China Lodging Group, Limited (NASDAQ:HTHT) (“China Lodging Group”
or the “Company”), a leading and fast-growing multi-brand hotel
group in China, today announced its unaudited financial results for
the third quarter ended September 30, 2016.
Third Quarter 2016 Operational
Highlights
- During the third quarter of 2016, the Company added a net of 84
hotels, including the opening of 171 hotels and the closure of 87
hotels. As of September 30, 2016, the Company had 625 leased
(“leased-and-operated”) and owned hotels, 2,399 manachised
(“franchised-and-managed”) hotels, and 174 franchised hotels in
operation in 365 cities. As of September 30, 2016, the number of
hotel rooms in operation totaled 322,785, an increase of 22% from a
year ago.
- As of September 30, 2016, the Company had 23 leased hotels and
482 manachised and franchised hotels contracted or under
construction.
- The ADR, which is defined as the average daily rate for all
hotels in operation (excluding certain franchised Starway hotels),
was RMB194 in the third quarter of 2016, compared with RMB188 in
the third quarter of 2015 and RMB184 in the previous quarter. The
year-over-year increase of 3.6% was due to more favorable brand mix
with an increased proportion of midscale and upscale hotels in
operation. The sequential increase resulted mainly from
seasonality.
- The occupancy rate for all hotels in operation (excluding
certain franchised Starway hotels) was 88.9% in the third quarter
of 2016, compared with 89.2% in the third quarter of 2015 and 85.2%
in the previous quarter. The slight year-over-year decrease was
mainly due to lower occupancy of our new brands, and partially
offset by improved occupancy in mature hotels. The sequential
increase was mainly due to seasonality.
- RevPAR, defined as revenue per available room for all hotels in
operation (excluding certain franchised Starway hotels), was RMB173
in the third quarter of 2016, compared with RMB167 in the third
quarter of 2015 and RMB157 in the previous quarter. The
year-over-year increase of 3.2% was a result of higher ADR. The
sequential increase resulted mainly due to seasonality.
- For all hotels which had been in operation for at least 18
months (excluding certain franchised Starway hotels), the
same-hotel RevPAR was RMB172 for the third quarter of 2016,
representing a 0.5% increase from RMB171 for the third quarter of
2015, with a 0.4% increase in ADR and a 0.2-percentage-point
increase in occupancy rate. Excluding hotel rooms under renovations
for product upgrades, the normalized same-hotel RevPAR would show a
year-over-year increase of 0.9%. In the third quarter of 2016, the
midscale and upscale hotels registered a 7.5% same-hotel RevPAR
improvement, mainly driven by a 5.5% increase in ADR and a
1.6-percentage-point increase in occupancy rate.
- As of September 30, 2016, the Company’s loyalty program had
approximately 69 million members, who contributed about 79% of room
nights sold during the third quarter of 2016. In the third quarter
of 2016, approximately 88% of room nights were sold through the
Company’s own channels.
“We are encouraged by our accelerated blended RevPAR growth this
quarter. The year-over-year growth of 3.2% was fueled by the
improved blended RevPAR of HanTing hotels thanks to upgrade to
HanTing 2.0, coupled with continuously-growing demand for our
midscale hotels. In the third quarter, the blended RevPAR of
HanTing hotels increased by 0.4% year-over-year, with 30% of rooms
under HanTing 2.0 model. We will continue the upgrade program of
economy hotels in the next three years, so as to revitalize our
flagship brand to attract more customers and franchisees,” said Ms.
Jenny Zhang, Chief Executive Officer of China Lodging Group.
“In 2016, our focus remains on product quality.
In addition to our economy hotels upgrade program, we have also
strengthened the brand and operating standards for our existing
hotels by removing a number of hotels that failed to comply with
our standards. We have also increased the proportion of midscale
and upscale hotels in the portfolio. In the first nine months of
2016, midscale and upscale brands accounted for 27% of our net new
openings, and 39% of our pipeline as of September 30, 2016. We
believe our continued focus on quality and powerful brand portfolio
will lead to better operational performance and financial results
in the coming quarters,” Jenny added.
Third Quarter of 2016 Financial
Results
(RMB in thousands) |
Q3 2015 |
|
Q2 2016 |
|
Q3 2016 |
|
YoYchange |
QoQChange |
Revenues: |
|
|
|
|
|
|
|
|
Total revenues from Leased and
owned hotels |
|
1,374,492 |
|
|
|
1,329,736 |
|
|
1,390,334 |
|
|
1.2 |
% |
|
4.6 |
% |
Total revenues from Manachised and
franchised hotels |
|
318,864 |
|
|
|
351,831 |
|
|
373,239 |
|
|
17.1 |
% |
|
6.1 |
% |
Total revenues from Others |
|
- |
|
|
|
8,994 |
|
|
10,233 |
|
|
|
13.8 |
% |
Total revenues |
|
1,693,356 |
|
|
|
1,690,561 |
|
|
1,773,806 |
|
|
4.8 |
% |
|
4.9 |
% |
Less: business tax and
related surcharges |
|
(93,176 |
) |
|
|
(33,642 |
) |
|
- |
|
|
|
Net revenues |
|
1,600,180 |
|
|
|
1,656,919 |
|
|
1,773,806 |
|
|
10.9 |
% |
|
7.1 |
% |
Net revenues from leased and owned
hotels |
|
1,298,861 |
|
|
|
1,303,274 |
|
|
1,390,334 |
|
|
7.0 |
% |
|
6.7 |
% |
Net revenues from manachised and
franchised hotels |
|
301,319 |
|
|
|
344,830 |
|
|
373,239 |
|
|
23.9 |
% |
|
8.2 |
% |
Net revenues from others |
|
- |
|
|
|
8,815 |
|
|
10,233 |
|
|
|
16.1 |
% |
Note: Value-added tax ("VAT") has been implemented for
hospitality industry to replace business tax in China, effective
May 1, 2016. For comparison purpose, the net revenues for each
business in Q3 2015 and Q2 2016 are calculated with proportional
allocation of the business tax and related surcharges. |
|
Net revenues for the third
quarter of 2016 were RMB1,773.8 million (US$266.0 million),
representing a 10.9% year-over-year increase and a 7.1% sequential
increase. The year-over-year increase was primarily due to our
expanded hotel network and improved blended RevPAR. The sequential
increase was due to seasonality.
Net revenues from leased and owned
hotels for the third quarter of 2016 were RMB1,390.3
million (US$208.5 million), representing a 7.0% year-over-year
increase and a 6.7% sequential increase.
Net revenues from manachised and
franchised hotels for the third quarter of 2016 were
RMB373.2 million (US$56.0 million), representing a 23.9%
year-over-year increase and an 8.2% sequential increase. Net
revenues from manachised and franchised hotels accounted for 21.0%
of the Company’s net revenues in the third quarter of 2016,
increased from 18.8% a year ago.
Other revenues represent
revenues generated from other than hotel businesses, which mainly
include revenues from Hua Zhu mall and the provision of IT products
and services to hotels, totaling RMB10.2 million (US$1.5 million)
in the third quarter of 2016.
