UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of November 2024
Commission File Number: 001-34656
H World Group Limited
(Registrant’s name)
No. 1299 Fenghua Road
Jiading District
Shanghai
People’s Republic of China
(86) 21 6195-2011
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F x
Form 40-F ¨
EXPLANATORY NOTE
Exhibit 99.1 (excluding the bullet point regarding
the expected revenue growth range for the fourth quarter of 2024 compared to the fourth quarter of 2023 on page 2 and the paragraphs
under the headings “Guidance” and “Conference Call”) of this current report on Form 6-K (the “Report”)
shall be incorporated by reference into the Company’s registration statements on Form F-3, which became effective on July 17,
2024 (Registration No. 333-280844), and shall be a part thereof from the date on which this Report is furnished, to the extent not
superseded by documents or reports subsequently filed or furnished.
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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H World Group Limited |
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(Registrant) |
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| Date: November 26, 2024 |
By: |
/s/ Qi Ji |
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Name: |
Qi Ji |
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Title: |
Executive Chairman of the Board of Directors |
Exhibit 99.1
Contact Information
Investor Relations
Tel: +86 (21) 6195 9561
Email: ir@hworld.com
https://ir.hworld.com
H World Group Limited Reports Third Quarter
of 2024 Unaudited Financial Results
| · | A
total of 10,845 hotels or 1,062,546 hotel rooms in operation as of September 30, 2024. |
| · | Hotel
turnover1 increased 10.7% year-over-year to RMB26.0 billion in the third
quarter of 2024. Excluding Steigenberger Hotels GmbH and its subsidiaries (which are collectively
referred to as Deutsche Hospitality, “DH”, or “Legacy-DH”),
hotel turnover from the Legacy-Huazhu (“Huazhu”) segment increased 11.0%
year-over-year in the third quarter of 2024; and hotel turnover from the Legacy-DH segment
increased 7.8% year-over-year in the third quarter of 2024. |
| · | Revenue
increased 2.4% year-over-year to RMB6.4 billion (US$918 million)2 in the
third quarter of 2024, within the previously announced 2% to 5% revenue increase guidance
as compared to the third quarter of 2023. Revenue from the Legacy-Huazhu segment in the third
quarter of 2024 increased 1.0% year-over-year, in line with the previously announced 1% to
4% guidance; and revenue from the Legacy-DH segment in the third quarter of 2024 increased
8.9% year-over-year. |
| · | Net
income attributable to H World Group Limited was RMB1.3 billion (US$181 million) in the third
quarter of 2024, compared with RMB1.3 billion in the third quarter of 2023 and RMB1.1 billion
in the previous quarter. Net income attributable to H World Group Limited from the Legacy-Huazhu
segment was RMB1.4 billion in the third quarter of 2024, compared with RMB1.4 billion in
the third quarter of 2023 and RMB1.0 billion in the previous quarter. Net loss attributable
to H World Group Limited from the Legacy-DH segment was RMB83 million, which included RMB81 million of one-off restructuring costs, in the third quarter
of 2024, compared with a net loss of RMB37 million in the third quarter of 2023 and a net
income of RMB34 million in the previous quarter. |
| · | EBITDA
(non-GAAP) in the third quarter of 2024 was RMB2.0 billion (US$286 million), compared with
RMB2.1 billion in the third quarter of 2023 and RMB1.9 billion in the previous quarter. |
| · | Adjusted
EBITDA (non-GAAP), which excluded share-based compensation expenses, gain (loss) from fair
value changes of equity securities, net foreign exchange gain (loss), and gain (loss) on
disposal of investments from EBITDA (non-GAAP), was RMB2.1 billion (US$300 million) in the
third quarter of 2024, compared with RMB2.3 billion in the third quarter of 2023 and RMB2.0
billion in the previous quarter. |
| 1 | Hotel
turnover refers to total transaction value of room and non-room revenue from H World hotels
(i.e., leased and operated, manachised and franchised hotels). |
| 2 | The conversion
of Renminbi (“RMB”) into United States dollars (“US$”)
is based on the exchange rate of US$1.00=RMB7.0176 on September 30, 2024, 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. |
| · | Adjusted
EBITDA by segment is our segment measure. Adjusted EBITDA from the Legacy-Huazhu segment
was RMB2.1 billion in the third quarter of 2024, compared with RMB2.3 billion in the third
quarter of 2023 and RMB1.9 billion in the previous quarter. Adjusted EBITDA from the Legacy-DH
segment was RMB21 million in the third quarter of 2024, compared with RMB73 million in the
third quarter of 2023 and RMB131 million in the previous quarter. |
| · | For
the fourth quarter of 2024, H World expects its revenue growth to be in the range of 1%-5%
compared to the fourth quarter of 2023, and also in the range of 1%-5% excluding DH. |
Singapore/Shanghai, China, November 26,
2024 – H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World”, the “Company”, “we”
or “our”), a key player in the global hotel industry, today announced its unaudited financial results for the third
quarter ended September 30, 2024.
As of September 30, 2024, H World’s
worldwide hotel network in operation totaled 10,845 hotels and 1,062,546 rooms, including 138 hotels and 27,687 rooms from DH. During
the third quarter of 2024, our Legacy-Huazhu business opened 774 hotels, including 3 leased and owned hotels, and 771 manachised and
franchised hotels, and closed a total of 217 hotels, including 25 leased and owned hotels and 192 manachised and franchised hotels. As
of September 30, 2024, H World had a total of 2,925 unopened hotels in the pipeline, including 2,899 hotels from the Legacy-Huazhu
business and 26 hotels from the Legacy-DH business.
Legacy-Huazhu
– Third Quarter of 2024 Operational Highlights
As of September 30, 2024, Legacy-Huazhu
had 10,707 hotels in operation, including 570 leased and owned hotels, and 10,137 manachised and franchised hotels. In addition, as of
the same date, Legacy-Huazhu had 1,034,859 hotel rooms in operation, including 83,861 rooms under the lease and ownership model, and
950,998 rooms under the manachise and franchise models. Legacy-Huazhu also had 2,899 unopened hotels in its pipeline, including 6 leased
and owned hotels, and 2,893 manachised and franchised hotels. The following discusses Legacy-Huazhu’s revenue per available room
(“RevPAR”), average daily room rate (“ADR”) and occupancy rate for leased and owned Huazhu hotels,
as well as manachised and franchised Huazhu hotels for the periods indicated.
| · | The
ADR was RMB301 in the third quarter of 2024, compared with RMB324 in the third quarter of
2023 and RMB296 in the previous quarter. |
| · | The
occupancy rate for all the Legacy-Huazhu hotels in operation was 84.9% in the third quarter
of 2024, compared with 85.9% in the third quarter of 2023 and 82.6% in the previous quarter. |
| · | Blended
RevPAR was RMB256 in the third quarter of 2024, compared with RMB278 in the third quarter
of 2023 and RMB244 in the previous quarter. |
| · | For
all the Legacy-Huazhu hotels which had been in operation for at least 18 months, the same-hotel
RevPAR was RMB258 in the third quarter of 2024, representing a 10.3% decline from RMB288
in the third quarter of 2023, with a 8.4% decrease in same-hotel ADR and a 1.8 percentage-point
decrease in same-hotel occupancy rate. |
Legacy-DH –
Third Quarter of 2024 Operational Highlights
As of September 30, 2024, Legacy-DH had
138 hotels in operation, including 77 leased hotels, and 61 manachised and franchised hotels. In addition, as of the same date, Legacy-DH
had 27,687 hotel rooms in operation, including 15,700 rooms under the lease model, and 11,987 rooms under the manachise and franchise
models. Legacy-DH also had 26 unopened hotels in the pipeline, including 12 leased hotels and 14 manachised and franchised hotels. The
following discusses Legacy-DH’s RevPAR, ADR and occupancy rate for leased as well as manachised and franchised DH hotels (excluding
hotels temporarily closed) for the periods indicated.
