, 我们一直在始终坚持华助不仅仅是大规模的发展, 更是强调一个高质量的可持续发展。我们所谓叫经营增长的战略。确实在指引着华助从去年到今年以及未来的整个的发展的这个规划。其实我们未来会更加严格地把握开店的成功率, 签约的质量。围绕着旗舰店的战略, 对于酒店的位置、物业这个质量都会进行全面的把关, 来确保我们高质量的成功开店。我们会在保证产品品质、服务品质和加盟商回报的前提下, 这个集团会保持一个相对健康、稳定的开店速度。这是对于开店的整个预测。OK, so as you may notice that over the past several years, we have been implementing high-quality sustainable growth strategy, we are not only looking for a scale growth, I mean, the quality is much important than the scale itself.

Or is there a pause in time limiting to the Philippines is a German company by the Chinese government.

So the children, who bought Cvs siang.

Jim.

When deemed at cadence with them.

Too tight and it's been good.

Okay.

As you may notice that over the past several years.

We have been implementing high quality sustainable growth strategy, we are not only looking for scale growth I mean, the hike. The quality is much important. It then the scale itself. So we can continuously doing this.

Implementing this strategy.

So you know.

Going forward, we will be even more strict on new signings in terms of the property in terms of the you know location.

As well as you know we have to make sure that our franchisees can make a profit and at the hotel product yourself or high quality.

Qi Ji: Okay, as you may notice that over the past several years.

Jason Chen: We have been implementing a high-quality, sustainable growth strategy. We are not only looking for scale growth. The quality is much more important than the scale itself. We are going to continuously do this, implementing this strategy. Going forward, we will be even more strict on new signings in terms of the property, in terms of the location, as well as we have to make sure that our franchisees can make a profit and the hotel product itself has a high quality. Under this kind of standards, we think we still can maintain a relatively healthier pace of the new openings in the near future. Thank you.

So.

Under this kind of stuff.

Standards are we.

I think we still came into a relatively healthier PE.

Pace of the new openings in the near future. Thank you.

Speaker #2: So we're going to continuously doing this implementing this strategy. So going forward, we will be even more strict on new signings, in terms of the property in terms of the location as well as we have to make sure that our franchisees can make profit and the hotel product itself has a high quality.

India Africa and in <unk>.

They are fat reduction Pat.

And do you Wanna campaign that tissue bank.

So, yes that will Miss yes, PD nutrition that enrollment in the short term and that shut.

Shut down because you don't want Michael let me the dotcom that enrollment range have mandated shutdown you unless you have.

<unk>.

Gosh in the Kantar data MTI agenda that in.

In charter and the EBITDA bedroom or APAC hanging out at you and wash out you'd actually see Alabama Santa.

<unk> syndrome.

Camden for peaceful SPC, how would that get high SG&A pumping shutdown pattern.

Heidi: can achieve a steady improvement in profit margins in the long term.

Nice job on the animal work with their colleague.

Quay bought that changes a shack in Shanghai, Shanghai, I thought you'd be at the total special organization say that changes any of that but I am paging turnkey <unk>.

So in terms of the margin performance. So in the second quarter are benefiting from our asset light transformation and we have more revenue and profit contribution from the life business as well as our cost optimization, leveraging our supply chain capability.

As well as our Crs contribution increase.

And also a little bit part from the rental reduction so.

Putting them together help us to achieve 11, 3% adjusted EBITDA growth for the group despite the Revpar decline.

In terms of the SG&A, if you're excluding the SBC actually SG&A declined by roughly 1% for the second half of course.

Jason Chen: So, in terms of the margin performance, in the second quarter, benefiting from our asset-light transformation, we have more revenue and profit contributing from the asset-light business. As well as our cost optimization, leveraging on our supply chain capability, as well as our CRS contribution increase, and also a little bit part from the rental reduction. So, putting them together helps us to achieve 11.3% adjusted EBITDA growth for the group, despite the RevPAR decline. In terms of the SG&A, if you are excluding the SBC, actually the SG&A declined by roughly 1%. For the second half, of course, we could make some of the investment, but definitely we are going to consider a rational ROI when we do some of the investment. But in the longer-term perspective, we believe along with more asset-light contribution, we could achieve stable or gradual margin improvements in the future. Thank you.

We could make some of the investment, but definitely we can consider a Russian law when we do some of the investment but in the longer term perspective, we believe along with more of a southern lights contribution.

Achieve.

Stable a gradual margin improvements in the future. Thank you.

Thank you.

We will take our next question.

Your next question comes from the line of Simon Cheung from Goldman Sachs. Please go ahead. Your line is open.

She said she knew on guns and John Lewis from <unk>.

