Q4 2025 H World Group Ltd Earnings Call
Operator 1: Good day, and thank you for standing by. Welcome to the H World Q4 and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Ivy. Please go ahead.
Speaker #2: Good day, and thank you for joining. Welcome to the H World Q4 and Full Year 2025 Earnings Conference Call. At this time, all participants are in listen-only mode.
Speaker #2: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone.
Speaker #2: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised today’s conference is being recorded.
Speaker #2: We'd now like to hand the conference over to your first speaker today, Ivy. Please go ahead.
Speaker #3: Thank you. Good morning and good evening, everyone. Thanks for joining us today. Welcome to H World Group 2025 Fourth Quarter and Full Year Earnings Conference Call.
Ivy: Thank you. Good morning and good evening, everyone. Thanks for joining us today. Welcome to H World Group 2025 Q4 and full year earnings conference call. Joining us today is our founder and executive chairman, Mr. Qi Ji, our CEO, Mr. Jin Hui, our CFO, Ms. Hui Chen, 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 Provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with SEC. H World Group does not take...
Speaker #3: Joining us today are our Founder and Executive Chairman, Mr. Ji Qi; our CEO, Mr. Jin Hui; our CFO, Mr. Chen Hui; and our CSO, Ms. He Jihong.
Speaker #3: Following their prepared remarks, management will be available to answer your questions. Before we continue, please note that the discussion today will include forward-looking statements made under the Safe Harbor Provisions of the United States Private Securities Litigation Reform Act of 1995.
Speaker #3: Forward-looking statements involving current risk and uncertainties. As such our results may be materially different from the views expressed today. A number of potential risk and uncertainties are outlining our public filings with the SEC.
Speaker #3: H World Group does not undertake any obligation to update any forward-looking statements except as required under applicable laws. On the call today, we will also mention adjusted financial measures during the discussion of our performance.
Jin Hui: Undertake any obligation to update any forward-looking statements except as required under applicable laws. On the call today, we will also mention adjusted financial measures during the discussion of our performance. Reconciliation of those measures to comparable GAAP information can be found in our earnings release that was distributed early today. As a reminder, this conference call is being recorded. The webcast 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. Jin Hui, to discuss our business performance in the Q4 and full year of 2025. Mr. Jin, please. Dear investors and analysts, good day. Thank you for joining H World Q4 and full year of 2025 earnings call. First, I'd like to share some observations on the overall travel market.
Speaker #3: Reconciliation of those measures to comparable GAAP information can be found in our earnings release that was distributed earlier today. As a reminder, this conference call is being recorded.
Speaker #3: The webcast 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. Jin Hui to discuss our business performance in the Fourth Quarter and Full Year of 2025.
Speaker #3: Mr. Jin please.
Speaker #4: 各位投资人分析师大家好 感谢大家参加华主集团2025年第四季度及全年业绩电话会议。首先我想就整体出行市场的观察做一个简单的分享。2025年国内居民出行旅游需求已从阶段性复苏转为常态化刚需。铁路航空及出行人次等数据显示整体出行需求保持稳健增长。出游人次与消费规模稳步提升。大众对美好生活的向往持续升温。随着交通网络不断完善住宿需求加速从核心城市向县域及乡镇延伸。下沉市场成为文旅消费新增长极。越级消费体验式消费文旅沿展演体育赛事等新业态新消费火热推动住宿需求向多元化品质化升级。当前行业仍面临低质量同质化供给过剩而高性价比高品质供给不足的问题。供给侧改革仍是行业发展主旋律这一位本土头部连锁酒店带来了广阔的发展机遇。
Speaker #3: Dear investors and analysts, good day. Thank you for joining H World's Fourth Quarter and Full Year 2025 Earnings Call. First, I'd like to share some observations on the overall travel market.
Jin Hui: Demand for travel is gradually shifting from discretionary demand to necessity for Chinese consumers. Data from railway, aviation, and tourism all indicate a steadily growing travel demand in China. The number of trips, as well as consumer spending, continues rising as people increasingly pursue a better life. As China's transportation network improves, accommodation needs quickly expanded from major cities to county-level markets, making the lower-tier city a new growth engine for tourism consumption. Strong demand for self-pleasure and experiential consumption, together with booming tourism events, exhibitions, and sports competitions, are driving the diversification and quality upgrades of accommodation needs.
Speaker #3: Demand for travel is gradually shifting from discretionary demand to necessity for Chinese consumers. Data from railway, aviation, and tourism all indicate a steadily growing travel demand in China.
Speaker #3: The number of trips as well as consumer spending continues rising. As people increasingly pursue a better life. As China's transportation network improves accommodation needs quickly expanded from major cities to county-level markets.
Speaker #3: Making the lower-tier city a new growth engine for tourism consumption. Strong demand for self-pleasure and experiential consumption, together with booming tourism events, exhibitions, and sports competitions, are driving the diversification and quality upgrades of accommodation needs.
Speaker #3: However, China's hotel industry still faces an oversupply of low-quality and homogeneous products, while high-quality, value-for-money supply remains insufficient. Therefore, supply-side reform will remain the main theme of future industry development, and this will undoubtedly bring tremendous growth opportunities for the leading domestic branded hotel groups like H World.
Jin Hui: However, China's hotel industry still faces oversupply of low quality and homogeneous products, while high quality value for money supply remains insufficient. Therefore, supply side reform will remain the main theme of future industry development, and this will undoubtedly bring tremendous growth opportunities for the leading domestic branded hotel groups like Huazhu.
Speaker #4: 华主在深耕主业推动高质量发展的同时积极履行社会责任实现企业价值与社会价值协同发展。公司始终聚焦经济型与国民中道酒店赛道打造高性价比产品为广大消费者提供安全舒适清零的住宿服务。依托品牌与供应链优势盘活存量闲置资产提升城市配套水平与资产运营效益。同时持续布局低线城市及乡镇市场补齐下沉市场优质住宿短板创造稳定就业岗位带动周边产业发展。激活地方夜间季展望未来华柱将继续深耕中国市场坚持高质量发展以品牌为引领以服务为核心把中国酒店业重新做一遍。
Jin Hui: 华住在深耕主业、推动高质量发展的同时，积极履行社会责任，实现企业价值与社会价值协同发展。公司始终聚焦经济型与国民中档酒店赛道，打造高性价比产品，为广大消费者提供安全、舒适、亲民的住宿服务，依托品牌与供应链优势，盘活存量闲置资产，提升城市配套水平与资产运营效益。同时持续布局低线城市及乡镇市场，补齐下沉市场优质住宿短板，创造稳定就业岗位，带动周边产业发展，激活地方夜经济。展望未来，华住将继续深耕中国市场，坚持高质量发展，以品牌为引领，以服务为核心，把中国酒店业重新做一遍。
Jin Hui: While focusing our core business and driving high-quality growth, we also actively fulfill our social responsibilities to achieve a coordinated development of corporate value and social value. We focus on economy and mid-scale segments which serve the mass market. We develop good value for money products to provide consumers with safe, cozy, and affordable accommodation. Leveraging our brand value and supply chain capability, we revitalize idle assets, enhance urban supporting services, and boost asset operation efficiency. In addition, we keep expanding into the lower-tier cities and rural areas, filling the gap in quality accommodation in those markets. We create stable employment opportunities, drive the development of the surrounding industries, and boost local night economy. Looking ahead, we will continue deepening our roots in the China market, pursuing high-quality growth and delivering service excellence with a brand-led approach to redo China's hotel industry.