(RMB in thousands) |
Q3 2015 |
|
Q2 2016 |
|
Q3 2016 |
|
YoYchange |
QoQChange |
Operating costs
and expenses: |
|
|
|
|
|
|
|
|
Hotel operating costs |
1,166,759 |
|
1,217,412 |
|
1,249,701 |
|
|
7.1 |
% |
|
2.7 |
% |
Other operating costs |
- |
|
3,029 |
|
2,258 |
|
|
|
-25.5 |
% |
Selling and marketing expenses |
42,383 |
|
36,064 |
|
31,264 |
|
|
-26.2 |
% |
|
-13.3 |
% |
General and administrative
expenses |
101,426 |
|
118,868 |
|
123,233 |
|
|
21.5 |
% |
|
3.7 |
% |
Pre-opening expenses |
27,649 |
|
13,371 |
|
16,710 |
|
|
-39.6 |
% |
|
25.0 |
% |
Total operating costs
and expenses |
1,338,217 |
|
1,388,744 |
|
1,423,166 |
|
|
6.3 |
% |
|
2.5 |
% |
|
Hotel operating costs for the
third quarter of 2016 were RMB1,249.7 million (US$187.4 million),
compared to RMB1,166.8 million in the third quarter of 2015 and
RMB1,217.4 million in the previous quarter, representing a 7.1%
year-over-year increase and a 2.7% sequential increase. Total hotel
operating costs excluding share-based compensation expenses
(non-GAAP) for the third quarter of 2016 were RMB1,245.8 million
(US$186.8 million), representing 70.3% of net revenues, compared to
72.7% for the third quarter of 2015 and 73.3% for the previous
quarter. The year-over-year decrease in the percentage was mainly
attributable to the improved blended RevPAR and VAT deductions. The
sequential decrease in the percentage was mainly due to
seasonality.
Selling and marketing expenses
for the third quarter of 2016 were RMB31.3 million (US$4.7
million), compared to RMB42.4 million in the third quarter of 2015
and RMB36.1 million in the previous quarter. Selling and marketing
expenses excluding share-based compensation expenses (non-GAAP) for
the third quarter of 2016 were RMB31.0 million (US$4.7 million), or
1.8% of net revenues, compared to 2.6% for the third quarter of
2015 and 2.2% for the previous quarter. The year-over-year and
sequential decreases were mainly attributable to the adjustment
related to membership points cost in the third quarter of 2016.
General and administrative
expenses for the third quarter of 2016 were RMB123.2
million (US$18.5 million), compared to RMB101.4 million in the
third quarter of 2015 and RMB118.9 million in the previous quarter.
General and administrative expenses excluding share-based
compensation expenses (non-GAAP) for the third quarter of 2016 were
RMB115.5 million (US$17.3 million), representing 6.5% of net
revenues, compared with 5.7% of net revenues in the third quarter
of 2015 and 6.4% in the previous quarter. The year-over-year and
sequential increases was mainly due to increase in personnel costs
and professional fees.
Pre-opening expenses for the
third quarter of 2016 were RMB16.7 million (US$2.5 million),
representing a 39.6% year-over-year decrease and a 25.0% sequential
increase. The year-over-year decrease was mainly due to fewer
leased hotels opened and under construction in the third quarter of
2016. The sequential increase was mainly due to more leased hotels
opened and under construction in the third quarter of 2016.
Income from operations for the
third quarter of 2016 was RMB351.0 million (US$52.6 million),
compared to RMB281.7 million in the third quarter of 2015 and
RMB263.4 million in the previous quarter. Excluding share-based
compensation expenses, adjusted income from operations (non-GAAP)
for the third quarter of 2016 was RMB362.9 million (US$54.4
million), representing a 23.2% year-over-year increase and a 29.8%
sequential increase. The adjusted operating margin,defined as
adjusted income from operations (non-GAAP) as percentage of net
revenues, for the third quarter of 2016 was 20.4%, compared with
18.4% in the third quarter of 2015 and 16.9% in the previous
quarter. The improved year-over-year adjusted operating margin was
mainly due to improved blended RevPAR, lower pre-opening expenses
and VAT deductions. The sequential increase in the margin was
mainly due to seasonality.
Net income attributable to China Lodging
Group, Limited for the third quarter of 2016 was RMB293.9
million (US$44.1 million), compared to RMB223.6 million in the
third quarter of 2015 and RMB315.5 million in the previous quarter.
Excluding share-based compensation expenses, adjusted net income
attributable to China Lodging Group, Limited (non-GAAP) for the
third quarter of 2016 was RMB305.7 million (US$45.8 million),
representing a 29.2% year-over-year increase and a
7.9% sequential decrease. The year-over-year increase was mainly
due to the expanded hotel network, improved blended RevPAR and
lower pre-opening expenses. The sequential decrease was mainly due
to the one-off investment gain in the second quarter of 2016.
Basic and diluted earnings per
share/ADS. For the third quarter of 2016, basic
earnings per share were RMB1.06 (US$0.16) and diluted earnings per
share were RMB1.03 (US$0.15); basic earnings per ADS were RMB4.24
(US$0.64) and diluted earnings per ADS were RMB4.12 (US$0.62). For
the third quarter of 2016, excluding share-based compensation
expenses, adjusted basic earnings per share (non-GAAP) were RMB1.10
(US$0.17) and adjusted diluted earnings per share (non-GAAP) were
RMB1.07 (US$0.16); adjusted basic earnings per ADS (non-GAAP) were
RMB4.41 (US$0.66) and adjusted diluted earnings per ADS (non-GAAP)
were RMB4.28 (US$0.64).
EBITDA (non-GAAP) for the third
quarter of 2016 was RMB546.7 million (US$82.0 million), compared
with RMB451.9 million in the third quarter of 2015 and RMB556.0
million in the previous quarter. Excluding share-based compensation
expenses, adjusted EBITDA (non-GAAP) for the third quarter of 2016
was RMB558.5 million (US$83.8 million), representing a 20.2%
year-over-year increase and a 2.4% sequential decrease.
Cash flow. Operating cash
inflow for the third quarter of 2016 was RMB620.2 million (US$93.0
million). Investing cash inflow for the third quarter was RMB240.6
million (US$36.1 million).
Cash and cash equivalents and Restricted
cash. As of September 30, 2016, the Company had a total
balance of cash and cash equivalents, restricted cash of RMB3,004.0
million (US$450.5 million).
Debt financing. As of September
30, 2016, the Company had a short-term loan balance of RMB287.1
million (US$43.1 million) and the total credit facility available
to the Company was RMB550.0 million (US$82.5 million).
Guidance for Fourth Quarter of
2016The Company expects its net revenues to grow by 9%-11%
in the fourth quarter of 2016. For the full year of 2016, the
Company projects the growth rate to be within the range of
12.7%-13.3%. The above forecast reflects the Company’s current and
preliminary view, which is subject to change.
Conference CallChina Lodging
Group’s management will host a conference call at 8 p.m. ET,
Monday, November 14, 2016 (or 9 a.m. on Tuesday, November 15, 2016
in the Shanghai/Hong Kong time zone) following the announcement. To
participate in the event by telephone, please dial +1 (855) 500
8701 (for callers in the US), +86 400 120 0654 (for callers in
China Mainland), +852 3018 6776 (for callers in Hong Kong) or +65
6713 5440 (for callers outside of the US, China Mainland, and Hong
Kong) and enter pass code 9969 7455. Please dial in
approximately 10 minutes before the scheduled time of the call.
A recording of the conference call will be
available after the conclusion of the conference call through
November 22, 2016. Please dial +1 (855) 452 5696 (for callers in
the US) or +61 2 9003 4211 (for callers outside the US) and
entering pass code 9969 7455.
The conference call will also be webcast live
over the Internet and can be accessed by all interested parties at
the Company’s Web site, http://ir.huazhu.com.
Use of Non-GAAP Financial
Measures To supplement the Company’s unaudited
consolidated financial results presented in accordance with U.S.
GAAP, the Company uses the following non-GAAP measures defined as
non-GAAP financial measures by the SEC: hotel operating costs
excluding share-based compensation expenses; general and
administrative expenses excluding share-based compensation
expenses; selling expenses excluding share-based compensation
expenses; adjusted income from operations excluding share-based
compensation expenses; adjusted operating margin excluding
share-based compensation expenses; adjusted net income attributable
to China Lodging Group, Limited excluding share-based compensation
expenses; adjusted basic and diluted earnings per share and per ADS
excluding share-based compensation expenses; EBITDA; adjusted
EBITDA excluding share-based compensation expenses; and adjusted
EBITDA margin excluding share-based compensation expenses. The
presentation of these non-GAAP financial measures is not intended
to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with U.S. GAAP.
