Shares of GreenTree Hospitality Group Ltd. (NYSE: GHG) rose slightly against domestic economic challenge of China, up 1 percent to $12.84 apiece intraday Friday.
The Shanghai-based company said its revenue totaled $35.1 million for the first quarter, representing an increase of 20 percent year-over-year. And its quarterly net income jumped 59 percent to $20.0 million, or 20 cents per American depositary share, from the corresponding period of 2018.
According to the company, the contributions are mainly from the addition of new hotels, increased revenue per available room and membership growth, despite a slowdown in China's domestic economy in the premarket analysis from CapitalWatch.
GreenTree expanded its hotel business in 292 cities across China, with a total of 2,829 hotels and 225,757 hotel rooms in operation ended March 2019, compared with 2,757 hotels and 221,529 hotel rooms one year ago respectively.
“During the quarter we opened 102 new hotels, continued to grow our pipeline, and remained on track to open more new hotels in the remaining part of this year," Alex Xu, the chief executive officer of GreenTree, said in the statement.
The company focuses on the a network of hotels at varying cost and amenity levels, targeting a wide variety of business and pleasure travelers. Among all the 102 newly-opened hotels, 44 hotels belong to the mid-scale segment,14 in the business to mid-to-up-scale segment and the other 44 in the economy segment. Regarding geographical coverage of the hotels opened, 6 hotels were in Tier 1 cities including Beijing, Shanghai, Shenzhen and Guangzhou, 20 in Tier 2 cities including 32 major cities, and the remaining 76 hotels in other cities in China.
“We are blessed to be based in China where there is such a huge consumer economy,” Xu said in the interview with CapitalWatch in March.
The company completed a number of strategic initiatives during the first quarter. It invested in China Gingko Education Group Company Limited, reported a strategic investment with the Argyle hotel network, announced an acquisition agreement Zhejiang New Century Hotel Management Co., Ltd as well as Urban Hotel Group.
GreenTree said the company intend to develop more hotels under the Wumian and GreenTree Apartment brands to meet the taste of young business travelers. GreenTree Apartment provides long-term apartment rental services to urban white collars, especially newcomers to cities, with family-friendly living space and more community space.
Looking ahead, GreenTree expects to grow 20 percent to 25 percent for the full year 2019 in its total revenues from 2018.