Speaker #3: While focusing on our core business and driving high-quality growth we also actively fulfill our social responsibilities to achieve a coordinated development of corporate value and social value.
Speaker #3: We focus on the economy and mid-scale segments, which serve the mass market. We develop good value-for-money products to provide consumers with safe, cozy, and affordable accommodation.
Speaker #3: Leveraging our brand value and supply chain capability, we revitalize idle assets, enhance urban supporting services, and boost asset operation efficiency. In addition, we keep expanding into the lower-tier cities and rural areas.
Speaker #3: Filling the gap in quality accommodation in those markets, we create stable employment opportunities, drive the development of the surrounding industries, and boost the local night economy.
Speaker #3: Looking ahead we will continue deepening our roots in the China market pursuing high-quality growth and delivering service excellence with the brand-led approach to redo China's hotel industry.
Speaker #4: 二零二五年华柱继续推进以品牌引领下的高质量发展。在规模布局盈利表现品牌建设及会员生态搭建等方面均收获了稳健的经营成果。我们欣喜地看到依托精益化收益管理综合营销能力提升以及产品及服务质量的不断升级我们在维持OCC相对稳定的基础上推动ADR逐季修复。四季度REPA实现了自二零二四年二季度以来的首次同比正增长。二零二五年全年ADR也保持同比基本持平的良好态势。
Jin Hui: 2025年，华住继续推进以品牌引领下的高质量发展，在规模布局、盈利表现、品牌建设及会员生态搭建等方面均收获了稳健的经营成果。我们欣喜地看到，依托精益化收益管理、综合营销能力提升以及产品及服务质量的不断升级，我们在维持OCC相对稳定的基础上，推动ADR逐季修复。四季度RevPAR实现了自2024年二季度以来的首次同比正增长。2025年全年ADR也保持同比基本持平的良好态势。
Jin Hui: In 2025, Huazhu remained committed to brand-led high-quality development, and we delivered solid business results across network expansion, profitability, brand building, and membership ecosystem development. We are pleased to see that supported by refined revenue management, enhanced sales and marketing capabilities, and ongoing upgrades of our product and services, we kept occupancy rate stable while driving ADR recovery quarter by quarter. For Q4, we achieved positive year-over-year RevPAR growth for the first time since Q2 2024. Our full-year 2025 ADR remained largely flat year-over-year.
Speaker #3: In 2025, H World remained committed to brand-led, high-quality development, and we delivered solid business results across network expansion, profitability, brand building, and membership ecosystem development.
Speaker #3: We are pleased to see that, supported by refined revenue management, enhanced sales and marketing capabilities, and ongoing upgrades to our products and services, we kept occupancy rates stable while driving ADR recovery quarter by quarter.
Speaker #3: For the fourth quarter, we achieved positive year-over-year REPA growth for the first time since the second quarter of 2024. Our full-year 2025 ADR remained largely flat year-over-year.
Speaker #4: 与此同时华柱凭借更区域市场的持续突破低线城市的深度渗透实现了全年高质量网络的扩张再营房量同比增加百分之十六点二的驱动下集团酒店GMV同比增长百分之十六点四至一千零八十一亿元。伴随全国网络布局持续完善华柱会运营能力不断升级华柱会员预订兼业持续增长二零二五年会员预订兼业突破两点四五亿间同比增长百分之二十一点五。
Jin Hui: 与此同时，华住凭借更广区域市场的持续突破，低线城市的深度渗透，实现了全年高质量网络的扩张。在营房量同比增加16.2%的驱动下，集团酒店GMV同比增长16.4%，至人民币1,080亿元。伴随全国网络布局持续完善，华住会运营能力不断升级，华住会员预订间夜持续增长，2025年会员预订间夜突破2.45亿间，同比增长21.5%。
Jin Hui: By breaking through in new cities and regions and further penetrating in the lower tier cities, we achieved another year of high quality network expansion. Driven by a 16.2% year-over-year increase in the number of rooms in operation, our group hotel GMV grew 16.4% year-over-year to RMB 108.1 billion. Meanwhile, along with our network expansion and continuous enhancement of H Rewards membership program, room nights sold to members rose 21.5% year-over-year, exceeding 245 million in 2025.
Speaker #3: By breaking through in new cities and regions and further penetrating in the lower-tier cities we achieved another year of high-quality network expansion. Driven by a sixteen point two percent year-over-year increase in the number of rooms in operation our group hotel GMV grew sixteen point four percent year-over-year to RMB one hundred and eight point one billion.
Speaker #3: Meanwhile along with our network expansion and the continuous enhancement of H World membership program room nights sold to members rose twenty-one point five percent year-over-year exceeding two hundred and forty-five million in twenty twenty-five.
Speaker #4: 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稳健增长二零二五年加盟收入同比提升百分之二十三点一至一百十七亿元经营毛利同比增长百分之二十点八至七十六亿元。
Jin Hui: 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稳健增长。2025年加盟收入同比提升23.1%，至117亿元。经营毛利同比增长20.8%，至76亿元。
Jin Hui: More importantly, our asset-light monetization and franchise business delivered solid growth in its hotel network revenue as well as profit. Our full year 2025 group M&F revenue rose 23.1% year-over-year to RMB 11.7 billion. The group M&F gross operating profit increased by 20.8% year-over-year to RMB 7.6 billion.
Speaker #3: More importantly our asset-like monetized and franchise business delivered solid growth in its hotel network revenue as well as profit. Our four-year twenty twenty-five group M&F revenue rose twenty-three point one percent year-over-year to RMB eleven point seven billion.
Speaker #3: The group M&F gross operating profit increased by twenty point eight percent year-over-year to RMB seven point six billion.
Jin Hui: 在酒店网络布局上，华住坚持以经济型国民中档酒店为核心，深耕大众市场，持续夯实核心品牌竞争力。我们通过升级核心品牌，优化以客户为中心的服务体系，持续提升酒店网络运营指标与品牌影响力，助力集团实现长期稳定的可持续发展。截止2025年末，汉庭、全季、桔子三大核心有限服务品牌的新版本门店占比得到进一步提升。
Speaker #4: 在酒店网络布局上华柱坚持以经济型国民中档酒店为核心深耕大众市场持续夯实核心品牌竞争力。我们通过升级核心品牌优化以客户为中心的服务体系持续提升酒店网络运营质量与品牌影响力助力集团实现长期稳健的可持续发展截止二零二五年末汉庭全季橘子三大核心有限服务品牌的新版本门店占比得到进一步提升。
Jin Hui: In terms of hotel network expansion, we remain steadfast in focusing on economy and midscale hotel segments to serve the mass market, and strengthening our core brand competitiveness. By continuously upgrading our core products and enhancing our service excellence with a customer-centric principle, we improved the operational quality of our hotel portfolio and strengthen our brand value, which help the group to achieve long-term sustainable growth. By the end of 2025, the proportion of new versions of the three core limited service brands, namely HanTing, JI, and Orange, has raised further.