For more information on these non-GAAP financial measures, please
see the table captioned “Reconciliations of GAAP and non-GAAP
results” set forth at the end of this release. The Company believes
that these non-GAAP financial measures provide meaningful
supplemental information regarding Company performance by excluding
share-based compensation expenses that may not be indicative of
Company operating performance. The Company believes that both
management and investors benefit from referring to these non-GAAP
financial measures in assessing Company performance and when
planning and forecasting future periods. These non-GAAP financial
measures also facilitate management’s internal comparisons to the
Company’s historical performance. The Company believes these
non-GAAP financial measures are also useful to investors in
allowing for greater transparency with respect to supplemental
information used regularly by Company management in financial and
operational decision-making. A limitation of using non-GAAP
financial measures excluding share-based compensation expenses is
that share-based compensation expenses have been – and will
continue to be – a significant recurring expense in the Company’s
business. Management compensates for these limitations by providing
specific information regarding the GAAP amounts excluded from each
non-GAAP measure. The accompanying tables have more details on the
reconciliations between GAAP financial measures that are most
directly comparable to non-GAAP financial measures.
The Company believes that EBITDA is a useful
financial metric to assess the operating and financial performance
before the impact of investing and financing transactions and
income taxes, given the significant investments that the Company
has made in leasehold improvements, depreciation and amortization
expense that comprise a significant portion of the Company’s cost
structure. In addition, the Company believes that EBITDA is widely
used by other companies in the lodging industry and may be used by
investors as a measure of financial performance. The Company
believes that EBITDA will provide investors with a useful tool for
comparability between periods because it eliminates depreciation
and amortization expense attributable to capital expenditures. The
Company also uses adjusted EBITDA, which is defined as EBITDA
before share-based compensation expenses, to assess operating
results of the hotels in operation. The Company believes that the
exclusion of share-based compensation expenses helps facilitate
year-on-year comparison of the results of operations as the
share-based compensation expenses may not be indicative of Company
operating performance. Therefore, the Company believes adjusted
EBITDA more closely reflects the performance capability of hotels
currently in operation. The presentation of EBITDA and adjusted
EBITDA should not be construed as an indication that the Company’s
future results will be unaffected by other charges and gains
considered to be outside the ordinary course of business.
The use of EBITDA and adjusted EBITDA has
certain limitations. Depreciation and amortization expense for
various long-term assets, income tax, interest expense and interest
income have been and will be incurred and are not reflected in the
presentation of EBITDA. Share-based compensation expenses have been
and will be incurred and are not reflected in the presentation of
adjusted EBITDA. Each of these items should also be considered in
the overall evaluation of the results. The Company compensates for
these limitations by providing the relevant disclosure of the
depreciation and amortization, interest income, interest expense,
income tax expense, share-based compensation expenses and other
relevant items both in the reconciliations to the U.S. GAAP
financial measures and in the consolidated financial statements,
all of which should be considered when evaluating the performance
of the Company.
The terms EBITDA and adjusted EBITDA are not
defined under U.S. GAAP, and neither EBITDA nor adjusted EBITDA is
a measure of net income, operating income, operating performance or
liquidity presented in accordance with U.S. GAAP. When assessing
the operating and financial performance, investors should not
consider these data in isolation or as a substitute for the
Company’s net income, operating income or any other operating
performance measure that is calculated in accordance with U.S.
GAAP. In addition, the Company’s EBITDA or adjusted EBITDA may not
be comparable to EBITDA or adjusted EBITDA – or similarly titled
measures utilized by other companies – since such other companies
may not calculate EBITDA or adjusted EBITDA in the same manner as
the Company does.
Reconciliations of the Company’s non-GAAP
financial measures, including EBITDA and adjusted EBITDA, to the
consolidated statement of operations information are included at
the end of this press release.
About China Lodging Group,
LimitedChina Lodging Group, Limited is a leading hotel
operator and franchisor in China under 12 brand names. As of
September 30, 2016, the Company had 3,198 hotels or 322,785 rooms
in operation in 365 cities. With a primary focus on economy and
midscale hotel segments, China Lodging Group’s brands include Hi
Inn, HanTing Hotel, Elan Hotel, JI Hotel, Starway Hotel, Joya
Hotel, and Manxin Hotels & Resorts. The Company also has the
rights as master franchisee for Mercure, Ibis and Ibis Styles, and
co-development rights for Grand Mercure and Novotel, in Pan-China
region.
The Company’s business includes leased,
manachised and franchised models. Under the lease model, the
Company directly operates hotels typically located on leased
properties. Under the manachise model, the Company manages
manachised hotels through the on-site hotel managers it appoints
and collects fees from franchisees. Under the franchise model, the
Company provides training, reservation and support services to the
franchised hotels and collects fees from franchisees but does not
appoint on-site hotel managers. The Company applies a consistent
standard and platform across all of its hotels. As of September 30,
2016, China Lodging Group operates 24 percent of its hotel rooms
under lease model, 76 percent under manachise and franchise models.
For more information, please visit the Company’s website:
http://ir.huazhu.com.
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995: The information in this
release contains forward-looking statements which involve risks and
uncertainties, including statements regarding the Company’s capital
needs, business strategy and expectations. Any statements contained
herein that are not statements of historical fact may be deemed to
be forward-looking statements, which may be identified by
terminology such as “may,” “should,” “will,” “expect,” “plan,”
“intend,” “anticipate,” “believe,” “estimate,” “predict,”
“potential,” “forecast,” “project,” or “continue,” the negative of
such terms or other comparable terminology. Readers should not rely
on forward-looking statements as predictions of future events or
results. Any or all of the Company’s forward-looking statements may
turn out to be wrong. They can be affected by inaccurate
assumptions, risks and uncertainties and other factors which could
cause actual events or results to be materially different from
those expressed or implied in the forward-looking statements. In
evaluating these statements, readers should consider various
factors, including the anticipated growth strategies of the
Company, the future results of operations and financial condition
of the Company, the economic conditions of China, the regulatory
environment in China, the Company’s ability to attract customers
and leverage its brands, trends and competition in the lodging
industry, the expected growth of the lodging market in China and
other factors and risks outlined in the Company’s filings with the
Securities and Exchange Commission, including its annual report on
Form 20-F and other filings. These factors may cause the Company’s
actual results to differ materially from any forward-looking
statement. In addition, new factors emerge from time to time and it
is not possible for the Company to predict all factors that may
cause actual results to differ materially from those contained in
any forward-looking statements. Any projections in this release are
based on limited information currently available to the Company,
which is subject to change. This release also contains statements
or projections that are based upon information available to the
public, as well as other information from sources which the Company
believes to be reliable, but it is not guaranteed by the Company to
be accurate, nor does the Company purport it to be complete. The
Company disclaims any obligation to publicly update any
forward-looking statements to reflect events or circumstances after
the date of this document, except as required by applicable
law.
1 The conversion of Renminbi (“RMB”) into United States
dollars (“US$”) is based on the exchange rate of US$1.00=RMB6.6685
on September 30, 2016 as set forth in H.10 statistical release of
the U.S. Federal Reserve Board and available at
http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.
2 Each ADS represents four of the Company’s ordinary
shares.
