GreenTree Hospitality Reports Q1 Profit Surge Despite Revenue Decline
GHG is trading near its 52-week low of $1.11 (0.9% above the low).
Summary
GreenTree Hospitality Group reported a 14.0% revenue decline in Q1 2026, but significantly improved its operating and net income due to strong cost control and operational efficiency. The company also provided guidance for continued revenue decline in its organic hotel business.
Key Events · Earnings and Guidance · GHG
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Revenue Decline
Total revenues decreased by 14.0% year-over-year to RMB227.7 million (US$33.0 million) in Q1 2026.
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Profitability Surge
Income from operations more than doubled to RMB28.7 million (US$4.2 million) from RMB11.3 million in Q1 2025, and net income increased by 79% to RMB14.0 million (US$2.0 million).
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Improved Efficiency Metrics
Adjusted EBITDA increased 34.3% year-over-year to RMB53.2 million (US$7.7 million), and core net income rose 31.7% to RMB23.9 million (US$3.5 million).
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Operational Headwinds
Occupancy rate (62.5%), average daily room rate (RMB152), and restaurant average daily sales (RMB3,270) all decreased year-over-year.
Analysis · GHG · Real Estate & Construction
Despite a 14.0% year-over-year revenue decrease to RMB227.7 million (US$33.0 million), GreenTree Hospitality Group significantly improved its profitability in the first quarter of 2026. Income from operations more than doubled to RMB28.7 million (US$4.2 million) from RMB11.3 million in Q1 2025, and net income increased by 79% to RMB14.0 million (US$2.0 million). This indicates effective cost management and operational efficiency amidst challenging market conditions, particularly as the company's stock trades near its 52-week low. However, the company anticipates continued revenue decline for its organic hotel business by 10-15% year-over-year, reflecting ongoing strategic reviews and a slowdown in hotel openings.
At the time of this filing, GHG was trading at $1.12 on NYSE in the Real Estate & Construction sector, with a market capitalization of approximately $116M. The 52-week trading range was $1.11 to $2.78. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.