Speaker #3: In terms of hotel network expansion, we remain steadfast in focusing on economy and mid-scale hotel segments to serve the mass market and strengthening our core brand competitiveness.
Speaker #3: By continuously upgrading our core products and enhancing our service excellence with the customer-centric principle, we improved the operational quality of our hotel portfolio and strengthened our brand value, which helped the group to achieve long-term sustainable growth.
Speaker #3: By the end of 2025, the proportion of new versions of the three core limited service brands, namely Hanting, G, and Orange, has raised further.
Speaker #4: 为进一步完善下沉市场布局纯化原有汉庭酒店品牌贴合大众出行刚需我们推出汉庭快捷品牌汉庭快捷主打高性价比与品质平衡我们创新推出多人间家庭房等产品覆盖家庭出行团队出行等细分场景填补经济型酒店市场空白同时搭搭配华掌柜自助入住自助洗衣等智能服务兼顾住客体验与运营效率汉庭快捷承担汉庭品牌纯化的重要使命进一步加速品牌与产品迭代升级为消费者提供更优质的住宿体验依托轻快省盈的改造模式为老版本汉庭的加盟商提供轻改造快施工成本低盈利稳的又以重要选择。
Jin Hui: 为进一步完善下沉市场布局，存化原有汉庭酒店品牌，贴合大众出行刚需，我们推出汉庭快捷品牌。汉庭快捷主打高性价比与品质平衡。我们创新推出多人间、家庭房等产品，覆盖家庭出行、团队出行等细分场景，填补经济型酒店市场空白。同时搭配华掌柜自助入住、自助洗衣等智能服务，兼顾住客体验与运营效率。汉庭快捷承担汉庭品牌存化的重要使命，进一步加速品牌与产品迭代升级，为消费者提供更优质的住宿体验。依托轻、快、省、赢的改造模式，为老版本汉庭的加盟商提供轻改造、快施工、成本低、盈利稳的优异重要选择。
Jin Hui: To further expand our footprint in the lower tier markets, advance HanTing brand purification, and meet the diversified travel needs of consumers, we have launched the HanTing Yin brand. HanTing Yin strikes a perfect balance between cost-effectiveness and quality. We have rolled out innovative room types such as multi-bedroom and family rooms, catering to the growing scenarios such as family trips and group travel, and filling in the missing piece in the economy hotel market. In addition, we have integrated smart services such as self check-in and self-service laundry facility, balancing guest experience and operational efficiency. Also, HanTing Yin plays a vital role in HanTing brand purification, helping accelerate brand and product upgrades to deliver better lodging experience for our guests.
Speaker #3: To further expand our footprint in the lower-tier market, advance Hanting brand purification, and meet the diversified travel needs of consumers, we have launched the Hanting Ying brand. Hanting Ying strikes a perfect balance between cost effectiveness and quality. We have rolled out innovative room types, such as multi-bedrooms and family rooms, catering to the growing scenarios such as family trips and group travel, and filling in the missing piece in the economy hotel market. In addition, we have integrated smart services such as self-check-in and self-service laundry facilities, balancing guest experience and operational efficiency. Also, Hanting Ying plays a vital role in Hanting brand purification, helping accelerate brand and product upgrades to deliver a better lodging experience for our guests. Supported by our light, fast, economical, profitable renovation model, Hanting Ying offers franchisees who operate older Hanting hotels another great option, which has light refurbishment, quick construction, low cost, and certain profitability.
Jin Hui: Supported by our light, fast, economical, profitable renovation model, HanTing INN offers franchisees who operate older HanTing hotels another great option which has light refurbishment, quick construction, low cost, and certain profitability.
Speaker #4: 与此同时华柱中高端板块坚持多品牌发展战略通过清晰的品牌定位与价值主张稳步推进沉寂全季大关水晶及美居四大核心品牌的发展截至二零二五年末集团中高端品牌再营及管道内店已突破一千六百三十九家同比增长百分之十七点六其中核心品牌沉寂再营门店突破一百家凭借清晰定位优质产品与良好经营表现已成为华柱在中高端赛道的核心增长动力之一。
Jin Hui: 与此同时，华住中高端板块坚持多品牌发展战略，通过清晰的品牌定位与价值主张，稳步推进陈季、全季、大关、水晶及美居四大核心品牌的发展。截至2025年末，集团中高端品牌在营及管道内店突破1639家，同比增长14.6%。其中核心品牌陈季在营门店突破100家，凭借清晰定位、优质产品与良好经营表现，已成为华住在中高端赛道的核心增长动力之一。
Speaker #3: Meanwhile for our upper mid-scale segment we stick to our multi-brand approach backed by clear brand positioning and value propositions we are steadily pushing forward the development of four key brands in this segment which are Intercity Brand G Crystal and Mercure as of end twenty twenty-five the number of our upper mid-scale hotels in operation and in pipeline exceeded one thousand six hundred and thirty-nine up seventeen point six percent year-over-year among them our core brand Intercity hit the milestone of over a hundred operating hotels with its clear brand positioning exceptional product quality and strong operational performance Intercity has become one of the core growth drivers for our upper mid-scale segment.
Jin Hui: Meanwhile, for our upper midscale segment, we stick to our multi-brand approach. Backed by clear brand positioning and value propositions, we are steadily pushing forward the development of four key brands in this segment, which are Intercity, JI, Crystal, and Mercure. As of end 2025, the number of our upper midscale hotels in operation and in pipeline exceeded 1,639, up 17.6% year-over-year. Among them, our core brand, Intercity, hit the milestone of over 100 operating hotels. With its clear brand positioning, exceptional product quality, and strong operational performance, Intercity has become one of the core growth drivers for our upper midscale segment.
Speaker #4: 在营销方面我们始终坚持以华柱会为核心会员体系及直销能力是支撑公司业务长期可持续发展的重要核心竞争力随着华柱酒店网络覆盖更多的城市我们的会员体量及会员贡献的经验量都实现稳步增长同时公司积极布局自媒体等新兴社交渠道强化入境市场进一步拓宽获客场景提升会员转换效率。
Jin Hui: 在营销方面，我们始终坚持以华住会员为核心，会员体系及直销能力是支撑公司业务长期可持续发展的重要核心竞争力。随着华住酒店网络覆盖更多的城市，我们的会员体量及会员贡献的经营量都实现稳步增长。同时，公司积极布局自媒体等新兴社交渠道，强化入境市场，进一步拓宽获客场景，提升会员转换效率。
Speaker #3: We always focus on strengthening our direct sales capability through each reward membership program which are vital to our sustainable long-term business growth as we expand our hotel network to cover more cities our membership base and the room night booked by members both achieve robust growth meanwhile we are also proactively exploring cooperation with new sales and marketing channels such as self-media to boost our presence in the inbound travel market to further broaden customer acquisition scenarios and to enhance membership conversion efficiency.
Jin Hui: We always focus on strengthening our direct sales capabilities through H Rewards membership program, which are vital to our sustainable long term business growth. As we expand our hotel network to cover more cities, our membership base and the room night booked by members both achieved robust growth. Meanwhile, we are also proactively exploring cooperation with new sales and marketing channels such as self-media, to boost our presence in the inbound travel market, to further broaden customer acquisition scenarios, and to enhance membership conversion efficiency.