| · | The ADR was EUR117 in the third quarter of 2024, compared with
EUR114 in the third quarter of 2023 and EUR120 in the previous quarter. |
| · | The occupancy rate for all Legacy-DH hotels in operation was
69.8% in the third quarter of 2024, compared with 69.0% in the third quarter of 2023 and 68.3% in the previous quarter. |
| · | Blended RevPAR was EUR82 in the third quarter of 2024, compared
with EUR79 in the third quarter of 2023 and EUR82 in the previous quarter. |
Jin Hui, CEO of H World commented: “After
reaching the milestone of 10,000 hotels in the second quarter, we continued our fast-paced, high-quality network growth and opened 774
new hotels in China in the third quarter of 2024. This quarter, Legacy-Huazhu’s blended RevPAR declined by 8% year-over-year primarily
due to a high ADR base in the same period last year and unfavorable weather. Our occupancy rate remained solid at 85% despite our ongoing
rapid hotel network expansion. Going forward, we will continue to emphasize the importance of sustainable high-quality growth. We aim
to expand our presence across all regions and continue penetrating into lower-tier cities in China, thereby reaching more of China’s
hotel market with our high-quality hotel products with excellent services.”
“Regarding our business outside China,
our Legacy-DH business recorded a 3.7% year-over-year blended RevPAR increase in the third quarter of 2024. We continued focusing on
cost reduction in our European business, while at the same time seeking growth opportunities in the Asia-Pacific (APAC) and in the Middle
East areas.”
Third Quarter of 2024 Unaudited Financial
Results
| (RMB in millions) | |
Q3 2023 | | |
Q2 2024 | | |
Q3 2024 | |
| Revenue: | |
| | |
| | |
| |
| Leased and owned hotels | |
| 3,878 | | |
| 3,681 | | |
| 3,690 | |
| Manachised and franchised hotels | |
| 2,268 | | |
| 2,334 | | |
| 2,602 | |
| Others | |
| 142 | | |
| 133 | | |
| 150 | |
| Total revenue | |
| 6,288 | | |
| 6,148 | | |
| 6,442 | |
Revenue in the third quarter of 2024 was
RMB6.4 billion (US$918 million), representing a 2.4% year-over-year increase and a 4.8% quarter-over-quarter increase. Revenue from the
Legacy-Huazhu segment in the third quarter of 2024 was RMB5.2 billion, representing a 1.0% year-over-year increase and a 6.9% quarter-over-quarter
increase. Our year-over-year revenue growth rate was negatively affected by our selected closures of several underperforming leased and
owned hotels, as well as the decline in RevPAR. Revenue from the Legacy-DH segment in the third quarter of 2024 was RMB1.3 billion, representing
an 8.9% year-over-year increase and a 3.0% quarter-over-quarter decrease. The year-over-year increase was attributable to both business
recovery and our network expansion.
Revenue from leased and owned hotels in
the third quarter of 2024 was RMB3.7 billion (US$526 million), representing a 4.8% year-over-year decrease and a 0.2% quarter-over-quarter
increase. Revenue from leased and owned hotels from the Legacy-Huazhu segment in the third quarter of 2024 was RMB2.5 billion, representing
a 10.4% year-over-year decrease, due mainly to our selected closures of several underperforming leased and owned hotels in operation.
Revenue from leased hotels from the Legacy-DH segment in the third quarter of 2024 was RMB1.2 billion, representing an 8.8% year-over-year
increase.
Revenue from manachised and franchised hotels
in the third quarter of 2024 was RMB2.6 billion (US$371 million), representing a 14.7% year-over-year increase and an 11.5% quarter-over-quarter
increase. Revenue from manachised and franchised hotels from the Legacy-Huazhu segment in the third quarter of 2024 was RMB2.6 billion,
representing a 14.7% year-over-year increase, driven by our hotel network expansion. Revenue from manachised and franchised hotels from
the Legacy-DH segment in the third quarter of 2024 was RMB34 million, representing a 13.3% year-over-year increase.
Other revenue represents revenue generated
from businesses other than our hotel operations, which mainly includes revenue from the provision of IT products and services, as well
as Huazhu Mall™ and other revenue from the Legacy-DH segment, totaling RMB150 million (US$21
million) in the third quarter of 2024, compared to RMB142 million in the third quarter of 2023 and RMB133 million in the previous quarter.
| (RMB in millions) | |
Q3 2023 | | |
Q2 2024 | | |
Q3 2024 | |
| Operating costs and expenses: | |
| | |
| | |
| |
| Hotel operating costs | |
| (3,613 | ) | |
| (3,731 | ) | |
| (3,799 | ) |
| Other operating costs | |
| (7 | ) | |
| (6 | ) | |
| (11 | ) |
| Selling and marketing expenses | |
| (289 | ) | |
| (317 | ) | |
| (303 | ) |
| General and administrative expenses | |
| (539 | ) | |
| (602 | ) | |
| (672 | ) |
| Pre-opening expenses | |
| (11 | ) | |
| (19 | ) | |
| (19 | ) |
| Total operating costs and expenses | |
| (4,459 | ) | |
| (4,675 | ) | |
| (4,804 | ) |
Hotel operating costs in the third quarter
of 2024 were RMB3.8 billion (US$541 million), compared to RMB3.6 billion in the third quarter of 2023 and RMB3.7 billion in the previous
quarter. The year-over-year increase was mainly due to rising personnel costs as our hotel network continues to expand. Hotel operating
costs from the Legacy-Huazhu segment in the third quarter of 2024 were RMB2.8 billion, which represented 54.3% of the quarter’s
Huazhu revenue, compared to RMB2.7 billion or 52.0% of Huazhu revenue in the third quarter of 2023 and RMB2.7 billion or 56.7% in the
previous quarter. Hotel operating costs from the Legacy-DH segment in the third quarter of 2024 were RMB996 million, which represented
77.8% of DH revenue, compared to RMB953 million or 81.1% of DH revenue in the third quarter of 2023, and RMB995 million or 75.4% in the
previous quarter.
Selling and marketing expenses in the
third quarter of 2024 were RMB303 million (US$43 million), compared to RMB289 million in the third quarter of 2023 and RMB317 million
in the previous quarter. Selling and marketing expenses from the Legacy-Huazhu segment in the third quarter of 2024 were RMB186 million,
which represented 3.6% of this quarter’s Huazhu revenue, compared to RMB177 million or 3.5% of Huazhu revenue in the third quarter
of 2023, and RMB193 million or 4.0% for the previous quarter. Selling and marketing expenses from the Legacy-DH segment in the third
quarter of 2024 were RMB117 million, which represented 9.1% of revenue, compared to RMB112 million or 9.5% of DH revenue in the third
quarter of 2023, and RMB124 million or 9.4% for the previous quarter.