<unk>.

Steve I wouldn't see you Tien.

So I'll go no go hunting.

Okay. So Jay.

So <unk>.

Thank you Daniel.

Now towards the end of the Revpar data.

Got it.

Just on the data.

Alrighty.

Hello.

You saw that Guy to go <unk> Yao Boathouses Jin.

Hui Jin: Thank you. We will take our next question. Your next question comes from the line of Simon Chung from Goldman Sachs. Please go ahead. Your line is open.

How could you DJ Donna.

<unk> T is suitable.

I was hoping you could see.

This is John Coleman Sunbeam and indicates the time, Jason Honeyman I don't go down to.

Chenhui: 谢谢金总跟陈总的分享。我有两个问题。第一个问题, 刚才金总有说过那个HanTing有一些比较旧的店, 可能在比如说高线城市那边受到有一点点影响嘛, 以及你看到同店那个RevPAR跌了可能跟上个季度一样, 就跌了大概8个点左右。我想问一下大概这个问题你觉得要多长时间才可以解决到呢? 这个是第一个问题。第二个问题也是我记得上一个季度我也问过一次了, 尤其是从可能上一年年底开始感觉上, 你们在中高端这个市场的发展比之前轻商域乐观嘛, 尤其是可能Crystal Orange以及Orange Hotel这两个品牌, 尤其是Orange Hotel做得很不错。我想请教一下你们对长期来讲的发展的空间以及你们对市场的份额有什么看法? Let me translate that into English. I have two questions. The first question is in relation to the same store RevPAR performance of the company that has been somewhat affected by some of the old store under the HanTing brand that the management mentioned about. Wondering how long would it take them to kind of resolve the issue in such a way that we would start to see stabilization on the same store RevPAR? Secondly, just on the mid-upscale segments, particularly the upscale segments for the Crystal Orange as well as the IntercityHotel brand has done very well in the last, I think, a couple of quarters. Just wondering, you know, how management think about the long-term growth potential as well as the market share expectation. Thank you.

So on the thoughts on.

Jim It seems on Lugo.

It was just on.

<unk>.

Pablo.

Tito.

Sure.

Can you tell us how neiman Jonathan.

What are the thoughts on the conversion.

Neiman days on the phone.

He also my Grandpa let.

Let me translate that into English. So I have two questions. The first question in relation to the.

Revpar same store Revpar performance of the company that has been somewhat affected by some of the old store.

On the hunting brand management mentioned about I'm wondering how long would it take them to kind of resolve the issue in such a way that we were starting to see stabilization on the themes all revpar.

Ill just touch on something and then do you guys have gotten Jason Honeyman I jumped onto the sounder thoughts on beef.

Jim It seems on Lugo.

Okay.

<unk>.

Then secondly, just on the upscale segment.

<unk> and <unk>.

The Upsells upscale segment for the Crystal Orange as well as the <unk> brand has done very well in the last I think a couple of quarters.

Can you tell us how neiman Ti John.

What are the thoughts on the conversion.

<unk> this is on the phone.

And what time zone.

Let me translate that into English. So I have two questions. The first question in relation to the.

Just wondering how management's thinking about the long term growth potential of Westwood OSB market share expectation. Thank you.

Revpar at same store Revpar performance of the company that has been somewhat affected by some of the old store.

Other than a hunting, that's andy that changed somewhat.

Hudson Kings.

On the on the hunting brand that management mentioned about I'm wondering how long would it take them to kind of resolve the issue in such a way that we were starting to see stabilization on the same store revpar and.

I assume that a sedan in that time frame, where you always see the coaches and timelines as you do that.

You've got shelter at home so that's one thing.

And in the time being so cheap.

Putting that through.

Then secondly, just on the upscale segment.

It changes you're doing then you'll need changes enjoyed in this city that switching.

The upsells upscale settlements for the Crystal Orange as well as the <unk> brand has done very well in the last I think a couple of quarters.

She is a woman a quadrupling in the tender and then.

The Japanese yen or someone can be soldier on chicken.

Just wondering how management's thinking about the long term growth potential of westleigh OSB market share expectation. Thank you.

I'm going to just.

So you're free to answer on that.

And that sort of almost.