Speaker #4: 最后展望二零二六年华柱将继续坚持以品牌为引领的精益增长持续夯实营销能力以及更加积极开放的姿态拥抱科技创新用科技赋能酒店实体运营同时全力提升客户体验加盟商投资回报与经营效益推动集团稳步向千层万变二点零的战略目标前进。
Jin Hui: 最后展望2026年，华住将继续坚持以品牌为引领的经营增长，持续夯实营销能力，以及更加积极开放的姿态，拥抱科技创新，用科技赋能酒店实体运营，同时全力提升客户体验、加盟商投资回报与经营效益，推动集团稳步向千城万店二点零的战略目标前进。
Jin Hui: Lastly, looking ahead into 2026, Huazhu will continue to pursue brand led high quality growth, keep strengthening our sales and marketing capabilities, and embrace tech innovation with a more open and proactive mindset to leverage technology to power our on-ground hotel operations. At the same time, we will continue to enhance customer experience, to improve operational efficiency, and investment returns for franchisees, steadily working our way to our strategic goal of 2,000 cities, 20,000 hotels.
Speaker #3: Lastly, looking ahead into 2026, H World will continue to pursue brand-led, high-quality growth, keep strengthening our sales and marketing capabilities, and embrace tech innovation with a more open and proactive mindset to leverage technology to power our underground hotel operations. At the same time, we will continue to enhance customer experience and improve operational efficiency and investment return for franchisees, steadily working our way to our strategic goal of 2,000 cities and 20,000 hotels.
Speaker #4: 以上就是华柱中国二零二五年四季度及全年的业务情况分析下面有请CSO何继宏为大家介绍DH二零二五年四季度及全年的业务情况有请继宏。
Jin Hui: 以上就是华住中国2025年四季度及全年的业务情况分析。下面有请CSO何继红为大家介绍DH 2025年四季度及全年的业务情况。有请继红。
Jin Hui: All above concludes the 2025 operational update for Legacy-Huazhu. Now, I will hand over the call to our CSO, Ms. Jihong He, to give an update on Legacy-DH.
Speaker #3: All above concludes the twenty twenty-five operational update for Laxi华柱 now I will hand over the call to our CSO Miss何继宏 to give an update on Laxi DH。
Jihong He: Thank you, Jin Hui. We are very happy to report that in 2025 we made a successful business turnaround for our Legacy-DH business. We achieved a record level of adjusted EBITDA of around RMB 500 million. This is a significant improvement compared to the last situation last year. The strong performance confirms the successful execution of the business transformation plan. Hotel business cannot achieve profitability without revenue enhancement. Our RevPAR continued to grow and achieved 8.2% increase year-on-year in 2025. Despite a challenging market environment, Legacy-DH succeeded in stabilizing like-for-like hotel revenues. We adjusted the revenue management strategy for different categories of a hotel and worked relentlessly on property level sales performance improvement. Through disciplined efficiency programs, we significantly reduced the Legacy-DH cost base and streamlined the operations.
Speaker #2: Thank you Jin Hui we are very happy to report that in twenty twenty-five we had a successful business turnaround for our legacy DH business we achieved a record level of adjusted EBITDA of around five hundred million renminbi this is a significant improvement compared to the last situation last year the strong performance confirms the successful execution of the business transformation plan hotel business cannot achieve profitability without a revenue enhancement our respawn continued to grow and achieved eight point two percent increase year on year in twenty twenty-five despite a challenging market environment legacy DH succeeded in stabilizing like-for-like hotel revenues we adjusted the revenue management strategy for different categories of our hotel and worked relentlessly on property-level sales performance improvement through disciplined efficiency programs we significantly reduced the DH cost base and streamlined the operations following a successful restructuring of headquarter and reduction of administrative cost at the end of twenty twenty-four and early twenty twenty-five the management team continued to implement ongoing cost optimization measures across personnel external services and supply chain throughout the organization at the same time with numerous restructuring efforts ongoing we have been able to maintain the organizational and operational stability ensuring a solid foundation for a sustainable future performance another important measure we successfully undertook in twenty twenty-five was the optimization of our hotel portfolio we renegotiated lease terms of many hotels exited several loss-making properties and transformed a portfolio of lease hotels into asset-like structure this portfolio restructuring significantly enhanced our profitability and improved resilience of our business as everybody everyone remembers H World acquired Deutsche Hospitality shortly before COVID breakout our business was thrown into an unprecedented challenging environment we did not give up instead we started our transformation journey and brought our expertise globally this shows the resilience of H World Group going forward in twenty twenty-six we will continue to build on the momentum and enhance our performance continuous improvement of commercial and operational effectiveness across brands is our first priority we are undertaking concrete measures to improve our marketing and sales across different target markets and adjust our revenue management strategy for different segments at the same time we will further leverage synergies from integration with H World Group we are working on closer integration from different aspects such as supply chain design and construction technology and the loyalty program in twenty twenty-six we're expected to see more benefit from these synergies and operational level another strategic initiative will continue to undertake in twenty twenty-six is to sharpen our brand positioning for example we're developing intercity next generation to make it a more more guest-friendly and operational efficient with the new brand proposition we expect to roll out our business model to the market and accelerate growth of our network together with our partners across the region in the years to come with this as I conclude the discussion in legacy DH business I will turn to our CSO Miss Chen Hui for financial performance review
Jihong He: Following a successful restructuring of headquarters and reduction of administrative costs at the end of 2024 and early 2025, the management team continued to implement ongoing cost optimization measures across personnel, external services, and supply chain throughout the organization. At the same time, with numerous restructuring efforts ongoing, we have been able to maintain the organizational and operational stability, ensuring a solid foundation for sustainable future performance. Another important measure we successfully undertook in 2025 was the optimization of our hotel portfolio. We renegotiated the lease terms of many hotels, exited several loss-making properties, and transformed a portfolio of lease hotels into asset-light structure. This portfolio restructuring significantly enhanced our profitability and improved resilience of our business. As everyone remembers, Huazhu acquired Deutsche Hospitality shortly before COVID outbreak. Our business was thrown into an unprecedented challenging environment. We did not give up.
Jihong He: Instead, we started our transformation journey and brought our expertise globally. This shows the resilience of Huazhu Group. Going forward, in 2026, we will continue to build on the momentum and enhance our performance. Continuous improvement of commercial and operational effectiveness across brands is our first priority. We're undertaking concrete measures to improve our marketing and sales across different target markets and adjust our revenue management strategy for different segments. At the same time, we will further leverage synergies from integration with Huazhu Group. We are working on closer integration from different aspects such as supply chain, design and construction, technology, and the loyalty program. In 2026, we're expected to see more benefit from these synergies on operational level. Another strategic initiative we'll continue to undertake in 2026 is to sharpen our brand positioning.
Jihong He: For example, we're developing Intercity Next Generation to make it more guest friendly and operationally efficient. With the new brand proposition, we expect to roll out our business model to the market and accelerate growth of a network together with our partners across the region in the years to come. With this, I conclude the discussion in Legacy-DH business. I will turn to our CFO, Ms. Hui Chen, for financial performance review.