General and administrative expenses in
the third quarter of 2024 were RMB672 million (US$96 million), compared to RMB539 million in the third quarter of 2023 and RMB602 million
in the previous quarter. General and administrative expenses from the Legacy-Huazhu segment in the third quarter of 2024 were RMB457
million, which represented 8.9% of this quarter’s Huazhu revenue, compared to RMB417 million or 8.2% of Huazhu revenue in the third
quarter of 2023 and RMB483 million or 10.0% of Huazhu revenue in the previous quarter. The year-over-year expense increase was mainly
due to rising headcount as well as an increase in share-based compensation to attract and retain core employees who are key to our sustainable
long-term business growth. General and administrative expenses from the Legacy-DH segment in the third quarter of 2024 were RMB215 million,
which represented 16.8% of DH revenue, compared to RMB122 million or 10.4% of DH revenue in the third quarter of 2023 and RMB119 million
or 9.0% in the previous quarter. The year-over-year and quarter-over-quarter DH expense increase was primarily due to one-off DH restructuring
costs of RMB81 million.
Pre-opening expenses in the third quarter
of 2024 were primarily related to the Legacy-Huazhu segment and totaled RMB19 million (US$3 million), compared to RMB11 million in the
third quarter of 2023 and RMB19 million in the previous quarter.
Other operating income, net in the third
quarter of 2024 was RMB85 million (US$12 million), compared to RMB80 million in the third quarter of 2023 and RMB99 million in the previous
quarter.
Income from operations in the third quarter
of 2024 was RMB1.7 billion (US$245 million), compared RMB1.9 billion in the third quarter of 2023 and RMB1.6 billion in the previous
quarter. Income from operations from the Legacy-Huazhu segment in the third quarter of 2024 was RMB1.8 billion, compared to RMB1.9 billion
in the third quarter of 2023 and RMB1.5 billion in the previous quarter. After the one-off restructuring costs of RMB81 million mentioned
above, Legacy-DH segment had a loss from operations of RMB40 million in the third quarter of 2024, compared to income of RMB3 million
in the third quarter of 2023 and RMB73 million in the previous quarter.
Operating margin, defined as income from
operations as a percentage of revenue, was 26.7% in the third quarter of 2024, compared with 30.4% in the third quarter of 2023 and 25.6%
for the previous quarter. Operating margin from the Legacy-Huazhu segment in the third quarter of 2024 was 34.2%, compared with 37.3%
in the third quarter of 2023 and 31.0% in the previous quarter. The year-over-year margin contraction was mainly due to the decline in
hotel RevPAR from a high base last year, and the increase in share-based compensation mentioned above. Operating margin from the Legacy-DH
segment in the third quarter of 2024 was a negative 3.1%, compared with a positive 0.3% in the third quarter of 2023 and a positive 5.5%
in the previous quarter. The margin contraction was due primarily to the one-off restructuring costs.
Other income, net in the third quarter
of 2024 was RMB1 million, compared to RMB24 million in the third quarter of 2023 and RMB24 million in the previous quarter.
Losses from fair value changes of equity securities
in the third quarter of 2024 were RMB34 million (US$5 million), compared to RMB9 million in the third quarter of 2023, and RMB51
million in the previous quarter. Losses from fair value changes of equity securities mainly represent the unrealized losses from our
investments in equity securities with readily determinable fair values.
Income tax expense in the third quarter
of 2024 was RMB382 million (US$54 million), compared to RMB421 million in the third quarter of 2023 and RMB423 million in the previous
quarter.
Net income attributable to H World Group Limited
in the third quarter of 2024 was RMB1.3 billion (US$181 million), compared with RMB1.3 billion in the third quarter of 2023 and RMB1.1
billion in the previous quarter. Net income attributable to H World Group Limited from the Legacy-Huazhu segment was RMB1.4 billion in
the third quarter of 2024, compared with RMB1.4 billion in the third quarter of 2023 and RMB1.0 billion in the previous quarter. Net
loss attributable to H World Group Limited from the Legacy-DH segment was RMB83 million, which included RMB81 million of one-off restructuring costs, in the third quarter of 2024, compared with a
net loss of RMB37 million in the third quarter of 2023 and a net income of RMB34 million in the previous quarter.
EBITDA (non-GAAP) in the third quarter
of 2024 was RMB2.0 billion (US$286 million), compared with RMB2.1 billion in the third quarter of 2023 and RMB1.9 billion in the previous
quarter.
Adjusted EBITDA (non-GAAP), which excluded
share-based compensation expenses, gain (loss) from fair value changes of equity securities, net foreign exchange gain (loss), and gain
(loss) on disposal of investments from EBITDA (non-GAAP), was RMB2.1 billion (US$300 million) in the third quarter of 2024, compared
with RMB2.3 billion in the third quarter of 2023 and RMB2.0 billion in the previous quarter. Adjusted EBITDA from the Legacy-Huazhu segment,
which is a segment measure, was RMB2.1 billion in the third quarter of 2024, compared with RMB2.3 billion in the third quarter of 2023
and RMB1.9 billion in the previous quarter. Adjusted EBITDA from the Legacy-DH segment, which is a segment measure, was RMB21 million
in the third quarter of 2024, compared with RMB73 million in the third quarter of 2023 and RMB131 million in the previous quarter.
To better reflect the profitability of our core
business, we have redefined the non-GAAP measure of adjusted EBITDA, and therefore the above adjusted EBITDA for the third quarter of
2023 has been restated.
Cash flow. Operating cash inflow in the
third quarter of 2024 was RMB1.7 billion (US$242 million). Investing cash inflow in the third quarter of 2024 was RMB166 million (US$23
million). Financing cash outflow in the third quarter of 2024 was RMB2.1 billion (US$300 million),
including RMB1.4 billion of dividends paid.
Cash, cash equivalents and restricted cash.
As of September 30, 2024, the Company had a total balance of cash and cash equivalents of RMB7.2 billion (US$1.0 billion) and
restricted cash of RMB693 million (US$98 million).
Debt financing. As of September 30,
2024, the Company had a total debt and net cash balance of RMB5.4 billion (US$769 million) and RMB2.5 billion (US$362 million), respectively;
the unutilized credit facility available to the Company was RMB3.6 billion.
Guidance
For the fourth quarter of 2024, H World expects
its revenue growth to be in the range of 1%-5% compared to the fourth quarter of 2023, and also in the range of 1%-5% excluding DH.
The above forecast reflects the Company’s
current and preliminary view, which is subject to change.
Conference Call
H World’s management will host a conference
call at 8 p.m. U.S. Eastern time on Tuesday, November 26, 2024 (9 a.m. Hong Kong time on Wednesday, November 27,
2024) following the announcement.
To join by phone, all participants must pre-register
this conference call using the Participant Registration link of https://register.vevent.com/register/BI7e6f2fa9b90d4da380448e7718662186.
Upon registration, each participant will receive details for the conference call, including dial-in numbers, conference call passcode
and a unique access PIN.
