GreenTree Stock Inches Up 2% on Strong Growth
The Chinese hotel operator, in its first report as a publicly traded company, reported strong revenue and profit in its first quarter results, sending its shares higher today after a rough start on the NYSE.
The stock of GreenTree Hospitality Group Ltd. (NYSE: GHG) inched up today after the company, a leading hotel franchisor in China that debuted in New York in March, reported its first quarter earnings increased 21 percent year-over-year.
The Shanghai-based company said net income was $14.4 million, or 16 cents per American depositary share, in the first three months, compared with $11.9 million, or 13 cents per ADS, for the prior year. Revenue increased 23 percent to $32.7 million in the first quarter.
Responding to the strong earnings, the shares of GreenTree rose 2 percent in trading Tuesday and closed at $13.46 per share.
The company attributed the growth to its increased hotel network spreading across 266 Chinese cities. By March 31, GreenTree was operating 65 more hotels than it had in the fourth quarter of 2017, with 406 units under development.
Occupancy in the first quarter increased slightly to 79 percent from 78 percent in the same period last year, the company reported. The revenue per available room increased 5 percent year-over-year to $19.78.
"We are quite pleased with our start as a public company, and we are confident in our positioning going forward," chairman and chief executive officer of GreenTree, Alex Xu, said in a statement.
Xu also mentioned GreenTree's expansion plans. "We are particularly excited to premier our three new business to mid-to-up-scale brands this year, namely Gme, Gya, and VX. With additional cash on our balance sheet, we intend to make selective acquisitions to further expand our hotel network," he said.
GreenTree said it expected revenue growth for the full year between 20 and 25 percent up from 2017.
"Overall, continued strong economic growth and increasing consumer spending, along with our distinct portfolio of brands, strong pipeline, and asset-light model, should help us continue to deliver strong operational performance and value to our shareholders over the long term," Xu said.
Shares of GreenTree rose 2 percent after the company reported strong growth for the quarter, its first results as a publicly traded company. Stock closed at $13.46 per share Tuesday.
(Source: Thomson Reuters Eikon)
GreenTree, which has nearly 2,300 hotels under franchise, is the fourth-largest economy to mid-scale hotel group in China. The company had a difficult start in New York two months ago, closing on its first day sy $13 per share, $1 less than its IPO price of $14 per share. After wavering near $11 per share through April, the stock is up more than 25 percent over the past 10 days.