Speaker #3: Thank you Jihong for the union and good morning everyone let me walk you through our four-year twenty twenty-five financial overview in twenty twenty-five our group revenue grew five point nine percent year over year to R&D twenty-five point three billion at the high end of our guidance of which legacy Hua Zhu's revenue rose by seven point nine percent year over year to R&D twenty point five billion the top-line growth was driven by our high-quality network expansion and stabilized river park performance group adjusted EBITDA increased twenty-four point two percent year year over year to R&D eight point five billion with margin improved by four point nine percentage points year over year to thirty-three point five percent the strong profit growth and profit margin expansion were mainly attributable to further enlarged profit contribution from our high-margin asset-like business as well as the operation improvement and the cost savings from legacy DH adjusted net income increased by thirty-two point nine percent year over year to R&D four point nine billion looking into our asset-like manufacturing franchise business in twenty twenty-five powered by the network expansion of manufacturing hotels our manufacturing franchise revenue increased by a robust twenty-three point one percent year over year to R&D eleven point seven billion and the manufacturing franchise gross operating profit rose by twenty point eight percent year over year to R&D seven point six billion profit contribution from our manufacturing franchise business rose steadily and reached sixty-nine percent in twenty twenty-five representing a five percentage point year over year increase in the four-year of twenty twenty-five we generated R&D eight point four billion operating cash flow and at the end of twenty twenty-five the group had R&D fifteen point four billion cash and cash equivalent and R&D nine point six billion net cash on the balance sheet with support of our strong cash flow and a healthy balance sheet we are glad to declare a US dollar four hundred million cash dividend for the second half of twenty twenty-five together with US dollar two hundred fifty million interim dividend and around US dollar one hundred ten million share purchases our total shareholder return amounted to around US dollar seven hundred sixty million for the four-year of twenty twenty-five in twenty twenty-four we announced the US dollar.
Hui Chen: Thank you, Jihong. Good evening and good morning, everyone. Let me walk you through our full year 2025 financial overview.
Hui Chen: In 2025, our group revenue grew 5.9% year-over-year to RMB 25.3 billion. At the high end of our guidance, of which Legacy-Huazhu's revenue rose by 7.9% year-over-year to RMB 20.5 billion. The top-line growth was driven by our high-quality network expansion and stabilized RevPAR performance. Group adjusted EBITDA increased 24.2% year-over-year to RMB 8.5 billion, with margin improved by 4.9 percentage points year-over-year to 33.5%. The strong profit growth and profit margin expansion were mainly attributable to further enlarged profit contribution from our high-margin satellite business, as well as the operation improvement and the cost savings from Legacy-DH. Adjusted net income increased by 32.9% year-over-year to RMB 4.9 billion. Looking into our satellite managed and franchised business.
Hui Chen: In 2025, powered by the network expansion of managed hotels, our managed and franchised revenue increased by a robust 23.1% year-over-year to RMB 11.7 billion. The managed and franchised gross operating profit rose by 20.8% year-over-year to RMB 7.6 billion. Profit contribution from our managed and franchised business rose steadily and reached 69% in 2025, representing a 5 percentage point year-over-year increase. In the full year of 2025, we generated RMB 8.4 billion operating cash flow. At end of 2025, the group had RMB 15.4 billion cash and cash equivalent and RMB 9.6 billion net cash on the balance sheet.
Hui Chen: With support of our strong cash flow and a healthy balance sheet, we are glad to declare a $400 million cash dividend for the second half of 2025. Together with $250 million interim dividend and around $110 million share repurchases, our total shareholder return amounted to around $760 million for the full year of 2025. In 2024, we announced a $2 billion, three-year total shareholder return plan. We have now completed over 75% of this three-year plan, and we are committed to continuously returning to our shareholders. Lastly, our guidance for the full year of 2026. We expect our group revenue to grow 2% to 6% year-over-year, and 5% to 9% if excluding DH.
Speaker #3: Billion three-year total shareholder return plan we have now completed over seven five percent of this three-year plan and we are committed to continuously returning to our shareholders lastly on our guidance for the four-year of twenty twenty-six we expect our group revenue to grow two percent to six percent year over year and five percent to nine percent if excluding DH and we expect our manufacturing franchise revenue to grow twelve percent to sixteen percent year over year in terms of unit growth we are expecting to open two thousand and two hundred to two thousand two and three hundred hotels in twenty twenty-six and to close six hundred to seven hundred hotels for the same year this represents a twelve percent year over year hotel network growth with that we conclude our financial review for the four-year of twenty twenty-five today I will step down as CFO and missed other you will take the CFO role of H World I would like to take this opportunity to thank all the investors and the analysts for your continued support for H World I will still be serving as the chief compliance officer of the company and together with our team we will ensure stable financial management and a smooth transition we are certain that other with his expertise and vision will help drive our financial strategy and support our growth trajectory together the team we are lead H World to its next success I will now turn the call to Mr. Assa please
Hui Chen: We expect our managed and franchised revenue to grow 12% to 16% year-over-year. In terms of unit growth, we are expecting to open 2,200 to 2,300 hotels in 2026, and to close 600 to 700 hotels for the same year. This represents a 12% year-over-year hotel network growth. With that, we conclude our financial review for the full year of 2025. Today, I will step down as CFO, and Mr. Arthur Yu will take the CFO role of H World. I would like to take this opportunity to thank all the investors and the analysts for your continuous support for H World. I will still be serving as the Chief Compliance Officer of the company. Together with our team, we will ensure stable financial management and a smooth transition.
Hui Chen: We are certain that Arthur, with his expertise and vision, will help drive our financial strategy and support our growth trajectory. Together, the team will lead H World to its next success. I will now turn the call to Mr. Arthur Yu. Arthur, please.
Arthur Yu: Okay. Thank you, Hui, for the kind introduction. Hello, everyone, and thank you for joining the call today. It is a privilege to step into the role of CFO at such a pivotal moment for H World. I have long admired the company's resilience and its strong market position.
Speaker #2: Okay, thank you, Hui, for the kind introduction. Hello everyone, and thank you for joining the call today. It is a privilege to step into the role of CFO at such a pivotal moment for H World. I have long admired the company's resilience and its strong market position. As we look ahead, my priorities will be to build a world-class finance function.
Arthur Yu: As we look ahead, my priorities will be to build a world-class finance function, maintain rigorous control and investment oversight, and ensure transparent and consistent communications with the capital markets. I look forward to getting to know many of you individually in the days ahead. We are now ready to open the floor for questions.
Speaker #1: We maintained rigorous control and investment oversight, and ensured transparent and consistent communications with the capital market. I look forward to getting to know many of you individually in the days ahead, and we are now ready to open the floor for questions.
Operator 1: Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Thank you. Our first question today is from Dan Chi from Morgan Stanley. Please go ahead.
Speaker #2: Thank you. I'll ask a question. You will need to press star one and one on your telephone and wait for your name to be announced.
Speaker #2: To withdraw your question, please press star one and then one again. Thank you. Our first question today is from Dan Chee from Morgan Stanley.
Speaker #2: Please go ahead
Dan Chi: Thank you management for the opportunity to ask the first question. I would like to congratulations to Arthur on the new role, and we have seen a list of credentials of Arthur's expertise. For starters, can management share very briefly the direction of Arthur's new role? What kind of changes shall we expect on our financial and growth strategy? Thank you.
Speaker #3: Oh , good We Arthur Arthur , how I announcement Arthur . The UK Arthur . How Are you function Will . Fine . Thank you .