A live webcast of the call can be accessed at
https://edge.media-server.com/mmc/p/fk25qthx or the Company’s website at https://ir.hworld.com/news-and-events/events-calendar.
A replay of the conference call will be available
for twelve months from the date of the conference at the Company’s website, https://ir.hworld.com/news-and-events/events-calendar.
Use of Non-GAAP Financial Measures
To supplement the Company’s unaudited consolidated
financial results presented in accordance with U.S. Generally-Accepted Accounting Principles (“GAAP”), the Company
uses the following non-GAAP measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission (“SEC”):
adjusted net income (loss) attributable to H World Group Limited excluding share-based compensation expenses, gain (loss) from fair value
changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments; adjusted basic and diluted
earnings (losses) per share/ADS excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities,
foreign exchange gain (loss), net and gain (loss) on disposal of investments; EBITDA; adjusted EBITDA excluding share-based compensation
expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of
investments. 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 “Unaudited 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, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss),
net and gain (loss) on disposal of investments 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, gain (loss) from fair value changes of equity securities,
foreign exchange gain (loss), net and gain (loss) on disposal of investments is that share-based compensation expenses, gain (loss) from
fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments have been and may
continue to be significant and recurring 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 information provides investors with a useful tool for comparability between periods because it excludes depreciation and amortization
expense attributable to capital expenditures. The Company also uses adjusted EBITDA to assess operating results of its hotels in operation.
The Company believes that the exclusion of share-based compensation expenses, gain (loss) from fair value changes of equity securities,
foreign exchange gain (loss), net and gain (loss) on disposal of investments helps facilitate year-over-year comparisons of the results
of operations as the share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain
(loss), net and gain (loss) on disposal of investments may not be indicative of Company operating performance.
Therefore, the Company believes adjusted EBITDA
more closely reflects the financial performance capability of our hotels. 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 (including land use rights), 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,
gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments
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 depreciation
and amortization, interest income, interest expense, income tax expense, share-based compensation expenses, gain (loss) from fair value
changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments all 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 H World Group Limited
Originated in China, H World Group Limited is
a key player in the global hotel industry. As of September 30, 2024, H World operated 10,845 hotels with 1,062,546 rooms in operation
in 18 countries. H World’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange
Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX,
Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels. In addition, H World also has the rights as master
franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.
H World’s business includes leased and
owned, manachised and franchised models. Under the lease and ownership model, H World directly operates hotels typically located on leased
or owned properties. Under the manachise model, H World manages manachised hotels through the on-site hotel managers that H World appoints,
and H World collects fees from franchisees. Under the franchise model, H World provides training, reservations and support services to
the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. H World applies a consistent standard
and platform across all of its hotels. As of September 30, 2024, H World operated 9 percent of its hotel rooms under the lease and
ownership model, and 91 percent under the manachise and franchise model.
For more information, please visit H World’s
website: https://ir.hworld.com.
| | |
| | | |
Safe Harbor Statement Under the U.S. Private
Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and
uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition;
economic conditions; the regulatory environment; our ability to attract and retain customers and leverage our brands; trends and competition
in the lodging industry; the expected growth of demand for lodging; and other factors and risks detailed in our filings with the U.S.
Securities and Exchange Commission. 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.
H World undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
—Financial Tables and Operational Data—
| H
World Group Limited |
| Unaudited
Condensed Consolidated Balance Sheets |
| | |
December 31,
2023 | | |
September 30,
2024 | |
| | |
RMB | | |
RMB | | |
US$3 | |
| | |
(in millions) | |
| ASSETS | |
| | |
| | |
| |
| Current assets: | |
| | | |
| | | |
| | |
| Cash and cash equivalents | |
| 6,946 | | |
| 7,247 | | |
| 1,033 | |
| Restricted cash | |
| 764 | | |
| 693 | | |
| 98 | |
| Short-term investments | |
| 2,189 | | |
| 735 | | |
| 105 | |
| Accounts receivable, net | |
| 755 | | |
| 863 | | |
| 123 | |
| Loan receivables, net | |
| 184 | | |
| 149 | | |
| 21 | |
| Amounts due from related parties,
current | |
| 210 | | |
| 276 | | |
| 39 | |
| Inventories | |
| 59 | | |
| 63 | | |
| 9 | |
| Other current
assets, net | |
| 949 | | |
| 856 | | |
| 122 | |
| Total current assets | |
| 12,056 | | |
| 10,882 | | |
| 1,550 | |
| | |
| | | |
| | | |
| | |
| Property and equipment, net | |
| 6,097 | | |
| 5,971 | | |
| 851 | |
| Intangible assets, net | |
| 5,280 | | |
| 5,302 | | |
| 756 | |
| Operating lease right-of-use assets | |
| 25,658 | | |
| 25,691 | | |
| 3,661 | |
| Finance lease right-of-use assets | |
| 2,171 | | |
| 2,306 | | |
| 329 | |
| Land use rights, net | |
| 181 | | |
| 176 | | |
| 25 | |
| Long-term investments | |
| 2,564 | | |
| 2,427 | | |
| 346 | |
| Goodwill | |
| 5,318 | | |
| 5,309 | | |
| 756 | |
| Amounts due from related parties, non-current | |
| 25 | | |
| 26 | | |
| 4 | |
| Loan receivables, net | |
| 163 | | |
| 180 | | |
| 26 | |
| Other assets, net | |
| 663 | | |
| 689 | | |
| 97 | |
| Deferred tax assets | |
| 1,043 | | |
| 1,031 | | |
| 147 | |
| Assets held for sale | |
| 2,313 | | |
| 2,049 | | |
| 292 | |
| Total assets | |
| 63,532 | | |
| 62,039 | | |
| 8,840 | |
| | |
| | | |
| | | |
| | |
| LIABILITIES AND EQUITY | |
| | | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | | |
| | |
| Short-term debt | |
| 4,049 | | |
| 892 | | |
| 128 | |
| Accounts payable | |
| 1,019 | | |
| 1,026 | | |
| 146 | |
| Amounts due to related parties | |
| 77 | | |
| 90 | | |
| 13 | |
| Salary and welfare payables | |
| 1,067 | | |
| 719 | | |
| 102 | |
| Deferred revenue | |
| 1,637 | | |
| 1,812 | | |
| 258 | |
| Operating lease liabilities, current | |
| 3,609 | | |
| 3,483 | | |
| 496 | |
| Finance lease liabilities, current | |
| 45 | | |
| 50 | | |
| 7 | |
| Accrued expenses and other current
liabilities | |
| 3,261 | | |
| 3,394 | | |
| 484 | |
| Dividends payable | |
| 2,085 | | |
| 0 | | |
| 0 | |
| Income tax payable | |
| 562 | | |
| 942 | | |
| 134 | |
| Total current liabilities | |
| 17,411 | | |
| 12,408 | | |
| 1,768 | |
| | |
| | | |
| | | |
| | |
| Long-term debt | |
| 1,265 | | |
| 4,499 | | |
| 641 | |
| Operating lease liabilities, non-current | |
| 24,215 | | |
| 24,240 | | |
| 3,454 | |
| Finance lease liabilities, non-current | |
| 2,697 | | |
| 2,886 | | |
| 411 | |
| Deferred revenue | |
| 1,072 | | |
| 1,285 | | |
| 183 | |
| Other long-term liabilities | |
| 1,118 | | |
| 1,387 | | |
| 199 | |
| Deferred tax liabilities | |
| 845 | | |
| 817 | | |
| 116 | |
| Retirement benefit obligations | |
| 124 | | |
| 122 | | |
| 17 | |
| Liabilities held for sale | |
| 2,536 | | |
| 2,179 | | |
| 311 | |
| Total liabilities | |
| 51,283 | | |
| 49,823 | | |
| 7,100 | |
| | |
| | | |
| | | |
| | |
| Equity: | |
| | | |
| | | |
| | |
| Ordinary shares | |
| 0 | | |
| 0 | | |
| 0 | |
| Treasury shares | |
| (906 | ) | |
| (2,787 | ) | |
| (397 | ) |
| Additional paid-in capital | |
| 11,861 | | |
| 12,060 | | |
| 1,718 | |
| Retained earnings | |
| 794 | | |
| 2,400 | | |
| 342 | |
| Accumulated other
comprehensive income | |
| 386 | | |
| 459 | | |
| 65 | |
| Total H World Group Limited shareholders' equity | |
| 12,135 | | |
| 12,132 | | |
| 1,728 | |
| Noncontrolling interest | |
| 114 | | |
| 84 | | |
| 12 | |
| Total equity | |
| 12,249 | | |
| 12,216 | | |
| 1,740 | |
| Total liabilities and equity | |
| 63,532 | | |
| 62,039 | | |
| 8,840 | |
3 The conversion of Renminbi (“RMB”) into
United States dollars (“US$”) is based on the exchange rate of US$1.00=RMB7.0176 on September 30, 2024, as set forth in H.10
statistical release of the U.S. Federal Reserve Board and available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.