—Financial Tables and Operational Data
Follow—
China Lodging Group,
Limited |
Unaudited Condensed Consolidated Balance
Sheets |
|
December 31, 2015 |
|
September 30, 2016 |
|
RMB |
|
RMB |
|
US$ |
|
(in thousands) |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
1,237,838 |
|
|
|
3,001,831 |
|
|
|
450,151 |
|
Restricted cash |
|
360,500 |
|
|
|
2,157 |
|
|
|
324 |
|
Short-term investments |
|
533,215 |
|
|
|
44,751 |
|
|
|
6,711 |
|
Accounts receivable, net |
|
93,956 |
|
|
|
143,545 |
|
|
|
21,526 |
|
Amounts due from related
parties |
|
16,157 |
|
|
|
93,251 |
|
|
|
13,984 |
|
Prepaid rent |
|
429,588 |
|
|
|
402,974 |
|
|
|
60,429 |
|
Inventories |
|
24,529 |
|
|
|
21,759 |
|
|
|
3,263 |
|
Other current assets |
|
167,995 |
|
|
|
195,395 |
|
|
|
29,301 |
|
Deferred tax assets |
|
98,200 |
|
|
|
98,200 |
|
|
|
14,726 |
|
Total current assets |
|
2,961,978 |
|
|
|
4,003,863 |
|
|
|
600,415 |
|
|
|
|
|
|
|
Property and equipment,
net |
|
3,805,886 |
|
|
|
3,792,742 |
|
|
|
568,755 |
|
Intangible assets,
net |
|
144,812 |
|
|
|
495,889 |
|
|
|
74,363 |
|
Long-term investments |
|
356,578 |
|
|
|
913,105 |
|
|
|
136,928 |
|
Goodwill |
|
108,344 |
|
|
|
167,505 |
|
|
|
25,119 |
|
Other assets |
|
195,446 |
|
|
|
205,854 |
|
|
|
30,869 |
|
Deferred tax
assets |
|
120,477 |
|
|
|
111,500 |
|
|
|
16,720 |
|
Total assets |
|
7,693,521 |
|
|
|
9,690,458 |
|
|
|
1,453,169 |
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Short-term debt |
|
324,680 |
|
|
|
287,145 |
|
|
|
43,060 |
|
Accounts payable |
|
585,347 |
|
|
|
500,712 |
|
|
|
75,086 |
|
Amounts due to related parties |
|
7,653 |
|
|
|
13,346 |
|
|
|
2,001 |
|
Salary and welfare payable |
|
210,955 |
|
|
|
161,214 |
|
|
|
24,175 |
|
Deferred revenue |
|
705,607 |
|
|
|
828,911 |
|
|
|
124,303 |
|
Accrued expenses and other current
liabilities |
|
576,160 |
|
|
|
889,697 |
|
|
|
133,418 |
|
Dividends payable |
|
276,261 |
|
|
|
- |
|
|
|
- |
|
Income tax payable |
|
102,810 |
|
|
|
173,299 |
|
|
|
25,988 |
|
Deferred tax liabilities |
|
1,465 |
|
|
|
1,465 |
|
|
|
220 |
|
Total current liabilities |
|
2,790,938 |
|
|
|
2,855,789 |
|
|
|
428,251 |
|
|
|
|
|
|
|
Deferred rent |
|
945,192 |
|
|
|
996,017 |
|
|
|
149,361 |
|
Deferred revenue |
|
180,861 |
|
|
|
177,587 |
|
|
|
26,631 |
|
Other long-term
liabilities |
|
275,954 |
|
|
|
309,686 |
|
|
|
46,440 |
|
Deferred tax
liabilities |
|
59,828 |
|
|
|
98,737 |
|
|
|
14,806 |
|
Total liabilities |
|
4,252,773 |
|
|
|
4,437,816 |
|
|
|
665,489 |
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Ordinary shares |
|
186 |
|
|
|
203 |
|
|
|
30 |
|
Treasury shares |
|
(107,331 |
) |
|
|
(107,331 |
) |
|
|
(16,095 |
) |
Additional paid-in capital |
|
2,470,099 |
|
|
|
3,671,288 |
|
|
|
550,542 |
|
Retained earnings |
|
1,007,559 |
|
|
|
1,686,316 |
|
|
|
252,878 |
|
Accumulated other comprehensive
income (loss) |
|
59,596 |
|
|
|
(870 |
) |
|
|
(131 |
) |
Total China Lodging
Group, Limited shareholders' equity |
|
3,430,109 |
|
|
|
5,249,606 |
|
|
|
787,224 |
|
Noncontrolling interest |
|
10,639 |
|
|
|
3,036 |
|
|
|
456 |
|
Total equity |
|
3,440,748 |
|
|
|
5,252,642 |
|
|
|
787,680 |
|
Total
liabilities and equity |
|
7,693,521 |
|
|
|
9,690,458 |
|
|
|
1,453,169 |
|
|
China Lodging Group,
Limited |
Unaudited Condensed Consolidated Statements of
Comprehensive Income |
|
Quarter Ended |
|
|
September 30, 2015 |
|
June 30, 2016 |
|
September 30, 2016 |
|
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
(in thousands, except per share and per ADS
data) |
Revenues: |
|
|
|
|
|
|
|
|
Leased and owned hotels |
|
1,374,492 |
|
|
|
1,329,736 |
|
|
|
1,390,334 |
|
|
|
208,493 |
|
|
Manachised and franchised
hotels |
|
318,864 |
|
|
|
351,831 |
|
|
|
373,239 |
|
|
|
55,971 |
|
|
Others |
|
- |
|
|
|
8,994 |
|
|
|
10,233 |
|
|
|
1,534 |
|
|
Total revenues |
|
1,693,356 |
|
|
|
1,690,561 |
|
|
|
1,773,806 |
|
|
|
265,998 |
|
|
Less: business tax and related
surcharges |
|
(93,176 |
) |
|
|
(33,642 |
) |
|
|
- |
|
|
|
- |
|
|
Net revenues |
|
1,600,180 |
|
|
|
1,656,919 |
|
|
|
1,773,806 |
|
|
|
265,998 |
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
|
Hotel operating costs: |
|
|
|
|
|
|
|
|
Rents |
|
(459,805 |
) |
|
|
(473,549 |
) |
|
|
(458,946 |
) |
|
|
(68,823 |
) |
|
Utilities |
|
(82,475 |
) |
|
|
(66,730 |
) |
|
|
(85,953 |
) |
|
|
(12,889 |
) |
|
Personnel costs |
|
(247,161 |
) |
|
|
(275,206 |
) |
|
|
(282,911 |
) |
|
|
(42,425 |
) |
|
Depreciation and
amortization |
|
(161,178 |
) |
|
|
(170,688 |
) |
|
|
(171,089 |
) |
|
|
(25,656 |
) |
|
Consumables, food and
beverage |
|
(125,703 |
) |
|
|
(129,792 |
) |
|
|
(122,071 |
) |
|
|
(18,306 |
) |
|
Others |
|
(90,437 |
) |
|
|
(101,447 |
) |
|
|
(128,731 |
) |
|
|
(19,304 |
) |
|
Total hotel operating costs |
|
(1,166,759 |
) |
|
|
(1,217,412 |
) |
|
|
(1,249,701 |
) |
|
|
(187,403 |
) |
|
Other operating costs |
|
- |
|
|
|
(3,029 |
) |
|
|
(2,258 |
) |
|
|
(339 |
) |
|
Selling and marketing expenses |
|
(42,383 |
) |
|
|
(36,064 |
) |
|
|
(31,264 |
) |
|
|
(4,688 |
) |
|
General and administrative
expenses |
|
(101,426 |
) |
|
|
(118,868 |
) |
|
|
(123,233 |
) |
|
|
(18,480 |
) |
|
Pre-opening expenses |
|
(27,649 |
) |
|
|
(13,371 |
) |
|
|
(16,710 |
) |
|
|
(2,506 |
) |
|
Total operating costs
and expenses |
|
(1,338,217 |
) |
|
|
(1,388,744 |