Speaker #3: Management , for the opportunity to ask the first question . I would like to . Congratulations to Arthur's on the new role . And we have seen the list of credentials of Arthur's expertise .
Speaker #3: So for starters , can management share very briefly the direction of Arthur's new role and what kind of changes shall we expect on our financial and growth strategy ?
Speaker #3: Thank you
Speaker #4: Jinghui Zenghui The When key We For To Shinkansen Can . Arthur In the .
Jin Hui: Thank you, Dan, for your question. Firstly, I would like to take this opportunity to thank Ms. Hui Chen for her dedication to the company in the past 20 years. We just had our 20 years anniversary, investor day last year. We can see that over the 20 years with our founding team, we have built Huazhu into a very successful company. At the conference last year, while we concluded and summarized our, the achievement that we've made in the past 20 years, we also take the opportunity to look ahead. We had the vision that we wanna create Huazhu, create H World into a global company, into a world-class company, and to work into the world and to become a leading company in China and in globally.
Speaker #5: Are . Thank you , Dan , for your question . Firstly , I want to take . I would like to take this opportunity to thank Miss Jihong He for her dedication to the company in the past 20 years .
Speaker #5: We just had our 20-year anniversary on Investor Day last year. We can see that over the 20 years with our founding team, we have built Huazhu into a very successful company.
Speaker #5: At the conference last year , while we concluded and summarized our achievements that we've made in the past 20 years , we also take the opportunity to look ahead We had the vision that we want to create Huadu and create a world into a global company , into a world class company , and to work into the world and to become a leading company in China and in globally .
Jin Hui: With this vision, and, as Huazhu is growing really into a hyperscale company, we really need world-class management, professional talent, to bring those really diversified and international, talent and skills to our management team. I welcome Arthur to joining H World. We are certain that Mr. Arthur Yu with his deep financial management, expertise and together with the team we will lead H World, to at the next stage and to achieve the next success. Thank you, Dan.
Speaker #5: So with this vision , and as with growing really into hyperscale company , we really need world class management , professional talent to bring those really diversified and international talents and skills to our management team So I welcome Arthur to join H World Group and we are certain that , Mr. Arthur , you with his deep financial management expertise and together with the team , we will lead H world to the next stage and to achieve the next success
Speaker #4: That
Speaker #5: Thank you Dan
Dan Chi: Yes.
Operator 1: Thank you. We will now take the next question. Next question is from Ronald Leung from Bank of America. Please go ahead.
Speaker #2: Thank you. We will now take the next question. The next question is from Ronald Leung from Bank of America. Please go ahead.
Ronald Leung: Let me ask my question in English. Regarding the 2 to 6 revenue guidance, what is the implied RevPAR expectations? And also could management comment?
Speaker #3: How are author Ming Zhao earning the women in the rough part of UTR system earning, C A. Let me ask my question.
Speaker #3: In English . So regarding the 226 revenue guidance . So what is the implied rough part ? Expectations . And also could management comment on the overall demand supply outlook for 226 .
Ronald Leung: On the overall demand supply outlook for 2026. How is the supply growth trend? How is the overall demand for the business and leisure travel? Thank you very much.
Speaker #3: How's the supply growth trend . And also how's the overall demand for the business and leisure travel ? Thank you very much
Jin Hui: 好的，是金辉，我来回答这个问题。在过去的三个月不到时间，我们感受到中国整个酒店行业的这个趋势是逐步向好。在需求方面，应该讲在过去几年，以文旅休闲这样的一个需求一直在稳步的增长，大家也关注到入境市场的增长也在快速提升。应该讲整个需求还是处于一个稳步提升的状态。商务市场呢，我们也感受到触底反弹的迹象，尤其在中国的一二线核心城市，我们感受到了趋势的明朗和向好。所以总体来讲，华住对2026年的整体RevPAR是持有谨慎乐观的态度，我们期待华住隐含的2026年的同比RevPAR是实现微小的正增长，这个目标我们是成为集团的管理和目标。
Speaker #4: Hello The The Venue The . To the The The The The title To the . The Way . We . A
Jin Hui: Thank you, Ronald. In the past three months, we have observed that China's hotel industry trend is actually recovering. On the demand side, we have been observing that actually in the past one to two years, the leisure travel has been growing really steadily. Also the inbound travel is recovering and coming back. Overall demand is growing, for leisure especially.
Speaker #5: Thank you . Rana So in the past three months , we have observed that the China's hotel industry trend is actually recovering . On the demand side , we have been observing that actually in the past 1 to 2 years , the leisure travel have been growing really steadily .
Speaker #5: And also the inbound travel is recovering and coming back . So overall demand is growing for leisure , especially and for business travel demand .
Jin Hui: For business travel demand, we have also seen that business activity and business travel has bottomed and also going on to upward trend, especially in the Tier 1 and Tier 2 cities. For 2026, we are cautiously optimistic on the overall RevPAR performance. For the management and for the company, we do have the target that to deliver a flat to slightly year-over-year increase for the full year 2026 RevPAR. Thank you.
Speaker #5: We have also seen that business activity and business travel have bottomed and are now on an upward trend, especially in the tier-one and tier-two cities.
Speaker #5: So for 2026 , we are cautiously optimistic on the overall report performance . And for the management and for the company . We do have the target that to deliver a flat to slightly year over year increase for the full year 2026 .
Speaker #5: Read . Thank you
Operator 2: Thank you. We will now take the next question. This is from Simon Cheung from Goldman Sachs. Please go ahead.
Speaker #2: Thank you We will now take the next question This is from Simon Chung from Goldman Sachs . Please go ahead
Simon Cheung: 谢谢金总、何总跟陈总刚才的分享，也恭喜阿帕。我有一个小小的问题想追问，是那个开店的节奏的问题吧。上一年你开店挺猛的，两千四百多个店，那今年有什么规划，以及因为你最近也有新推出一些新的品牌吧，比如说那个HanTing Hotel的品牌，那有没有说什么计划，这个品牌今年以及未来几年大概那个店数会开到多少个店呢？就这个问题吧。那我用英语再翻译一下吧。The question is in relation to the hotel opening, the pace of hotel opening last year.
Speaker #6: Zhong , how are we The the Song sung in the By the In Also , the . The . Now . Your By the way , I , I Do not know .
Speaker #6: I translate . The question is in relation to the hotel opening the pace of hotel opening last year . The company has achieved a whole lot in terms of the growth exceeded 2004 2400 store opening last year .
Simon Cheung: The company has achieved a whole lot in terms of growth, exceeded 2,400 store openings last year, wondering whether they would have any change in their pace or expectations for this year, in particular, we notice that they have some new hotel brand, for example, the HanTing brand, I'm wondering whether they would have any targets for this brand as well. Thank you.
Speaker #6: I'm wondering whether they would have any change in their pace or expectations for this year . In particular . We noticed that they have some new hotel brand , for example , the hunting in brand and wondering whether they would have any target for , for , for this brand as well .