Jason Chen: 好的，我谈谈HanTing的这样的一个全局的情况。的确我们HanTing进化到现在的4.0的产品，我认为是一个过去几年产品持续迭代的一个相对成熟的一个状态。HanTing的产品设计我认为不仅在中国，在全世界都能引领经济型酒店的设计的最前沿，尤其在我们H World Group Limited供应链的整个能力的加持下，成本更低，造价工期更短，质量更稳定，应该讲是一个非常强的对于整个中国国民市场的一个发展的这个核心的品牌。刚才我也提到新的产品的确对于老的这些HanTing，尤其是我们清单里看到的2.5以下的早期产品，的确形成了代差，代际差的这样的一个产品力的这个差距。这个呢，是目前HanTing在未来一两年之内的核心工作，我们要迅速实现对于老产品的升级、改造以及退换。这个时间我们预计会在未来一两年是整个HanTing事业部的核心工作。当然，同时HanTing在全国的签约和发展速度还是非常的强劲的，尤其今年其实HanTing的整个签约，应该讲比我们预期的要来得更好。所以一方面，HanTing的任务一方面是保持一个非常高速的签约和增长，同时还实现在一二线老产品的替换。我认为在未来一两年这是一个核心工作。谢谢。 In terms of your question regarding the HanTing brand, currently, as we discussed previously, we launched the HanTing 4.0 version. Over the last several years we have been consistently upgrading HanTing brand. We believe the 4.0 should be a relatively mature product. The product itself, not only probably in China but also globally, in terms of its design, its hotel quality should be at the leading position. It is definitely leveraging on our strong capability from the supply chain because it is creating a much lower CapEx, lower OpEx, and a shorter construction, and also a better performance. Regarding the pressures from the new hotels to the older hotels, as I said previously, we noticed that, and especially our observation internally that those HanTing 2.0, 2.5 version and below are facing the biggest pressure in terms of the RevPAR performance.

Five minutes ago looking back.

And our hunting that's Andy that since you did some club.

A counterweight to the seen the time he did you do you loved it.

Well Mohan.

King.

Since that time people are doing with <unk> and <unk>.

Hi.

Sure women.

I mean as you do that.

Any kind of idea shot.

You guys sheltered soon so that's on that are hunting the time being so cheap or am I, putting that someone wants a chance. If you don't then you need changes in Jordan. This is Steve.

Shar, it's Archie times, a titration data bases, how does that would be a good time he needed to.

Yeah.

And that's even us mucci, a handful that will eat onions, and either Cushing gonzo.

Switching.

So which is a woman a hydro going in and lead the Japanese yen.

Ashish Suez Sushi into your long time doing this and she okay. It's al.

Some of them can be towards yeah. Once you couldn't do it.

You too.

So Jim I'm an issue with.

I'll go with that Josh.

With eight onion soup and good I didn't see it.

<unk> shown that.

And that sort of local news is on the five minutes ago looking looking back.

Donna.

The hunting Cheng who is the chief financial adviser based on the challenging Uzi genius is a hunting that something could change it.

A countrywide pita seemed at the time. He did you do you loved it.

C a handsome glitches here women.

I jumped the gun.

290 kind of the idea.

Hum.

We shot that Sochi times, a titration data. Thank you how did you have a good time he needed to touch them.

If I'm in the hunting and farming and supports either some cost to the tune of Hudson's optimum size to humans yet.

Thank goodness.

Hanging in there with Aegon uses.

And that will have a down year in Sydney was England's world.

Excuse me.

Ashish Seward <unk> Lodge sampling this and she okay. It's all EG to what cigar city element easier weather related I guess.

So in terms of your question regarding <unk>.

<unk> Brent.

So currently.

As we discussed previously currently were launched hunting full 0.0 version and you know over the last several years, we have been consistently upgrading hunting Brent and we believe you know the 4.0 should be a relatively immature products.

How do you see it with the leasing goes with that.

Congress is a hunting Cheng who is the chief financial adviser based on the challenging UGG and he is a hunting that something could change it.

Itself, not only probably not only in China, but also globally in terms of its dishonest hotel quality should it be at the leading position in stuff that you're leveraging on our strong capability from the supply chain, because it's creating a much lower capex lower opex and.

And Guy jump you Omer you Cheetah.

Hum.

If I'm in hunting and farming is about <unk> for example.

Also the accumulative total size to humans.

Yet lots hanging there.

I went there with Aegon uses of your physical ones one excuse me.

So in terms of your question regarding to the <unk> brand.

The shorter construction and also a better performance.

So currently.

In regarding to you know the pressures.

As we discussed previously currently were launched hunting full 0.0 version and you know over the last several years, we have been consistently upgrading hunting Brent and we believe you know the 4.0 should be a relatively immature products.

From the new hotels to the older hotels.

As I said previously.

We noticed that and especially our observation internally that so you know those hunting.

Okay self not only probably not only in China, but also.

2.0 to five version and below.

Globally, and I know in terms of its designs hotel quality should it be at the leading position in stuff that you're leveraging on our strong capability from the supply chain, because it's creating a much lower capex lower OPEC and a shorter construction and also a better performance.