) |
|
|
(1,423,166 |
) |
|
|
(213,416 |
) |
|
Other operating income (expense),
net |
|
19,718 |
|
|
|
(4,787 |
) |
|
|
399 |
|
|
|
60 |
|
|
Income from
operations |
|
281,681 |
|
|
|
263,388 |
|
|
|
351,039 |
|
|
|
52,642 |
|
|
Interest income |
|
6,277 |
|
|
|
15,472 |
|
|
|
19,154 |
|
|
|
2,872 |
|
|
Interest expense |
|
(1,908 |
) |
|
|
(3,541 |
) |
|
|
(2,158 |
) |
|
|
(324 |
) |
|
Other income |
|
(289 |
) |
|
|
109,724 |
|
|
|
11,577 |
|
|
|
1,736 |
|
|
Foreign exchange
gain |
|
6,793 |
|
|
|
5,926 |
|
|
|
1,800 |
|
|
|
270 |
|
|
Income before income
taxes |
|
292,554 |
|
|
|
390,969 |
|
|
|
381,412 |
|
|
|
57,196 |
|
|
Income tax expense |
|
(67,290 |
) |
|
|
(77,457 |
) |
|
|
(94,204 |
) |
|
|
(14,127 |
) |
|
Income (Loss) from
equity method investments |
|
(477 |
) |
|
|
(3,146 |
) |
|
|
2,277 |
|
|
|
342 |
|
|
Net income |
|
224,787 |
|
|
|
310,366 |
|
|
|
289,485 |
|
|
|
43,411 |
|
|
Less: net loss
(income) attributable to noncontrolling interests |
|
(1,138 |
) |
|
|
5,134 |
|
|
|
4,384 |
|
|
|
657 |
|
|
Net income attributable
to China Lodging Group, Limited |
|
223,649 |
|
|
|
315,500 |
|
|
|
293,869 |
|
|
|
44,068 |
|
|
Other comprehensive
income |
|
|
|
|
|
|
|
|
Unrealized securities
holding gains (losses), net of tax |
|
(68,357 |
) |
|
|
4,064 |
|
|
|
10,395 |
|
|
|
1,559 |
|
|
Reclassification
adjustment of unrealized securities holding gains, net of tax, for
gain included in net income |
|
- |
|
|
|
(55,018 |
) |
|
|
- |
|
|
|
- |
|
|
Foreign currency
translation adjustments, net of tax |
|
1,789 |
|
|
|
(6,003 |
) |
|
|
(1,547 |
) |
|
|
(232 |
) |
|
Comprehensive
income |
|
158,219 |
|
|
|
253,409 |
|
|
|
298,333 |
|
|
|
44,738 |
|
|
Comprehensive loss
(income) attributable to the noncontrolling interest |
|
(1,138 |
) |
|
|
5,134 |
|
|
|
4,384 |
|
|
|
657 |
|
|
Comprehensive income
attributable to China Lodging Group, Limited |
|
157,081 |
|
|
|
258,543 |
|
|
|
302,717 |
|
|
|
45,395 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
Basic |
|
0.89 |
|
|
|
1.14 |
|
|
|
1.06 |
|
|
|
0.16 |
|
|
Diluted |
|
0.87 |
|
|
|
1.11 |
|
|
|
1.03 |
|
|
|
0.15 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per ADS: |
|
|
|
|
|
|
|
|
Basic |
|
3.58 |
|
|
|
4.56 |
|
|
|
4.24 |
|
|
|
0.64 |
|
|
Diluted |
|
3.49 |
|
|
|
4.44 |
|
|
|
4.12 |
|
|
|
0.62 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares used in computation: |
|
|
|
|
|
|
|
|
Basic |
|
249,956 |
|
|
|
276,496 |
|
|
|
277,169 |
|
|
|
277,169 |
|
|
Diluted |
|
256,083 |
|
|
|
284,009 |
|
|
|
285,426 |
|
|
|
285,426 |
|
|
|
|
|
|
|
|
|
|
|
China Lodging Group,
Limited |
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
Quarter Ended |
|
|
September 30, 2015 |
|
June 30, 2016 |
|
September 30, 2016 |
|
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
(in thousands) |
Operating
activities: |
|
|
|
|
|
|
|
|
Net income |
|
224,787 |
|
|
|
310,366 |
|
|
|
289,485 |
|
|
|
43,411 |
|
|
Adjustments to reconcile net income
to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Share-based compensation |
|
12,938 |
|
|
|
16,232 |
|
|
|
11,813 |
|
|
|
1,771 |
|
|
Depreciation and amortization |
|
165,302 |
|
|
|
174,952 |
|
|
|
175,637 |
|
|
|
26,338 |
|
|
Deferred taxes |
|
- |
|
|
|
(3,789 |
) |
|
|
6,426 |
|
|
|
964 |
|
|
Bad debt expenses |
|
348 |
|
|
|
97 |
|
|
|
(964 |
) |
|
|
(145 |
) |
|
Deferred rent |
|
37,482 |
|
|
|
22,088 |
|
|
|
20,923 |
|
|
|
3,138 |
|
|
Gain from disposal of property and
equipment |
|
- |
|
|
|
6,841 |
|
|
|
1,252 |
|
|
|
188 |
|
|
Impairment loss |
|
34,735 |
|
|
|
33,222 |
|
|
|
51,457 |
|
|
|
7,716 |
|
|
Loss (Income) from equity method
investments |
|
477 |
|
|
|
3,146 |
|
|
|
(2,277 |
) |
|
|
(342 |
) |
|
Gain from sale of investments |
|
- |
|
|
|
(105,849 |
) |
|
|
1,989 |
|
|
|
298 |
|
|
Excess tax benefit from share-based
compensation |
|
(1,790 |
) |
|
|
(510 |
) |
|
|
(3,656 |
) |
|
|
(548 |
) |
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and
liabilities, net of effect of acquisitions: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
4,159 |
|
|
|
(20,809 |
) |
|
|
(4,114 |
) |
|
|
(617 |
) |
|
Prepaid rent |
|
(30,510 |
) |
|
|
33,528 |
|
|
|
(22,304 |
) |
|
|
(3,345 |
) |
|
Inventories |
|
1,553 |
|
|
|
1,590 |
|
|
|
(565 |
) |
|
|
(85 |
) |
|
Amounts due from related
parties |
|
- |
|
|
|
(3,954 |
) |
|
|
1 |
|
|
|
- |
|
|
Other current assets |
|
(481 |
) |
|
|
(11,874 |
) |
|
|
(21,681 |
) |
|
|
(3,251 |
) |
|
Other assets |
|
(4 |
) |
|
|
410 |
|
|
|
(6,451 |
) |
|
|
(967 |
) |
|
Accounts payable |
|
(7,763 |
) |
|
|
23,867 |
|
|
|
(1,107 |
) |
|
|
(166 |
) |
|
Amounts due to related parties |
|
(1,574 |
) |
|
|
3,180 |
|
|
|
1,764 |
|
|
|
265 |
|
|
Salary and welfare payables |
|
(29,622 |
) |
|
|
44,827 |
|
|
|
(27,150 |
) |
|
|
(4,071 |
) |
|
Deferred revenue |
|
54,260 |
|
|
|
54,638 |
|
|
|
(42,477 |
) |
|
|
(6,370 |
) |
|
Accrued expenses and other current
liabilities |
|
26,481 |
|
|
|
32,597 |
|
|
|
126,971 |
|
|
|
19,041 |
|
|
Income tax payable and
receivable |
|
11,075 |
|
|
|
34,660 |
|
|
|
54,895 |
|
|
|
8,232 |
|
|
Other long-term liabilities |
|
10,642 |
|
|
|
10,648 |
|
|
|
10,319 |
|
|
|
1,547 |
|
|
Net cash
provided by operating activities |
|
512,495 |
|
|
|
660,104 |
|
|
|
620,186 |
|
|
|
93,002 |
|
|
|
|
|
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