Speaker #6: Thank you
Jin Hui: 好，我来回答一下这个关于发展的问题。我们在2025年录得了应该是华住历史上开业最多的一年，我们整个开业门店超过2,400家。其实在2023年开始，华住就调整了我们发展的策略，我们希望华住质量优先于规模的精益发展战略。所以过去两年，华住始终坚持高质量的发展路径。我们预期在精益增长的战略指导下，华住的总体新增门店、开业门店依然会保持一个高位区间，我们披露了大概在2,200家至2,300家的预测开业数量，是符合现在市场和华住以精益发展战略为战略的这样的一个合理开店区间。所以进而在这个精益增长的大战略里面，我们非常有信心在2030年依然保持我们高质量的开出两万家好店的总体目标依然不变。
Speaker #4: I, the She, you know, the, the, the Cayman. Goal. The way we are holding the...
Jin Hui: Thank you, Simon. I will answer your question on the development. So as you can see, in 2025, we achieved a record high in the hotel growth openings exceeding 2,400 hotels. Actually, in 2023, we already adjusted our overall growth and development strategies of high quality, sustainable growth. What we are pursuing is not just the simple quantity, but also high quality of standard of the hotel network. In 2026, while under this high quality standard, we still expect to expand our hotel network, and maintain the overall openings at a high level. We guided to open 2,000 to 2,300 new hotels in 2026. This actually reflects our strategy of high quality, sustainable growth.
Speaker #5: Thank you . Simon and I will answer your question on the development . So as you can see , in 2025 , we achieved a record high in the hotel growth openings exceeding two 2400 hotels .
Speaker #5: Actually , in 2023 , we already adjusted our overall growth and development strategies of high quality , sustainable growth . So what we are pursuing is not just the simple quantity , but also high quality of standard of the hotel network .
Speaker #5: So in 2026 , while under this high quality standard , we still expect to to expand our hotel network and maintain the overall openings at a high level .
Speaker #5: And we guided to open 2200 to 2300 new hotels in 2026 . This actually reflects our strategy of high quality , sustainable growth , and we are still very confident that to achieve our 2000 hotel target , this strategic goal by 2023 , 2030 .
Jin Hui: We are still very confident that to achieve our 2,000 hotel target, this strategic goal by 2030. On your question on HanTing, I would like to share some thoughts on this HanTing brand, HanTing product. We always think that the economy sector is the core in China's consumer market, and this is also the core market for H World. What we wanna achieve is that we wanna achieve full coverage or the high market share in this economy sector. We are seeing more and more high quality properties that can be built into our HanTing brand.
Speaker #4: The Is the Fengxiang Is
Speaker #5: So . And on your question on hunting , I would like to share some thoughts on . On this hunting in brand hunting product .
Speaker #5: So we always think that the economy, the economic sector, is the core in China's consumer market. And this is also the core market for H World Group.
Speaker #5: What we want to achieve is that we want to achieve full coverage of high market share in this economy sector
Speaker #4: So, the—so for the full team,
Speaker #5: We are seeing . More and more high quality properties that can be built into our hunting brand . So now you can see that for our hunting branded hotels , the quality of it is much higher .
Jin Hui: Now we can see that for our HanTing branded hotels, the quality of it is much higher and the standard is also much higher compared to a couple years ago. With this we've introduced HanTing Ying, which can help us to cover and serve the overall mass market. We wanna stress that HanTing Ying and HanTing, they together are one brand, and HanTing will help us to cover the mass market in China. HanTing actually takes a very important role in upgrade and replace the older HanTing product and to further purify our HanTing brand. Thank you.
Speaker #5: And the standard is also much higher compared to a couple of years ago. So with this, we introduced hunting, which can help us to cover and serve the overall mass market.
Speaker #5: We want to stress that HanTing Yin and HanTing, together, they are one brand. And HanTing will help us to cover the mass market in China, and HanTing actually is taking a very important role in upgrading and replacing the older HanTing product, and to further purify our HanTing brand. Thank you.
Speaker #2: Thank you . We'll now take the next question Question is from Chen Chen from UBS . Please go ahead
Operator 2: Thank you. We'll now take the next question. Question is from Xin Chen from UBS. Please go ahead.
Speaker #6: With the Slides from the Digital Let me translate to English . My question is regarding date . Could management share for the details on the asset light transformation strategy and roadmap for this .
Xin Chen: Let me translate to English. My question is regarding DH. Could management share further details on the asset-light transformation strategy and the roadmap approach as well as the targets for future hotel network expansion and financial performance? Thanks.
Speaker #6: As well as the targets for future hotel network expansion and financial performance ? Thanks
Jihong He: Xin Chen, I will take your questions. Yes, you know, we achieved a turnaround of DH business in 2025. However, our efforts to improve business does not stop here, right? Our reorganization, efficient improvement, cost control will still remain as part of the ongoing management. We are also looking to our portfolio restructuring as well. We continue our effort in rental reduction, lease re-lease renegotiation, look into possibilities to exit loss-making properties, and also possibility to negotiate much better asset portfolio, right? Now that our business is stabilized, we are also indeed starting to look at development to expand our hotel network.
Speaker #7: I will take your questions. Yes, you know, we achieved the turnaround of the business in 2025. However, our efforts to improve the business do not stop here.
Speaker #7: Right? The reorganization, efficiency improvement, and cost control will still remain as part of the ongoing management. And we're also looking at our portfolio restructuring as well.
Speaker #7: We continue our efforts in rental reduction needs . Lease renegotiations look into possibilities to asset loss making properties and and also possibility to , to , to , to negotiate much , much better portfolio assets , asset portfolio , right .
Speaker #7: So now that our business is stabilized , we are also indeed starting to look at development to expand our hotel network . We have much more confidence now in managing international hotels .
Jihong He: We have much more confidence now in managing international hotels, and we believe limited service and select service hotels have really a lot of potential in overseas markets. Now that we are developing different business models, so we will have efficient, you know, for example, next generation IntercityHotel and Zleep for the basis of our growth. Of course, we also look into possibilities to expand Steigenberger hotels as well. Europe will remain our core international market, but at the same time we'll also explore, for example, Middle East, North Africa, where we already have good basis.
Speaker #7: And we believe limited service and selective service hotels have really a lot of potential in overseas markets . So now that we are developing different business models , so we efficient , you know , for example , next generation intercity and sleep for the basis of our growth .
Speaker #7: Of course , we also look into possibilities to expand Shanbag hotels as well . Europe will remain our core international markets , but at the same time , we are also explore , for example , Middle East , North Africa , where we already have good basis .
Speaker #7: So the legacy business, in a nutshell, is expected to remain profitable in the years to come.
Jihong He: The Legacy-Huazhu business, or in a nutshell, is expected to remain profitable in the years to come.
Speaker #2: Thank you . We will now take the next question This is from C Lin from c I c C . Please go ahead .
Operator 2: Thank you. We will now take the next question. This is from Celine Li from CICC. Please go ahead.
Celine Li: 谢谢管理层，也祝贺于总。我想问一个关于股东回报的问题，就是我们2025年的这个股东回报很丰厚，达到了这个$7.6亿美金，这个是超过了经调整净利润的100%。然后我们也已经完成了这个三年$20亿美金计划的超过四分之三。所以想问一下股东回报的一个后续的安排和规划。Thank you, management.
Speaker #8: Nuh Making So thank you . Management . Our shareholder return in 2025 achieved 760 million USD . Exceeding one 100% of adjusted net profit and has completed over 75% of USD 2 billion .