The biggest pressure in terms of the Revpar performance.

And it probably going to take you know we're not two years to solve this problem because it's because of the large basis over the past 20 years.

However, we are very glad to see you know the new signings for.

In regarding to you know the pressures.

The hunting Brent actually in this year has been very very strong. So there are two major things that we're going to choose one is we keep signing new contracts and opening new hotels in.

From the new hotels to the older hotels.

As I said previously.

We noticed that and especially you know.

Our observation internally that so you know those hunting.

And different area, but also you know we have to do some of the major substitutions.

2.0 to five version and below.

The biggest pressure in terms of the Revpar performance.

So by using the new product to replace the older products or continuously upgrading the existing hotels to improve the competitiveness I think Glenn you since you're away from calling contingent element sedans.

Jason Chen: We are probably going to take one or two years to solve this problem because of the large basis over the past 20 years. However, we are very glad to see the new signings for the HanTing brand actually in this year has been very, very strong. There are two major things that we are going to do. One is we keep signing new contracts and opening new hotels in different areas, but also we have to do some of the major substitutions by using the new products to replace the old products or continuously upgrading the existing hotel to improve the competitiveness. Thank you. 关于Orange Hotel和IntercityHotel, 我也很高兴跟大家谈谈我们这两个非常强势的品牌。Orange Hotel在经历了这个3.0产品的发布之后, 应该讲整个市场表现越来越好。Orange Hotel我们是希望能成为和HanTing Hotel背靠背的中档酒店的这个主力的市场品牌。我们希望HanTing Hotel和Orange Hotel能成为中国酒店业的数一数二的这个价目上的选择。目前Orange Hotel刚刚突破1,000家门店。我们很高兴看到HanTing Hotel品牌连管道签约管道我们在中国已经有超过4,000家门店。我想Orange Hotel的这背靠背的含义就是我们希望能成为第二个HanTing Hotel品牌, 成为整个市场的毫无争议的第二选择。所以Orange Hotel正在往这个方向努力。关于IntercityHotel, 我也想很高兴跟大家分享一下IntercityHotel的这个目前的发展。IntercityHotel的确通过这两年的产品研发和运营的提升, 我们今年上半年IntercityHotel的同店RevPAR是中国应该讲唯一的增长的品牌。我们实现了不仅仅是规模的增长, 在快速规模签约增长和开店增长的前提下, 我们的同店RevPAR还实现了增长。因而毫无疑问, 我们IntercityHotel希望通过未来三年、五年也能成为中国在中高端酒店的这个领导者品牌, 领导者品牌, 这是我们的目标。所以为此我们正在展开全面的努力, 尤其在一些核心城市的标杆物业, 我们希望通过IntercityHotel来迅速树立中国全新一代中高端的旗舰产品。因为正好中国的房地产也给我们这种机会, 市场供应出很多优质的原来的假期写字楼和优质的原来四五星酒店的存量资产, 给到我们IntercityHotel这样的一个品牌来实现新的发展。因而我认为IntercityHotel代表的中高端的产品线在中国引领了未来中高端的新标准, 所以我们对IntercityHotel发展也充满了信心.

And are we at.

It's probably going to take you know we're not two years to solve this problem because it's because of the large basis over the past 20 years.

Chelsea diplomat Jeez Jimmy the.

But however, we are very glad to see you know the new signings.

Sending an example in the public school age out.

For the hunting Brent actually in this year has been very very strong. So there are two major things that we're going to chewy is one is we keep signing new contracts and opening new hotels in <unk>.

Uh huh.

Yeah.

Due to them as she won in some way Shinji being paid.

Sundar Julien.

The two leaders.

And different area, but also we have to do some of the major substitutions.

Unless you want to change it so that you can in some way it's onboard.

Judy any of this.

To the gentleman on the Haynesville.

By using the new product to replace the older products or continuously upgrading the existing hotels to improve competitiveness I think Glenn you.

<unk> got two bleaching Hammond here.

Women and girls in kind of the change in the in Guangdong to bundle them and said some wage and you're told West Virginia Monday.

<unk> got him contingent upon how long the freeze on channels of the company.

Uh huh.

To pick up at the high end do you assume a shoe on and some with yoga train diplomat, some weights and glasses on but how would they need at the auctions.

Jesus.

Two the ascending example upwards.

Yeah.

Uh huh.

She doesn't want to give up on hand since then.

Uh huh.

Due to this issue on in some ways Shinji being paid.

Quite LNG, Croatia ongoing indefinitely I guess Angie this is <unk>.

Sundar Jordan.

And the fact that <unk> hung over to Daniel.