|
|
|
|
Purchases of property and
equipment |
|
(128,910 |
) |
|
|
(105,747 |
) |
|
|
(108,719 |
) |
|
|
(16,303 |
) |
|
Purchases of intangibles |
|
(444 |
) |
|
|
(1,049 |
) |
|
|
(5,122 |
) |
|
|
(768 |
) |
|
Acquisitions, net of cash
received |
|
(460 |
) |
|
|
132,348 |
|
|
|
(2,926 |
) |
|
|
(439 |
) |
|
Proceeds from disposal of
subsidiary and branch |
|
2,500 |
|
|
|
(20,667 |
) |
|
|
- |
|
|
|
- |
|
|
Purchase of long-term
investments |
|
(72,437 |
) |
|
|
(52,422 |
) |
|
|
(20,150 |
) |
|
|
(3,022 |
) |
|
Proceeds from maturity/sale of
long-term investments |
|
4,007 |
|
|
|
5,009 |
|
|
|
8,958 |
|
|
|
1,343 |
|
|
Payment for shareholder loan to
joint venture |
|
- |
|
|
|
(3,442 |
) |
|
|
(81 |
) |
|
|
(12 |
) |
|
Collection of shareholder loan from
joint venture |
|
773 |
|
|
|
- |
|
|
|
9,285 |
|
|
|
1,392 |
|
|
Purchase of short-term
investments |
|
(207,916 |
) |
|
|
(25,400 |
) |
|
|
- |
|
|
|
- |
|
|
Proceeds from maturity/sale of
short-term investments |
|
885 |
|
|
|
451,616 |
|
|
|
996 |
|
|
|
150 |
|
|
Decrease (increase) in restricted
cash |
|
(580,000 |
) |
|
|
- |
|
|
|
358,343 |
|
|
|
53,737 |
|
|
Net cash provided by
(used in) investing activities |
|
(982,002 |
) |
|
|
380,246 |
|
|
|
240,584 |
|
|
|
36,078 |
|
|
|
|
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
|
|
|
|
Net proceeds from issuance of
ordinary shares upon exercise of option |
|
1,917 |
|
|
|
990 |
|
|
|
3,299 |
|
|
|
495 |
|
|
Payment of share repurchase |
|
(107,331 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Proceeds from short-term debt |
|
489,376 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Repayment of short-term debt |
|
(13,581 |
) |
|
|
- |
|
|
|
(332,555 |
) |
|
|
(49,870 |
) |
|
Repayment of funds advanced from
noncontrolling interest holders |
|
(100 |
) |
|
|
(100 |
) |
|
|
- |
|
|
|
- |
|
|
Acquisition of noncontrolling
interest |
|
(2,042 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Contribution from noncontrolling
interest holders |
|
- |
|
|
|
245 |
|
|
|
800 |
|
|
|
120 |
|
|
Dividend paid to noncontrolling
interest holders |
|
(475 |
) |
|
|
(240 |
) |
|
|
(1,935 |
) |
|
|
(290 |
) |
|
Excess tax benefit from share-based
compensation |
|
1,790 |
|
|
|
510 |
|
|
|
3,656 |
|
|
|
548 |
|
|
Net cash provided by
(used in) financing activities |
|
369,554 |
|
|
|
1,405 |
|
|
|
(326,735 |
) |
|
|
(48,997 |
) |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
5,705 |
|
|
|
9,837 |
|
|
|
1,444 |
|
|
|
217 |
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents |
|
(94,248 |
) |
|
|
1,051,592 |
|
|
|
535,479 |
|
|
|
80,300 |
|
|
Cash and cash
equivalents at the beginning of the period |
|
893,476 |
|
|
|
1,414,760 |
|
|
|
2,466,352 |
|
|
|
369,851 |
|
|
Cash and cash
equivalents at the end of the period |
|
799,228 |
|
|
|
2,466,352 |
|
|
|
3,001,831 |
|
|
|
450,151 |
|
|
|
|
China Lodging Group,
Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended September 30, 2016 |
|
GAAP Result |
|
% of Net Revenues |
|
Share-based Compensation |
|
% of Net Revenues |
|
Non-GAAP Result |
|
% of Net Revenues |
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating
costs |
1,249,701 |
|
|
70.5 |
% |
|
3,866 |
|
|
0.2 |
% |
|
1,245,835 |
|
|
70.3 |
% |
Other operating
costs |
2,258 |
|
|
0.1 |
% |
|
- |
|
|
0.0 |
% |
|
2,258 |
|
|
0.1 |
% |
Selling and marketing
expenses |
31,264 |
|
|
1.8 |
% |
|
244 |
|
|
0.0 |
% |
|
31,020 |
|
|
1.8 |
% |
General and
administrative expenses |
123,233 |
|
|
6.9 |
% |
|
7,703 |
|
|
0.4 |
% |
|
115,530 |
|
|
6.5 |
% |
Pre-opening
expenses |
16,710 |
|
|
0.9 |
% |
|
- |
|
|
0.0 |
% |
|
16,710 |
|
|
0.9 |
% |
Total operating costs
and expenses |
1,423,166 |
|
|
80.2 |
% |
|
11,813 |
|
|
0.6 |
% |
|
1,411,353 |
|
|
79.6 |
% |
Income from
operations |
351,039 |
|
|
19.8 |
% |
|
11,813 |
|
|
0.6 |
% |
|
362,852 |
|
|
20.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30, 2016 |
|
GAAP Result |
|
% of Net Revenues |
|
Share-based Compensation |
|
% of Net Revenues |
|
Non-GAAP Result |
|
% of Net Revenues |
|
US$ |
|
|
|
US$ |
|
|
|
US$ |
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating
costs |
187,403 |
|
|
70.5 |
% |
|
580 |
|
|
0.2 |
% |
|
186,823 |
|
|
70.3 |
% |
Other operating
costs |
339 |
|
|
0.1 |
% |
|
- |
|
|
0.0 |
% |
|
339 |
|
|
0.1 |
% |
Selling and marketing
expenses |
4,688 |
|
|
1.8 |
% |
|
36 |
|
|
0.0 |
% |
|
4,652 |
|
|
1.8 |
% |
General and
administrative expenses |
18,480 |
|
|
6.9 |
% |
|
1,155 |
|
|
0.4 |
% |
|
17,325 |
|
|
6.5 |
% |
Pre-opening
expenses |
2,506 |
|
|
0.9 |
% |
|
- |
|
|
0.0 |
% |
|
2,506 |
|
|
0.9 |
% |
Total operating costs
and expenses |
213,416 |
|
|
80.2 |
% |
|
1,771 |
|
|
0.6 |
% |
|
211,645 |
|
|
79.6 |
% |
Income from
operations |
52,642 |
|
|
19.8 |
% |
|
1,771 |
|
|
0.6 |
% |
|
54,413 |
|
|
20.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, 2016 |
|
GAAP Result |
|
% of Net Revenues |
|
Share-based Compensation |
|
% of Net Revenues |
|
Non-GAAP Result |
|
% of Net Revenues |
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating
costs |
1,217,412 |
|
|
73.5 |
% |
|
3,254 |
|
|
0.2 |
% |
|
1,214,158 |
|
|
73.3 |
% |
Other operating
costs |
3,029 |
|
|
0.2 |
% |
|
- |
|
|
0.0 |
% |
|
3,029 |
|
|
0.2 |
% |
Selling and marketing
expenses |
36,064 |
|
|