Celine Li: Our shareholder return in 2025 achieved $760 million, like exceeding 100% of adjusted net profit and has completed over 75% of $2 billion three-year shareholder return plan. What's our plan for the shareholder return in the upcoming years? Thank you.
Speaker #8: Three year shareholder return plan . So what's our plan for the shareholder return in the upcoming years ? Thank you
Hui Chen: Thank you. Yeah. This is Hui Chen. I'll answer your question on the shareholder return. Benefiting from our asset light strategy and our high quality growth, H World, we have generated very strong and stable cash flow, as well as we have a high quality and very healthy balance sheet. Going forward, we're committed to continue to return to shareholders through either dividends or share repurchase. Thank you.
Speaker #9: Jia, so Farhan, what are the numbers for your Q2?
Speaker #5: Thank you . This is Chonghui . I will answer your question on the shareholder return . So benefiting from our asset light strategy and our high quality growth , we have generated very strong and stable cash flow .
Speaker #5: As long as we have a high quality and very healthy balance sheet . So going forward , we will . We're committed to continue to return to shareholders through either dividend or share repurchase .
Speaker #5: Thank you
Speaker #2: Thank you. We'll now take our next question. This is from Lydia Ling from Siti. Please go ahead.
Operator 2: Thank you. We'll now take our next question. This is from Lydia Ling from Citi. Please go ahead.
Speaker #7: Hey you And thanks , management . Thanks for taking my questions . And I have questions on the upper mid hotel segment and which we saw like the further step of the development in 2025 .
Lydia Ling: 管理层好，感谢给我提问的机会。那我想跟进一下关于我们中高端的这个酒店的发展，那去年看到公司在中高端有进一步的发展，包括也推出了这个Grand Ji的品牌。那么也想问一下，在今年和包括未来长期的话，我们对于就是中高端的这个板块的一个规划，是否会加快整个的布局？Thanks, management, and thanks for taking my questions.
Lydia Ling: I have questions on the upper mid scale hotel segment and which we saw the further step of the development in 2025. What's your plan for this year or the longer term? Do you plan to have more aggressive or accelerated expansion in this segment? Thank you.
Speaker #7: So what's your plan for this year or the longer term ? And do you plan to have more aggressive or accelerate expansion in this segment ?
Speaker #7: Thank you
Jin Hui: 好的，谢谢。我来回答。对，中高端是华住目前战略聚焦的重点之一。中高端战略成为华住在过去两年及未来非常聚焦的一个市场。华住目前围绕着重点是在一二线城市展开多品牌的同时的发展，这跟其他公司还不太一样。我们同时发布了四个中高端的主力核心品牌，分别是全季、大观、橙季、水晶和美居。大家可以关注到我们这些品牌各有特色，有代表东方美学的生活方式的品牌，也有代表西方、德国的、法国的这个生活方式的品牌。我们希望通过多品牌的发展，能实现在中国中高端的从落后到赶超的这样的一个战略的发展和部署。为此，我们正在不断地发展我们的品牌，提升我们的产品，提升我们的服务能力。我们也很期待在未来，面向2030，使得华住在中高端市场一样成为中国的领导的这样的一个品牌管理公司，所以为此而在努力。所以中高端一定是华住未来的核心战略之一。谢谢。
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Jin Hui: Thank you, Lydia. I will take your question on the upper midscale segment. On the upper and upper midscale sector is one of H World's strategic focus. We have been focusing on this upper midscale market in the past two years, and we will continue to do so going into the future. Our strategy in the upper midscale segment is to focus on the tier one and tier two cities. We will developing this segment using a multi-brand strategy, which I think is different from the other companies. We have four key brands in this segment, which are JI Hotel, IntercityHotel, Crystal Orange Hotel, and Mercure. As you can see that these four brands, they actually, they all have different target market and they have different specialties.
Speaker #5: Thank you . Lydia . I will take your question on the upper segment . So the upper and upper mid scale sector is one of H world's strategic focus .
Speaker #5: So we . We have been focusing on this upper mid scale market in the past two years , and we will continue to do so going into the future .
Speaker #5: So our strategy in the upper mid scale segment is to focus on the tier one and tier two cities . And we will developing this segment using a multi-brand strategy , which I think is different from the other companies .
Speaker #5: So we have four key brands in this segment which are Grant , G , intercity , Crystal and Mercure . As you can see that these four brands , they actually they all have different target market and they have different specialties .
Speaker #5: So which covers the brand G , which is really presents the Oriental Authentics . And we also have the more Western design , like the intercity and the French style Mercure .
Jin Hui: Which covers the JI brand, which really presents the oriental authentic. We also have the more Western design, like the IntercityHotel and the French style Mercure. For using this multi-brand strategy, we really wanna chase ahead into this segment. We will continue to upgrade and enhance our product and the services. Our goal and our target is to, in the upper mid-scale sector, we also wanna become a leading brand by 2030. Upper mid-scale sector will be one of our core strategic focus going into the future. Thank you.
Speaker #5: So for the using this multi-brand strategy , we really want to think ahead this segment , we will continue to upgrade and enhance our product and services .
Speaker #5: Our goal and our target is to . In the upper mid sector , we also want to become a leading brand by 2030 .
Speaker #5: So, upper mid sector will be one of our core strategic focus areas going into the future.
Speaker #4: Thank you For to the Hui Jin in high To We Will See the
Jin Hui: Also to add on, as you can already see that for the IntercityHotel, over the past two years, it has become a very attractive and compelling brand in the upper mid-scale sector, whether it's in terms of its brand value, its product, its service excellence or its RevPAR. We have also introduced a Grand Ji hotel, and we really welcome you guys to look at Grand Ji, which is gonna have its grand opening on 1 April. It has a piloting phase already, but it hasn't really officially launched, and we officially open the Grand Ji on 1 April.
Speaker #5: And also to add on . As you can already see that . For the intercity . Over the past two years , it's becoming a very attractive and compelling brand in the upper mid scale sector , whether it's in terms of its brand value , it's product , its service excellence , or its wrapper .
Speaker #5: And we have also introduced a grand hotel. And we really welcome you guys to look into Grand G, which is going to have its grand opening in April.
Speaker #5: First , we it has a piloting phase already , but it hasn't really officially launched . And we officially opened the Grand G in April 1st .
Speaker #5: We are confident that with our four core brands in the upper mid scale sector , which all have different tastes and target market , we can become a leading company in the upper mid sector and we .
Jin Hui: We are confident that, with our four core brand in the upper mid-scale sector, which all have its different taste and target market, we can become a leading company in the upper mid-scale sector. We are also confident that each of our four key brands, they will become the leader in their own niche market. Thank you.
Speaker #5: We are also confident that each of our four key brands , they will become the leader in their . In their own niche market .
Speaker #5: you
Speaker #2: Thank you . I will now hand the conference back to the speakers for any closing remarks . Thank you
Operator 1: Thank you. I will now hand the conference back to the speakers for any closing remarks. Thank you.
Speaker #5: Thank you everyone for taking your time with us today . And this will conclude today's call . And we look forward to seeing you in the upcoming quarters .
Jin Hui: Thank you everyone for taking your time with us today, and this will conclude today's call, and we look forward to seeing you in the upcoming quarters. Bye.
Speaker #5: By
Operator 1: Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.