| H
World Group Limited |
| Unaudited
Condensed Consolidated Statements of Comprehensive Income |
| | |
Quarter
Ended | |
| | |
September 30,
2023 | | |
June 30,
2024 | | |
September 30,
2024 | |
| | |
RMB | | |
RMB | | |
RMB | | |
US$ | |
| | |
(in millions, except shares, per share
and per ADS data) | |
| Revenue: | |
| | |
| | |
| | |
| |
| Leased and owned hotels | |
| 3,878 | | |
| 3,681 | | |
| 3,690 | | |
| 526 | |
| Manachised and franchised hotels | |
| 2,268 | | |
| 2,334 | | |
| 2,602 | | |
| 371 | |
| Others | |
| 142 | | |
| 133 | | |
| 150 | | |
| 21 | |
| Total revenue | |
| 6,288 | | |
| 6,148 | | |
| 6,442 | | |
| 918 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating costs and expenses: | |
| | | |
| | | |
| | | |
| | |
| Hotel operating costs: | |
| | | |
| | | |
| | | |
| | |
| Rents | |
| (1,118 | ) | |
| (1,091 | ) | |
| (1,088 | ) | |
| (155 | ) |
| Utilities | |
| (185 | ) | |
| (149 | ) | |
| (194 | ) | |
| (28 | ) |
| Personnel costs | |
| (1,186 | ) | |
| (1,337 | ) | |
| (1,371 | ) | |
| (195 | ) |
| Depreciation and amortization | |
| (330 | ) | |
| (315 | ) | |
| (315 | ) | |
| (45 | ) |
| Consumables, food and beverage | |
| (353 | ) | |
| (327 | ) | |
| (337 | ) | |
| (48 | ) |
| Others | |
| (441 | ) | |
| (512 | ) | |
| (494 | ) | |
| (70 | ) |
| Total hotel operating costs | |
| (3,613 | ) | |
| (3,731 | ) | |
| (3,799 | ) | |
| (541 | ) |
| Other operating costs | |
| (7 | ) | |
| (6 | ) | |
| (11 | ) | |
| (2 | ) |
| Selling and marketing expenses | |
| (289 | ) | |
| (317 | ) | |
| (303 | ) | |
| (43 | ) |
| General and administrative expenses | |
| (539 | ) | |
| (602 | ) | |
| (672 | ) | |
| (96 | ) |
| Pre-opening expenses | |
| (11 | ) | |
| (19 | ) | |
| (19 | ) | |
| (3 | ) |
| Total operating costs and expenses | |
| (4,459 | ) | |
| (4,675 | ) | |
| (4,804 | ) | |
| (685 | ) |
| Other operating
income (expense), net | |
| 80 | | |
| 99 | | |
| 85 | | |
| 12 | |
| Income (loss) from operations | |
| 1,909 | | |
| 1,572 | | |
| 1,723 | | |
| 245 | |
| Interest income | |
| 62 | | |
| 56 | | |
| 50 | | |
| 7 | |
| Interest expense | |
| (85 | ) | |
| (84 | ) | |
| (77 | ) | |
| (11 | ) |
| Other income (expense), net | |
| 24 | | |
| 24 | | |
| 1 | | |
| 0 | |
| Gains (losses) from fair value changes of equity securities | |
| (9 | ) | |
| (51 | ) | |
| (34 | ) | |
| (5 | ) |
| Foreign exchange gains (losses) | |
| (148 | ) | |
| (24 | ) | |
| (1 | ) | |
| (0 | ) |
| Income (loss) before income taxes | |
| 1,753 | | |
| 1,493 | | |
| 1,662 | | |
| 236 | |
| Income tax (expense) benefit | |
| (421 | ) | |
| (423 | ) | |
| (382 | ) | |
| (54 | ) |
| Income (Loss) from equity method investments | |
| 20 | | |
| 12 | | |
| 12 | | |
| 2 | |
| Net income (loss) | |
| 1,352 | | |
| 1,082 | | |
| 1,292 | | |
| 184 | |
| Net (income) loss attributable to noncontrolling
interest | |
| (15 | ) | |
| (15 | ) | |
| (19 | ) | |
| (3 | ) |
| Net income (loss) attributable to H
World Group Limited | |
| 1,337 | | |
| 1,067 | | |
| 1,273 | | |
| 181 | |
| | |
| | | |
| | | |
| | | |
| | |
| Gains(losses) from fair value changes of debt securities,
net of tax | |
| - | | |
| (25 | ) | |
| - | | |
| - | |
| Foreign currency translation adjustments,
net of tax | |
| (24 | ) | |
| 1 | | |
| 128 | | |
| 18 | |
| Comprehensive income (loss) | |
| 1,328 | | |
| 1,058 | | |
| 1,420 | | |
| 202 | |
| Comprehensive (income) loss attributable
to noncontrolling interest | |
| (15 | ) | |
| (15 | ) | |
| (19 | ) | |
| (3 | ) |
| Comprehensive income (loss) attributable
to H World Group Limited | |
| 1,313 | | |
| 1,043 | | |
| 1,401 | | |
| 199 | |
| | |
| | | |
| | | |
| | | |
| | |
| Earnings (Losses) per share: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 0.42 | | |
| 0.34 | | |
| 0.41 | | |
| 0.06 | |
| Diluted | |
| 0.41 | | |
| 0.33 | | |
| 0.40 | | |
| 0.06 | |
| | |
| | | |
| | | |
| | | |
| | |
| Earnings (Losses) per ADS: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 4.19 | | |
| 3.40 | | |
| 4.10 | | |
| 0.58 | |
| Diluted | |
| 4.07 | | |
| 3.32 | | |
| 3.99 | | |
| 0.57 | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares used in computation: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 3,188,274,127 | | |
| 3,137,722,145 | | |
| 3,102,868,424 | | |
| 3,102,868,424 | |
| Diluted | |
| 3,355,586,429 | | |
| 3,303,934,814 | | |
| 3,257,589,866 | | |
| 3,257,589,866 | |
H World Group Limited
Unaudited Condensed Consolidated Statements of Cash Flows
| | |
Quarter Ended | |
| | |
September 30, 2023 | | |
June 30, 2024 | | |
September 30, 2024 | |
| | |
RMB | | |
RMB | | |
RMB | | |
US$ | |
| | |
(in millions) | |
| Operating activities: | |
| | | |
| | | |
| | | |
| | |
| Net income (loss) | |
| 1,352 | | |
| 1,082 | | |
| 1,292 | | |
| 184 | |
| | |
| | | |
| | | |
| | | |
| | |
| Share-based compensation | |
| 44 | | |
| 112 | | |
| 79 | | |
| 11 | |
| Depreciation and amortization, and other | |
| 358 | | |
| 337 | | |
| 329 | | |
| 47 | |
| Impairment loss | |
| 5 | | |
| 36 | | |
| 32 | | |
| 5 | |
| Loss (Income) from equity method investments, net of dividends | |
| (18 | ) | |
| 30 | | |
| (9 | ) | |
| (1 | ) |
| Investment (income) loss and foreign exchange (gain) loss | |
| 167 | | |
| 41 | | |
| (15 | ) | |
| (2 | ) |
| Changes in operating assets and liabilities | |
| (583 | ) | |