The two leaders who's on the panel unless you are changing so that you can in some way with <unk> Suisse.

10 P M.

The main entities.

Well I'm a genius sometime in <unk>.

Jonathan the Haynesville.

<unk> got two bleaching Hammond here.

Okay shall we either tender underpin that.

Women and girls in kind of the change in Guangdong.

Unless agenda.

It's equivalent at Enzo closer Green Machines' cut into 19 T shirt one minute.

One of the elements that some of the <unk> cohort and Shin Young India.

Oh Jeez did it pick up at the high end you saw Ms. Sheila and some with yogurt change you can put some weights and glasses on to how we're thinking that the auction to see Jesus once you're up on hand since then.

So Janet syndrome.

Oh, you elements in tissue encore.

With us and you know when yet in internally towards modern Jordan.

Linda.

Quite LNG.

To zoom into mobile so you with women's and that's in Khartoum into newly Gucci the issue of collisions and sued the bill and.

Ongoing.

Yes, Angie this is a once in a five to 10 GB cheer Congress.

And by that mean entities in our Medina sometime in <unk>.

Unless you are towards Ngls shoes, whose foodie.

<unk> that's another one that you didn't have.

Okay shall we either.

Sundar.

Hum.

So unless agenda.

He said it gave them towards <unk>.

Putting these equivalent at Enzo price agreement with Chinas cut into 19 T shallow, let Tony Hi, Suzanna syndrome.

Queensland.

The judge has the local yards that you're going to assume that somehow.

So now that since that date all women.

<unk> you want to go.

2018 by less this year signify that you're working with.

With ethane you haven't yet and until <unk> two within the city.

And he died but it's more than that time is yet that's one where you need the weather to modern as she goes.

Linda.

Other than that to sue them in a mobile format and that's on page him into newly Gucci the issue of collisions and said that bill can.

Women 25 to amendment sushi.

Okay in terms of our Orange brand in intercity brands I'm very happy to share something with you in terms of the Orange brand after launching the three points zero version, we have been gaining a lot of traction from the franchisee as customers and we want the orange brand become.

Unless you are towards <unk>.

<unk>, that's one word on that <unk>.

It's funny.

Lisa you gave them towards us.

Since our Queens, who can do what you'd said that you're going to have a judge as the local yards that you're going to ask Susan you there.

<unk> a back to back the brands for <unk> Hotel.

This is a data element.

And we just achieved a.

And she's had 18 BIOLASE as yet signify that you know, we're going with that but it's more than that time is yet.

A milestone for the Orange brand recently and in terms of the GE Hotel. Currently you know the hotel you appreciate any pipeline putting them together has been already exceed.

You mean, the way that some other than that she doesn't see women through its <unk> Its amendment Susan.

Jason Chen: In terms of our Orange Hotel brand and the IntercityHotel brand, I am very happy to share something with you. In terms of the Orange Hotel brand, after launching the 3.0 version, we have been getting a lot of tractions from the franchisee and customers. We want the Orange Hotel brand to become a back-to-back brand for HanTing Hotel. We just achieved a 1,000 milestone for the Orange Hotel brand recently. In terms of the HanTing Hotel, currently the hotel in operation and in pipeline putting them together has already exceeded around 4,000 hotels. We definitely hope the Orange Hotel could be the second growth driver in our midscale segment. Together with HanTing Hotel, to become a number one and a number two hotel brands in the midscale segment for the overall market.

Exceeded around 4000 hotels. So we definitely hope you know the Orange hotel could be the second growth driver in the.

Okay.

Herself or Orange, Brian and Intercity brands I'm very happy to share something with you in terms of the Orange brand.

In our Middle School segment.

After launching industrial pointing zero version, we have been getting a lot of traction from the franchisee as customers and we want the Orange brand becomes a back to back the brands for Qi Hotel and.

Together with G Hotel should become a number one and number two.

Sure.

L brands in the Middle scale segment for the overall market.

And in terms of the intercity hotel because of the high quality.

And we just achieved a.

Milestone for the Orange, France recently and in terms of the G. Hotel. Currently you know the hotel you appreciate any pipeline putting them together has been already exceeds.

<unk> brand and product positioning.

We have been achieving a quite rapid.

Of this interest in the hotel over the past several quarters.

Exceeded around 4000 hotels. So we definitely hope you know the Orange hotel could be the second growth driver.

Hum.

More importantly, you know intra city achieved.

The positive growth.

In terms of the like for like.

In our Middle School segment.

Same hotel Revpar in the second quarter, which was properly.

Together with G Hotel should become a number one and number two.

Quite less other brands can't achieve.

No.

Hotel brands in the Middle scale segment for the overall market.