2.2 |
% |
|
283 |
|
|
0.0 |
% |
|
35,781 |
|
|
2.2 |
% |
General and
administrative expenses |
118,868 |
|
|
7.2 |
% |
|
12,695 |
|
|
0.8 |
% |
|
106,173 |
|
|
6.4 |
% |
Pre-opening
expenses |
13,371 |
|
|
0.8 |
% |
|
- |
|
|
0.0 |
% |
|
13,371 |
|
|
0.8 |
% |
Total operating costs
and expenses |
1,388,744 |
|
|
83.9 |
% |
|
16,232 |
|
|
1.0 |
% |
|
1,372,512 |
|
|
82.9 |
% |
Income from
operations |
263,388 |
|
|
15.9 |
% |
|
16,232 |
|
|
1.0 |
% |
|
279,620 |
|
|
16.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30, 2015 |
|
GAAP Result |
|
% of Net Revenues |
|
Share-based Compensation |
|
% of Net Revenues |
|
Non-GAAP Result |
|
% of Net Revenues |
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating
costs |
1,166,759 |
|
|
72.9 |
% |
|
2,910 |
|
|
0.2 |
% |
|
1,163,849 |
|
|
72.7 |
% |
Other operating
costs |
- |
|
|
0.0 |
% |
|
- |
|
|
0.0 |
% |
|
- |
|
|
0.0 |
% |
Selling and marketing
expenses |
42,383 |
|
|
2.6 |
% |
|
246 |
|
|
0.0 |
% |
|
42,137 |
|
|
2.6 |
% |
General and
administrative expenses |
101,426 |
|
|
6.3 |
% |
|
9,782 |
|
|
0.6 |
% |
|
91,644 |
|
|
5.7 |
% |
Pre-opening
expenses |
27,649 |
|
|
1.7 |
% |
|
- |
|
|
0.0 |
% |
|
27,649 |
|
|
1.7 |
% |
Total operating costs
and expenses |
1,338,217 |
|
|
83.5 |
% |
|
12,938 |
|
|
0.8 |
% |
|
1,325,279 |
|
|
82.7 |
% |
Income from
operations |
281,681 |
|
|
17.6 |
% |
|
12,938 |
|
|
0.8 |
% |
|
294,619 |
|
|
18.4 |
% |
|
China Lodging Group,
Limited |
Unaudited
Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended |
|
September 30, 2015 |
|
June 30, 2016 |
|
September 30, 2016 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in thousands, except per share and per ADS data) |
|
|
|
|
|
|
|
|
Net income attributable
to China Lodging Group, Limited (GAAP) |
|
223,649 |
|
|
|
315,500 |
|
|
|
293,869 |
|
|
|
44,068 |
|
Share-based
compensation expenses |
|
12,938 |
|
|
|
16,232 |
|
|
|
11,813 |
|
|
|
1,771 |
|
Adjusted net income
attributable to China Lodging Group, Limited (non-GAAP) |
|
236,587 |
|
|
|
331,732 |
|
|
|
305,682 |
|
|
|
45,839 |
|
|
|
|
|
|
|
|
|
Earnings per share
(GAAP) |
|
|
|
|
|
|
|
Basic |
|
0.89 |
|
|
|
1.14 |
|
|
|
1.06 |
|
|
|
0.16 |
|
Diluted |
|
0.87 |
|
|
|
1.11 |
|
|
|
1.03 |
|
|
|
0.15 |
|
|
|
|
|
|
|
|
|
Earnings per ADS
(GAAP) |
|
|
|
|
|
|
|
Basic |
|
3.58 |
|
|
|
4.56 |
|
|
|
4.24 |
|
|
|
0.64 |
|
Diluted |
|
3.49 |
|
|
|
4.44 |
|
|
|
4.12 |
|
|
|
0.62 |
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share (non-GAAP) |
|
|
|
|
|
|
|
Basic |
|
0.95 |
|
|
|
1.20 |
|
|
|
1.10 |
|
|
|
0.17 |
|
Diluted |
|
0.92 |
|
|
|
1.17 |
|
|
|
1.07 |
|
|
|
0.16 |
|
|
|
|
|
|
|
|
|
Adjusted earnings per
ADS (non-GAAP) |
|
|
|
|
|
|
|
Basic |
|
3.79 |
|
|
|
4.80 |
|
|
|
4.41 |
|
|
|
0.66 |
|
Diluted |
|
3.70 |
|
|
|
4.67 |
|
|
|
4.28 |
|
|
|
0.64 |
|
|
|
|
|
|
|
|
|
Weighted average number
of shares used in computation |
|
|
|
|
|
|
|
Basic |
|
249,956 |
|
|
|
276,496 |
|
|
|
277,169 |
|
|
|
277,169 |
|
Diluted |
|
256,083 |
|
|
|
284,009 |
|
|
|
285,426 |
|
|
|
285,426 |
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
September 30, 2015 |
|
June 30, 2016 |
|
September 30, 2016 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in thousands) |
|
|
|
|
|
|
|
|
Net income
attributable to China Lodging Group, Limited (GAAP) |
|
223,649 |
|
|
|
315,500 |
|
|
|
293,869 |
|
|
|
44,068 |
|
Interest income |
|
(6,277 |
) |
|
|
(15,472 |
) |
|
|
(19,154 |
) |
|
|
(2,872 |
) |
Interest expenses |
|
1,908 |
|
|
|
3,541 |
|
|
|
2,158 |
|
|
|
324 |
|
Income tax expense |
|
67,290 |
|
|
|
77,457 |
|
|
|
94,204 |
|
|
|
14,127 |
|
Depreciation and
amortization |
|
165,302 |
|
|
|
174,952 |
|
|
|
175,637 |
|
|
|
26,338 |
|
EBITDA
(non-GAAP) |
|
451,872 |
|
|
|
555,978 |
|
|
|
546,714 |
|
|
|
81,985 |
|
Share-based
Compensation |
|
12,938 |
|
|
|
16,232 |
|
|
|
11,813 |
|
|
|
1,771 |
|
Adjusted EBITDA
(non-GAAP) |
|
464,810 |
|
|
|
572,210 |
|
|
|
558,527 |
|
|
|
83,756 |
|
|
China Lodging
Group, Limited |
Operational
Data |
|
|
|
|
As of |
|
September 30, |
June 30, |
September 30, |
|
2015 |
2016 |
2016 |
Total hotels in
operation: |
|
2,588 |
|
|
3,114 |
|
|
3,198 |
|
Leased and owned hotels |
|
619 |
|
|
627 |
|
|
625 |
|
Manachised hotels |
|
1,899 |
|
|
2,306 |
|
|
2,399 |
|
Franchised hotels |
|
70 |
|
|
181 |
|
|
174 |
|
Total hotel rooms in
operation |
|
264,076 |
|
|
314,811 |
|
|
322,785 |
|
Leased and owned hotels |
|
75,384 |
|
|
77,123 |
|
|
77,158 |
|
Manachised hotels |
|
182,663 |
|
|
220,456 |
|
|
229,565 |
|
Franchised hotels |
|
6,029 |
|
|
17,232 |
|
|
16,062 |
|
Number of cities |
|
342 |
|
|
357 |
|
|
365 |
|
|
|
|
|
|
|
|
|
|
For the quarter ended |
|
September 30, |
June 30, |
September 30, |
|
2015 |
2016 |
2016 |
Occupancy rate (as a
percentage) |
|
|
|
Leased and owned hotels |
|
90.5 |
% |
|
86.7 |
% |
|
90.0 |
% |
Manachised hotels |
|
89.0 |
% |
|
85.5 |
% |
|
89.3 |
% |
Franchised hotels |
|
73.3 |
% |
|
70.6 |
% |
|
74.1 |
% |
Blended |
|
89.2 |
% |
|
85.2 |
% |
|
88.9 |
% |
Average daily room rate
(in RMB) |
|
|
|
Leased and owned hotels |
|
207 |
|
|
210 |
|
|
217 |
|
Manachised hotels |
|
179 |
|
|
175 |
|
|
186 |
|
Franchised hotels |
|
187 |
|
|
181 |
|
|
194 |
|
Blended |
|
188 |
|
|
184 |
|
|
194 |
|
RevPAR (in RMB) |
|
|
|
Leased and owned hotels |
|
188 |
|
|
182 |
|
|
195 |