| 750 | | |
| 43 | | |
| 6 | |
| Other | |
| (144 | ) | |
| (153 | ) | |
| (58 | ) | |
| (8 | ) |
| Net cash provided by (used in) operating activities | |
| 1,181 | | |
| 2,235 | | |
| 1,693 | | |
| 242 | |
| | |
| | | |
| | | |
| | | |
| | |
| Investing activities: | |
| | | |
| | | |
| | | |
| | |
| Capital expenditures | |
| (196 | ) | |
| (203 | ) | |
| (209 | ) | |
| (30 | ) |
| Purchase of investments | |
| (1,846 | ) | |
| (632 | ) | |
| (32 | ) | |
| (5 | ) |
| Proceeds from maturity/sale and return of investments | |
| - | | |
| 1,139 | | |
| 406 | | |
| 58 | |
| Loan advances | |
| (48 | ) | |
| (12 | ) | |
| (75 | ) | |
| (11 | ) |
| Loan collections | |
| 39 | | |
| 53 | | |
| 65 | | |
| 9 | |
| Other | |
| 2 | | |
| 1 | | |
| 11 | | |
| 2 | |
| Net cash provided by (used in) investing activities | |
| (2,049 | ) | |
| 346 | | |
| 166 | | |
| 23 | |
| | |
| | | |
| | | |
| | | |
| | |
| Financing activities: | |
| | | |
| | | |
| | | |
| | |
| Payment of share repurchase | |
| - | | |
| (132 | ) | |
| (496 | ) | |
| (71 | ) |
| Proceeds from debt | |
| 71 | | |
| 53 | | |
| 29 | | |
| 4 | |
| Repayment of debt | |
| (666 | ) | |
| (292 | ) | |
| (135 | ) | |
| (19 | ) |
| Dividend paid | |
| - | | |
| - | | |
| (1,389 | ) | |
| (198 | ) |
| Purchase of prepaid put option | |
| - | | |
| (710 | ) | |
| 0 | | |
| 0 | |
| Other | |
| (18 | ) | |
| (24 | ) | |
| (113 | ) | |
| (16 | ) |
| Net cash provided by (used in) financing activities | |
| (613 | ) | |
| (1,105 | ) | |
| (2,104 | ) | |
| (300 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | |
| (59 | ) | |
| 10 | | |
| 16 | | |
| 2 | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | |
| (1,540 | ) | |
| 1,486 | | |
| (229 | ) | |
| (33 | ) |
| Less: net increase (decrease) in cash and cash equivalents classified within assets held for sale | |
| - | | |
| (15 | ) | |
| (4 | ) | |
| (1 | ) |
| Cash, cash equivalents and restricted cash at the beginning of the period | |
| 7,836 | | |
| 6,664 | | |
| 8,165 | | |
| 1,163 | |
| Cash, cash equivalents and restricted cash at the end of the period | |
| 6,296 | | |
| 8,165 | | |
| 7,940 | | |
| 1,131 | |
H World Group Limited
Unaudited Reconciliation of GAAP and Non-GAAP Results
| | |
Quarter Ended | |
| | |
September 30, 2023 | | |
June 30, 2024 | | |
September 30, 2024 | |
| | |
RMB | | |
RMB | | |
RMB | | |
US$ | |
| | |
(in millions, except shares, per share and per ADS data) | |
| Net income (loss) attributable to H World Group Limited (GAAP) | |
| 1,337 | | |
| 1,067 | | |
| 1,273 | | |
| 181 | |
| Share-based compensation expenses | |
| 44 | | |
| 112 | | |
| 79 | | |
| 11 | |
| (Gain) loss from fair value changes of equity securities | |
| 9 | | |
| 51 | | |
| 34 | | |
| 5 | |
| Foreign exchange (gain) loss, net | |
| 148 | | |
| 24 | | |
| 1 | | |
| 0 | |
| (Gain) loss on disposal of investments | |
| - | | |
| - | | |
| (15 | ) | |
| (2 | ) |
| Adjusted net income attributable to H World Group Limited (non-GAAP) | |
| 1,538 | | |
| 1,254 | | |
| 1,372 | | |
| 195 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjusted earnings (losses) per share (non-GAAP) | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 0.48 | | |
| 0.40 | | |
| 0.44 | | |
| 0.06 | |
| Diluted | |
| 0.47 | | |
| 0.39 | | |
| 0.43 | | |
| 0.06 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjusted earnings (losses) per ADS (non-GAAP) | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 4.82 | | |
| 3.99 | | |
| 4.42 | | |
| 0.63 | |
| Diluted | |
| 4.67 | | |
| 3.88 | | |
| 4.29 | | |
| 0.61 | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares used in computation | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 3,188,274,127 | | |
| 3,137,722,145 | | |
| 3,102,868,424 | | |
| 3,102,868,424 | |
| Diluted | |
| 3,355,586,429 | | |
| 3,303,934,814 | | |
| 3,257,589,866 | | |
| 3,257,589,866 | |
| | |
Quarter Ended | |
| | |
September 30, 2023 | | |
June 30, 2024 | | |
September 30, 2024 | |
| | |
RMB | | |
RMB | | |
RMB | | |
US$ | |
| | |
(in millions, except per share and per ADS data) | |
| Net income (loss) attributable to H World Group Limited (GAAP) | |
| 1,337 | | |
| 1,067 | | |
| 1,273 | | |
| 181 | |
| Interest income | |
| (62 | ) | |
| (56 | ) | |
| (50 | ) | |
| (7 | ) |
| Interest expense | |
| 85 | | |
| 84 | | |
| 77 | | |
| 11 | |
| Income tax expense | |
| 421 | | |
| 423 | | |
| 382 | | |
| 54 | |
| Depreciation and amortization | |
| 352 | | |
| 335 | | |
| 332 | | |
| 47 | |
| EBITDA (non-GAAP) | |
| 2,133 | | |
| 1,853 | | |
| 2,014 | | |
| 286 | |
| Share-based compensation | |
| 44 | | |
| 112 | | |
| 79 | | |
| 11 | |
| (Gain) loss from fair value changes of equity securities | |
| 9 | | |
| 51 | | |
| 34 | | |
| 5 | |
| Foreign exchange (gain) loss, net | |
| 148 | | |
| 24 | | |
| 1 | | |
| 0 | |
| (Gain) loss on disposal of investments | |
| - | | |
| - | | |
| (15 | ) | |
| (2 | ) |
| Adjusted EBITDA (non-GAAP) | |
| 2,334 | | |
| 2,040 | | |
| 2,113 | | |
| 300 | |
H World Group Limited
Segment Financial Summary
| | |
Quarter Ended September 30, 2023 | | |
Quarter Ended June 30, 2024 | | |
Quarter Ended September 30, 2024 | |
| | |
Legacy- Huazhu | | |
Legacy- DH | | |
Legacy- Huazhu | | |
Legacy- DH | | |
Legacy- Huazhu | | |
Legacy- DH | |
| | |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