The positive Revpar growth therefore in the next probably three to five years. So we definitely want our intercity brand to become a leading brand in the upper Midscale segment and because of we are also taking the benefits from.

Jason Chen: In terms of the IntercityHotel, because of the high quality and the very accurate brand and products positioning, we have been achieving a quite rapid development of this IntercityHotel over the past several quarters. More importantly, IntercityHotel achieved the positive growth in terms of the like-for-like or same hotel RevPAR in the second quarter, which is probably quite less other brands can achieve the positive RevPAR growth. Therefore, in the next probably three to five years, we definitely want our IntercityHotel brand to become a leading brand in the upper-midscale segment. Because we are also taking the benefits from the weakness of the real estate market because we do see a lot of A-grade office building has been out in the market, especially in the tier one to tier two cities, in some of the prime locations.

And in terms of the interest in the hotel because of the high quality.

<unk> brand and product positioning.

We have been achieving a quite rapid.

A lot of interest in the hotel over the past several quarters.

Weakness of the real estate market, because we do see a lot of you know a great office building has been out for all in the market, especially in the tier one to tier two cities in some of the prime locations.

And more importantly, intra city achieved.

The positive growth.

In terms of the like for like.

Naturally, creating all give us a lot of opportunity to Butte, a very nice and high quality hotel product and it's going to be a new standard or <unk>, new general interest if you're gonna be unused under our new generation.

Our same hotel revpar in the second quarter, which was properly.

Quite less other brands can't achieve.

The positive Revpar growth.

Therefore in the next probably three to five years. So we definitely want our intercity brand to become a leading brand in the upper mid scale segment.

Our new definition of the upcoming.

Ms segment.

<unk>, even near future. Thank you.

And because of we are also taking the benefits from.

Weakness of the real estate market, because we do see a lot of you know a great office building has been out for all the market, especially in the tier one tier two cities in some of the prime locations that definitely creating all give us a lot of you have the opportunity to Butte, a very nice.

Thank you.

We will take our next question.

Your next question comes from the line of <unk> from.

C. ICC. Please go ahead your line is open.

Jason Chen: That definitely creating or gives us a lot of opportunity to build a very nice and high-quality hotel product. It is going to be a new standard or a new generation. IntercityHotel is going to be a new standard and new generation, or a new definition of the upcoming upper-midscale segment hotel in the near future. Thank you.

So as everybody is well.

You didn't answer Sheila.

And in parts of Asia.

And high quality hotel product and it's gonna be.

Yeah, no it's okay.

New stand up a new generation interested you're gonna be unused and a new generation.

Okay.

Let me hit your shot.

Uh huh.

Thanks Sachin.

Without the Basel.

Our new definition of the upcoming you know.

Yes, you hit the ice you said that you're looking at.

MS segment hotel in the near future. Thank you.

Well I wish I could take this one.

If you can take both of them wound up with that foundation.

Hui Jin: Thank you. We will take our next question. Your next question comes from the line of Xilin from CICC. Please go ahead. Your line is open.

Yeah.

Thank you.

Thank you management I have two questions. The first is on the supply chain.

We will take our next question.

Your next question comes from the line of <unk> from <unk>.

So how do we escape.

Supply chain capability in detail could you.

C. ICC. Please go ahead your line is open.

Explain more about that.

To what extent are these contribute to future decrease of operating costs.

Heidi: 谢谢管理层。我有两个问题，一个呢，就是我们的这个供应链能力，因为这一块确实是咱们华住很引领这个行业的。那可不可以为我们深入讲一下，就是这块是实现了哪些提升，然后对未来的运营成本下降有多大的帮助。然后第二个呢，是关于 DH，就是 DH 一直在做这个轻资产化嘛，那未来的这个轻资产化的这个节奏是怎么样的。我再翻译成英文。Thank you, management. I have two questions. The first is on the supply chain. How do we strengthen our supply chain capability in detail? Could you explain more about this? To what extent will this contribute to future decrease of operating costs? My second question is about DH. What will be the pace of the future shift towards asset-light model for DH? Thank you.

So as everybody is well well along <unk>.

<unk>.

And the second question is about D edge.

So what will be the pace of the future shift towards asset light model for the edge. Thank you.

Yeah.

Sure.

With two quarters. She she is eliminated.

They will either use them, but generally or without a bond to gallons I misquoted. Yes. So you said that so we can take questions now.

Otherwise, we can quibble with ice airplane going yeah regarding the differences, though hard to blame Ya how's it going and some real hard to close because you've got the Nevada another human needs.

Well I wish I could take this one.

As you can see it goes with the Wanda.

With that foundation.

Women predominant cheeses.

So thank you management I have two questions. The first is on the supply chain.