|
Manachised hotels |
|
159 |
|
|
150 |
|
|
166 |
|
Franchised hotels |
|
137 |
|
|
128 |
|
|
144 |
|
Blended |
|
167 |
|
|
157 |
|
|
173 |
|
|
|
|
|
|
|
|
|
Same-hotel Operational Data: like-for-like performance for
hotels in operation for at least 18 months during the current
quarter |
|
As of and for the quarter ended |
|
|
September 30, |
|
|
2015 |
2016 |
|
Total |
|
2,050 |
|
|
2,050 |
|
|
Leased hotels |
|
588 |
|
|
588 |
|
|
Manachised and franchised
hotels |
|
1,462 |
|
|
1,462 |
|
|
Occupancy rate (as a
percentage) |
|
90.8 |
% |
|
90.9 |
% |
|
Average daily room rate
(in RMB) |
|
188 |
|
|
189 |
|
|
RevPAR (in RMB) |
|
171 |
|
|
172 |
|
|
|
Hotel breakdown
by segment |
|
|
|
|
|
|
|
Number of hotels in operation |
Number of roomsin operation |
|
Net added |
As of |
As of |
|
in Q3 2016 |
9/30/2016 |
9/30/2016 |
Economy
hotels |
|
45 |
|
2,771 |
266,554 |
HanTing Hotel |
|
44 |
|
2,149 |
217,825 |
Leased hotels |
|
- |
|
492 |
56,494 |
Manachised hotels |
|
43 |
|
1,656 |
161,267 |
Franchised hotels |
|
1 |
|
1 |
64 |
Hi Inn |
|
15 |
|
373 |
25,194 |
Leased hotels |
|
(1 |
) |
36 |
3,412 |
Manachised hotels |
|
8 |
|
293 |
19,011 |
Franchised hotels |
|
8 |
|
44 |
2,771 |
Elan Hotel |
|
(1 |
) |
179 |
13,261 |
Manachised hotels |
|
(3 |
) |
146 |
10,935 |
Franchised hotels |
|
2 |
|
33 |
2,326 |
ibis Hotel |
|
(13 |
) |
70 |
10,274 |
Leased hotels |
|
- |
|
13 |
2,562 |
Manachised hotels |
|
1 |
|
14 |
2,198 |
Franchised hotels |
|
(14 |
) |
43 |
5,514 |
Midscale and upscale hotels |
|
39 |
|
427 |
56,231 |
JI Hotel |
|
27 |
|
256 |
36,062 |
Leased hotels |
|
- |
|
78 |
13,504 |
Manachised hotels |
|
27 |
|
176 |
22,409 |
Franchised hotels |
|
- |
|
2 |
149 |
Starway Hotel |
|
5 |
|
141 |
13,463 |
Leased hotels |
|
(1 |
) |
2 |
386 |
Manachised hotels |
|
10 |
|
94 |
9,101 |
Franchised hotels |
|
(4 |
) |
45 |
3,976 |
Joya Hotel |
|
- |
|
5 |
945 |
Leased hotels |
|
- |
|
2 |
337 |
Manachised hotels |
|
- |
|
3 |
608 |
Manxin Hotels & Resorts |
|
1 |
|
3 |
203 |
Leased hotels |
|
(1 |
) |
- |
- |
Manachised hotels |
|
2 |
|
3 |
203 |
ibis Styles Hotel |
|
2 |
|
8 |
1,392 |
Manachised hotels |
|
3 |
|
5 |
973 |
Franchised hotels |
|
(1 |
) |
3 |
419 |
Mercure Hotel |
|
3 |
|
11 |
3,295 |
Leased hotels |
|
1 |
|
2 |
463 |
Manachised hotels |
|
2 |
|
8 |
2,554 |
Franchised hotels |
|
- |
|
1 |
278 |
Novotel Hotel |
|
1 |
|
2 |
680 |
Manachised hotels |
|
- |
|
1 |
306 |
Franchised hotels |
|
1 |
|
1 |
374 |
Grand Mercure |
|
- |
|
1 |
191 |
Franchised hotels |
|
- |
|
1 |
191 |
Total |
|
84 |
|
3,198 |
322,785 |
|
Same-hotel
operational data by segment |
|
|
|
|
|
|
|
|
|
|
|
|
Number of hotels in operation |
Same-hotel RevPAR |
|
Same-hotel ADR |
|
Same-hotel Occupancy |
|
|
As of |
For the quarter ended |
|
For the quarter ended |
|
For the quarter ended |
|
|
September 30, |
September 30, |
yoychange |
September 30, |
yoychange |
September 30, |
yoychange |
|
2015 |
2016 |
2015 |
2016 |
2015 |
2016 |
|
2015 |
|
|
2016 |
|
Economy hotels |
1,868 |
1,868 |
161 |
160 |
|
-0.8 |
% |
177 |
175 |
|
-0.8 |
% |
|
91 |
% |
|
91 |
% |
|
0.0 |
% |
Leased hotels |
518 |
518 |
167 |
165 |
|
-0.9 |
% |
184 |
183 |
|
-0.5 |
% |
|
91 |
% |
|
90 |
% |
|
-0.3 |
% |
Manachised and franchised hotels |
1,350 |
1,350 |
159 |
157 |
|
-0.8 |
% |
173 |
171 |
|
-0.9 |
% |
|
92 |
% |
|
92 |
% |
|
0.1 |
% |
Midscale and upscale hotels |
182 |
182 |
245 |
263 |
|
7.5 |
% |
284 |
299 |
|
5.5 |
% |
|
86 |
% |
|
88 |
% |
|
1.6 |
% |
Leased hotels |
70 |
70 |
285 |
311 |
|
8.9 |
% |
317 |
339 |
|
6.9 |
% |
|
90 |
% |
|
92 |
% |
|
1.6 |
% |
Manachised and franchised hotels |
112 |
112 |
207 |
218 |
|
5.7 |
% |
250 |
259 |
|
3.7 |
% |
|
83 |
% |
|
84 |
% |
|
1.6 |
% |
Total |
2,050 |
2,050 |
171 |
172 |
|
0.5 |
% |
188 |
189 |
|
0.4 |
% |
|
91 |
% |
|
91 |
% |
|
0.2 |
% |
|
In the third quarter of 2016, the midscale and
upscale hotels that have been in operations for more than 18 months
registered a 7.5% same-hotel RevPAR improvement, mainly driven by a
5.5% increase in ADR and a 1.6-percentage-point increase in
occupancy rate. The difference in the RevPAR of the leased hotels
and that of manachised and franchised hotels in this segment were
mainly due to:
- Among the 182 midscale and upscale hotels presented in the
above table, 66 out of a total of 70 leased hotels (~94%) were
under the JI brand with a higher RevPar, compared to only 60 out of
a total of 112 manachised and franchised hotels (~54%).
- Hotels located in Tier 1 cities recorded a higher RevPAR
compared to those in the lower tier cities. Approximately 50% of JI
hotels and 27% of Starway hotels were located in Tier-1
cities.
RevPAR for the JI brand is higher than that of
the Starway brand due to different brand positioning. However, the
Company does not observe meaningful differences in operations and
performance between leased and manachised/franchised hotels under
the same brand located in the same location.
Similarly, for the economy hotels, the
difference in the RevPAR for leased hotels and that of manachised
and franchised hotels is mainly due to different brand positioning
and locations.
Contact Information
Ida Yu
Sr. Manager of Investor Relations
Tel: +86 (21) 6195 9561
Email: ir@huazhu.com
http://ir.huazhu.com
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