RMB | |
| | |
(in millions) | | |
(in millions) | | |
(in millions) | |
| Leased and owned hotels | |
| 2,748 | | |
| 1,130 | | |
| 2,395 | | |
| 1,286 | | |
| 2,461 | | |
| 1,229 | |
| Manachised and franchised hotels | |
| 2,238 | | |
| 30 | | |
| 2,305 | | |
| 29 | | |
| 2,568 | | |
| 34 | |
| Others | |
| 127 | | |
| 15 | | |
| 128 | | |
| 5 | | |
| 133 | | |
| 17 | |
| Revenue | |
| 5,113 | | |
| 1,175 | | |
| 4,828 | | |
| 1,320 | | |
| 5,162 | | |
| 1,280 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Depreciation and amortization | |
| 286 | | |
| 66 | | |
| 279 | | |
| 56 | | |
| 271 | | |
| 61 | |
| Adjusted EBITDA | |
| 2,261 | | |
| 73 | | |
| 1,909 | | |
| 131 | | |
| 2,092 | | |
| 21 | |
Operating Results:
Legacy-Huazhu(1)
| | |
Number of hotels | | |
Number of rooms | |
| | |
Opened | | |
Closed (2) | | |
Net added | | |
As of | | |
As of | |
| | |
in Q3 2024 | | |
in Q3 2024 | | |
in Q3 2024 | | |
September 30, 2024 | | |
September 30, 2024 | |
| Leased and owned hotels | |
| 3 | | |
| (25 | ) | |
| (22 | ) | |
| 570 | | |
| 83,861 | |
| Manachised and franchised hotels | |
| 771 | | |
| (192 | ) | |
| 579 | | |
| 10,137 | | |
| 950,998 | |
| Total | |
| 774 | | |
| (217 | ) | |
| 557 | | |
| 10,707 | | |
| 1,034,859 | |
(1) Legacy-Huazhu refers to H World and its subsidiaries, excluding DH.
(2) The reasons for hotel closures mainly included non-compliance with our brand standards, operating losses, and property-related issues. In Q3 2024, we temporarily closed 12 hotels for brand upgrade or business model change purposes.
| | |
As of September 30, 2024 | |
| | |
Number of hotels | | |
Unopened hotels in pipeline | |
| Economy hotels | |
| 5,442 | | |
| 1,082 | |
| Leased and owned hotels | |
| 292 | | |
| 0 | |
| Manachised and franchised hotels | |
| 5,150 | | |
| 1,082 | |
| Midscale, upper-midscale hotels and others | |
| 5,265 | | |
| 1,817 | |
| Leased and owned hotels | |
| 278 | | |
| 6 | |
| Manachised and franchised hotels | |
| 4,987 | | |
| 1,811 | |
| Total | |
| 10,707 | | |
| 2,899 | |
| | |
For the quarter ended | | |
| |
| | |
September 30, | | |
June 30, | | |
September 30, | | |
yoy | |
| | |
2023 | | |
2024 | | |
2024 | | |
change | |
| Average daily room rate (in RMB) | |
| | | |
| | | |
| | | |
| | |
| Leased and owned hotels | |
| 406 | | |
| 375 | | |
| 381 | | |
| -6.0 | % |
| Manachised and franchised hotels | |
| 314 | | |
| 288 | | |
| 294 | | |
| -6.4 | % |
| Blended | |
| 324 | | |
| 296 | | |
| 301 | | |
| -7.0 | % |
| Occupancy rate (as a percentage) | |
| | | |
| | | |
| | | |
| | |
| Leased and owned hotels | |
| 87.8 | % | |
| 85.6 | % | |
| 87.4 | % | |
| -0.3 p.p. | |
| Manachised and franchised hotels | |
| 85.7 | % | |
| 82.3 | % | |
| 84.6 | % | |
| -1.0 p.p. | |
| Blended | |
| 85.9 | % | |
| 82.6 | % | |
| 84.9 | % | |
| -1.0 p.p. | |
| RevPAR (in RMB) | |
| | | |
| | | |
| | | |
| | |
| Leased and owned hotels | |
| 356 | | |
| 321 | | |
| 333 | | |
| -6.4 | % |
| Manachised and franchised hotels | |
| 269 | | |
| 237 | | |
| 249 | | |
| -7.6 | % |
| Blended | |
| 278 | | |
| 244 | | |
| 256 | | |
| -8.1 | % |
Same-hotel operational data by class
Mature hotels in operation for more than 18 months
| | |
Number
of hotels | | |
Same-hotel
RevPAR | | |
Same-hotel
ADR | | |
Same-hotel
Occupancy | |
| | |
As
of
September 30, | | |
For
the quarter
ended September 30, | | |
yoy
change | | |
For the quarter
ended September 30, | | |
yoy
change | | |
For the quarter
ended September 30, | | |
yoy
change | |
| | |
2023 | | |
2024 | | |
2023 | | |
2024 | | |
| | |
2023 | | |
2024 | | |
| | |
2023 | | |
2024 | | |
(p.p.) | |
| Economy hotels | |
| 3,764 | | |
3,764 | | |
222 | | |
197 | | |
-11.0 | % | |
250 | | |
228 | | |
-8.8 | % | |
88.5 | % | |
86.4 | % | |
-2.1 | |
| Leased
and owned hotels | |
| 283 | | |
283 | | |
271 | | |
242 | | |
-10.7 | % | |
302 | | |
271 | | |
-10.3 | % | |
89.8 | % | |
89.4 | % | |
-0.4 | |
| Manachised
and franchised hotels | |
| 3,481 | | |
3,481 | | |
216 | | |
192 | | |
-11.0 | % | |
244 | | |
223 | | |
-8.6 | % | |
88.4 | % | |
86.0 | % | |
-2.4 | |
| Midscale, upper-midscale
hotels and others | |
| 3,271 | | |
3,271 | | |
344 | | |
310 | | |
-9.9 | % | |
398 | | |
365 | | |
-8.3 | % | |
86.4 | % | |
84.9 | % | |
-1.5 | |
| Leased
and owned hotels | |
| 257 | | |
257 | | |
440 | | |
402 | | |
-8.6 | % | |
506 | | |
465 | | |
-8.0 | % | |
87.0 | % | |
86.4 | % | |
-0.6 | |
| Manachised
and franchised hotels | |
| 3,014 | | |
3,014 | | |
331 | | |
298 | | |
-10.1 | % | |
384 | | |
351 | | |
-8.4 | % | |
86.4 | % | |
84.7 | % | |
-1.6 | |
| Total | |
| 7,035 | | |
7,035 | | |
288 | | |
258 | | |
-10.3 | % | |
329 | | |
301 | | |
-8.4 | % | |
87.4 | % | |
85.6 | % | |
-1.8 | |
Operating Results: Legacy-DH(3)
| | |
Number of hotels | | |
Number of
rooms | | |
Unopened hotels
in pipeline | |
| | |
Opened
in Q3 2024 | | |
Closed
in Q3 2024 | | |
Net added
in Q3 2024 | | |
As of
September
30, 2024(4) | | |
As of
September 30,
2024 | | |
As of
September 30,
2024 | |
| Leased hotels | |
| - | | |
| (10 | ) | |
| (10 | ) | |
| 77 | | |
| 15,700 | | |
| 12 | |
| Manachised and franchised hotels | |
| 16 | | |
| (4 | ) | |
| 12 | | |
| 61 | | |
| 11,987 | | |
| 14 | |
| Total | |
| 16 | | |
| (14 | ) | |
| 2 | | |
| 138 | | |
| 27,687 | | |
| 26 | |
(3) Legacy-DH refers to DH.