What would you agree with Watson go quadrupling in bits and pieces.

So how do we strengthen our supply chain capability in detail could you.

A woman to Angola quota or treat whole pool since all three.

More about that and to what extent where are these contribute to future decrease of operating costs.

<unk>.

Jonathan.

And my second question is about the edge.

Hum.

Jonathan do you have the timing switch <unk>, Belgium.

So what will be the pace of the future shift towards asset light model for the edge. Thank you.

Teachers didn't give them yet.

Congrats again.

Jason Chen: World Group Limited实现可持续高质量发展的核心能力之一。我们不断的, 其实在2024年开始, H World Group Limited就规划整个H World Group Limited供应链的整体升级。我们通过了扩大中国最头部制造业企业, 最头部企业的合作, 加深这个中国头部企业的合作, 增加了很多优化的产品设计、升级质量标准、审核体系等等方面, 来实现了更高质量的产品、更低的营建和运营成本、更短的营建工期。我给出几个具体的数据。目前在家具、软装、运营物资、基础建材等采购成本上, 我们同比已经实现了10%到20%的区间的降幅。在营建周期上, 以HanTing Hotel为例, HanTing 4.0的模组化生产可以帮助营建周期缩短30天。显而易见, 整个强大的供应链使得H World Group Limited在未来在总成本和效率, 成本领先上面能助力H World Group Limited在整个酒店业处于一个领先的这样的竞争优势。In terms of our supply chain capability, obviously, as we always said, the supply chain capability becomes a very core competency for us to maintain or to achieve a high quality, long-term, sustainable growth. Since 2024, we have been comprehensively upgrading our supply chain capability, mainly through enlarging and attracting a lot of top-tier suppliers and corporations with them, and closely, as well as increasing more modularization application and optimizing some of the product design and increase the quality standard and the reviewing system as well, in order to achieve a higher quality product and a lower CapEx and OpEx, as well as shorter construction periods. I can share with you some of the data.

Couldn't be doing Jim.

Although messaging with ice airplane going regarding the differences, though hard to blame Ya <unk> and some real hard to see him because you've got enough other no human needs.

Oh, you mean something couldn't run the delinquency.

Workers, which are treated as fujairah.

<unk> George you're right.

Hum.

<unk> and tables have myself woman told me. He says you know and this is the Earth.

A woman predominate cheeses Arden alright.

So would you agree with lots and lots of quoting in bits and pieces.

So as you're introducing the Joseph.

A woman to Angola.

The Indians, which is up.

What are two or three tool pool since all three tall boots.

Pending the module Hudson's and credit bonds.

In June two chiefs with uncertainty.

Jonathan.

Challenging.

And Jonathan do you want.

It's a good chunk of other clean and should go hard to tell where that that timber.

The timing switch <unk>, Belgium, some guarantees you didn't give them yet <unk>.

Shown somebody and somebody into the hospital and graduating triggered each in the news.

Couldn't be the engine.

Means in Queensland.

<unk> delinquency.

Judy the Suzhou <unk> charge.

In terms of our supply chain capability.

Sure.

Obviously as we always said you know the supply chain capability. It becomes a very core competency for us to maintain or to achieve.

G to genpact and tables and myself.

Toby.

As you know and this is the first.

So as you're introducing the Joseph a.

Our high quality long term sustainable growth.

England, So which is up <unk>.

With the pending merger lessons and K bonds.

Since 2024, we have been comprehensively upgrading our supply chain capability.

So cheese with uncertainty.

She orange yet.

Many through enlarging and attracting a lot of you know top tier suppliers and cooperations with them.

It's a good chunk of either Green as you go through with that.

<unk> timber.

So somebody is nominal.

And Ah closely as well as you know.

And Judy Hodges, graduating triggered each in.

Increasing more modernization application and optimizing some of the products design and increase the quality standards and are reviewing system as well.

Each of the news.

In terms of our supply chain capability.

Obviously as we always said you know the supply chain capability becomes a very core competency for us to maintain or to achieve.

To achieve a higher quality products and the lower capex and opex as well as shorter construction period.

Our high quality long term sustainable growth.

I can't share with you some of the data.

Since 2024, we have been comprehensively upgrading our supply chain capability.

Now in terms of for example, foreign insurers in the furnishing our you know the consumables some basic material and we have achieved around 10, 210%, 20% caused a decline on a year over year basis and also in terms of the construction periods are taking hunting for.

Many through enlarging and attracting a lot of top tier suppliers and cooperations with them.

And Ah closely as well as you know.

Increasing our modulus Asian application and optimizing some of the products design and increase the quality standards and are reviewing system as well in order to achieve a higher quality products and the lower capex and opex as well as shorter construction period.