(4) As of September 30, 2024, a total of 2 hotels were temporarily closed due to repair work.
| | |
For the quarter ended | | |
| |
| | |
September 30, | | |
June 30, | | |
September 30, | | |
yoy | |
| | |
2023 | | |
2024 | | |
2024 | | |
change | |
| Average daily room rate (in EUR) | |
| | | |
| | | |
| | | |
| | |
| Leased hotels | |
| 113 | | |
| 124 | | |
| 118 | | |
| 4.3 | % |
| Manachised and franchised hotels | |
| 116 | | |
| 112 | | |
| 116 | | |
| -0.1 | % |
| Blended | |
| 114 | | |
| 120 | | |
| 117 | | |
| 2.5 | % |
| Occupancy rate (as a percentage) | |
| | | |
| | | |
| | | |
| | |
| Leased hotels | |
| 71.4 | % | |
| 71.2 | % | |
| 72.2 | % | |
| +0.8 p.p. | |
| Manachised and franchised hotels | |
| 65.5 | % | |
| 63.8 | % | |
| 66.6 | % | |
| +1.1 p.p. | |
| Blended | |
| 69.0 | % | |
| 68.3 | % | |
| 69.8 | % | |
| +0.8 p.p. | |
| RevPAR (in EUR) | |
| | | |
| | | |
| | | |
| | |
| Leased hotels | |
| 81 | | |
| 88 | | |
| 85 | | |
| 5.4 | % |
| Manachised and franchised hotels | |
| 76 | | |
| 72 | | |
| 77 | | |
| 1.6 | % |
| Blended | |
| 79 | | |
| 82 | | |
| 82 | | |
| 3.7 | % |
Hotel Portfolio by Brand
| | |
As of September 30, 2024 | |
| | |
Hotels | | |
Rooms | | |
Unopened hotels | |
| | |
in operation | | |
in pipeline | |
| Economy hotels | |
| 5,461 | | |
| 449,937 | | |
| 1,091 | |
| HanTing Hotel | |
| 4,057 | | |
| 355,690 | | |
| 695 | |
| Hi Inn | |
| 551 | | |
| 28,987 | | |
| 237 | |
| Ni Hao Hotel | |
| 393 | | |
| 29,712 | | |
| 135 | |
| Elan Hotel | |
| 215 | | |
| 11,290 | | |
| - | |
| Ibis Hotel | |
| 226 | | |
| 22,013 | | |
| 15 | |
| Zleep Hotels | |
| 19 | | |
| 2,245 | | |
| 9 | |
| Midscale hotels | |
| 4,344 | | |
| 465,743 | | |
| 1,238 | |
| Ibis Styles Hotel | |
| 107 | | |
| 10,456 | | |
| 10 | |
| Starway Hotel | |
| 723 | | |
| 60,381 | | |
| 125 | |
| JI Hotel | |
| 2,708 | | |
| 309,659 | | |
| 827 | |
| Orange Hotel | |
| 806 | | |
| 85,247 | | |
| 276 | |
| Upper midscale hotels | |
| 866 | | |
| 119,356 | | |
| 493 | |
| Crystal Orange Hotel | |
| 224 | | |
| 28,288 | | |
| 152 | |
| CitiGO Hotel | |
| 34 | | |
| 5,283 | | |
| 5 | |
| Manxin Hotel | |
| 162 | | |
| 14,970 | | |
| 69 | |
| Madison Hotel | |
| 125 | | |
| 15,976 | | |
| 82 | |
| Mercure Hotel | |
| 190 | | |
| 30,093 | | |
| 61 | |
| Novotel Hotel | |
| 30 | | |
| 6,743 | | |
| 21 | |
| IntercityHotel(5) | |
| 91 | | |
| 16,389 | | |
| 97 | |
| MAXX(6) | |
| 10 | | |
| 1,614 | | |
| 6 | |
| Upscale hotels | |
| 147 | | |
| 21,693 | | |
| 95 | |
| Jaz in the City | |
| 3 | | |
| 587 | | |
| 1 | |
| Joya Hotel | |
| 7 | | |
| 1,234 | | |
| 1 | |
| Blossom House | |
| 73 | | |
| 3,455 | | |
| 80 | |
| Grand Mercure Hotel | |
| 9 | | |
| 1,796 | | |
| 1 | |
| Steigenberger Hotels & Resorts(7) | |
| 55 | | |
| 14,621 | | |
| 12 | |
| Luxury hotels | |
| 16 | | |
| 2,368 | | |
| 3 | |
| Steigenberger Icon(8) | |
| 9 | | |
| 1,847 | | |
| 2 | |
| Song Hotels | |
| 7 | | |
| 521 | | |
| 1 | |
| Others | |
| 11 | | |
| 3,449 | | |
| 5 | |
| Other hotels(9) | |
| 11 | | |
| 3,449 | | |
| 5 | |
| Total | |
| 10,845 | | |
| 1,062,546 | | |
| 2,925 | |
(5) As
of September 30, 2024, 33 operational hotels and 92 pipeline hotels of IntercityHotel were in China.
(6) As
of September 30, 2024, 5 operational hotels and 5 pipeline hotels of MAXX were in China.
(7) As
of September 30, 2024, 12 operational hotels and 5 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(8) As
of September 30, 2024, 3 operational hotels and 1 pipeline hotel of Steigenberger Icon were in China.
(9) Other hotels include other partner hotels
and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom
House).
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