Zero as an example, because we are applying a more modernization and.

That actually helped the construction period for hunting for zero products.

By 30 days, therefore, you know the strong.

The strong and are strengthening the supply chain capability, but there definitely help our.

Jason Chen: As of now, in terms of, for example, furniture and furnishing, the consumables, some basic material, we have achieved around 10% to 20% cost of decline on a year-over-year basis. Also in terms of the construction periods, taking HanTing 4.0 as an example, because we are applying a more modularization, that actually helped the construction period for HanTing 4.0 products by 30 days. Therefore, the strong and the strengthening supply chain capability could definitely help our, help us to grow in a longer term with definitely a cost of leadership and as well as the high efficiency. Thank you.

I can't share with you some of the data.

Now in terms of for example, foreign interests and furnishing.

Help us to grow.

In the longer term with definitely a cost a leadership and as well as the high efficiency. Thank you.

The consumables some basic material and we have a shift around 10 to 10% to 20% cost decline on a year over year basis and also in terms of the construction periods are taking crunching 4.0. Ethane example, because we are applying a more modularized nation.

Yeah.

This is a key home.

Th asset light.

This is Martin.

Pelican Lake.

That actually helped the construction period for hunting 4.0 products.

In Europe, especially in Germany, Central Europe, the legal requirement.

By 30 days therefore.

It's not as easy to resolve any.

Police contract. So we are.

They're strong.

Strong and are strengthening the.

Working hard on discussing and negotiating with the landlord.

The supply chain capability, but it definitely helped our.

Help us to grow.

Not everything all the time.

Out exactly as we expected.

In the longer term, we it's definitely a cost a leadership and as well as the high efficiency. Thank you.

We continue to try this out.

We are continuously screening the profitability of our lease hotels, especially for low performing or nonperforming hotels.

Yeah.

Jihong He: This is Jihong He. I can address the DH asset-light business model and the development. In Europe, especially in Germany or Central Europe, the legal requirement is not as easy to dissolve any lease contract. So we are working hard on discussing and negotiating with the landlord. Not everything would turn out exactly as we expected, so we continue to try this out. We are continuously screening the profitability of our lease hotels, especially for low-performing or non-performing hotels. We are constantly engaged in a discussion. We cannot disclose anything yet, but some of the lease negotiation and some of the change of the lease are in the works. We will report as soon as we have any information about that. In the future, we are also trying very hard to go on asset-light model. We are very, very careful in signing any potential lease contracts.

Yeah.

This is a key home.

Dressed th asset light.

We are constantly.

Constantly engaged in a discussion.

This is model.

Pelican Lake.

In Europe, especially in Germany, Central Europe, the legal requirement.

And we cannot disclose anything yet, but we and some of the lease negotiation and if some of that.

It's not as easy to resolve any.

Change of the lease.

Police contract. So we are.

We will report as.

Working hard on discussing and negotiating with the landlord.

Soon as we have any information about that.

And in the future. We are also trying very hard to go asset light model.

Not everything will turn out exactly as we expected.

So we continue to try this out.

And we are very very careful.

We are continuously screening the profitability of our leased hotels.

In signing any potential lease contract.

<unk> for low performing or nonperforming hotels.

We really need to look at it.

And it's a commitment and also the lead time.

That time as well.

Thompson to engage in a discussion.

And we cannot disclose anything yet.

And some of the lease negotiation and if some of that.

Thank you. This concludes today's question and answer session I will now hand back to you Jason Chen for closing remarks.

Change of the lease.

We will report as soon as we have any information about that.

Thank you everyone for taking your time with US today, and we look forward to see you in upcoming quarter. Thank you and bye bye.

And in the future. We are also trying very hard to go asset light model.

This concludes today's conference call. Thank you for participating you may now disconnect.

And we are very very careful.

In signing any potential lease contracts.

Jihong He: We really need to look at the commitment and also the return in the longer term as well.

We really need to look at it.

And it's a commitment and also can we tie in to look at that time as well.

Hui Jin: Thank you. This concludes today's question and answer session. I will now hand back to Jason Chen for closing remarks.

Thank you. This concludes today's question and answer session I will now hand back to Jason Chen for closing remarks.

Jason Chen: Thank you, everyone, for taking your time with us today. We look forward to seeing you in the upcoming quarter. Thank you, and bye-bye.

Thank you everyone for taking your time with US today, and we look forward to see you in upcoming quarter. Thank you and bye bye.

Hui Jin: This concludes today's conference call. Thank you for participating. You may now disconnect.

This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

Okay.

[music].

Okay.

Okay.

[music].

Thank you.