SHANGHAI - GreenTree Hospitality Group Ltd. (NYSE: GHG), a prominent hospitality and restaurant management group in China, has declared a cash dividend of $0.10 per ordinary share or American Depositary Share (ADS). Shareholders on record as of the close of trading on September 30, 2024, will be eligible for the dividend, with the expected payment date around October 16, 2024, for ordinary shares and approximately October 23, 2024, for ADS holders.
The total cash distribution for this dividend is anticipated to be in the vicinity of $10 million. This announcement comes as part of GreenTree's ongoing efforts to provide value to its shareholders, which also includes the continuation of its share buyback program.
GreenTree, ranked 11th among the 225 largest global hotel groups by HOTELS magazine in 2023, operates a vast portfolio of hotel and restaurant brands. As of June 30, 2024, the company managed 4,272 hotels and 183 restaurants. It holds the fourth-largest hospitality company position in China, according to the China Hospitality Association. In 2023, GreenTree expanded its restaurant management operations by acquiring Da Niang Dumplings and Bellagio, two prominent chain businesses in China.
The hospitality group emphasizes its commitment to sustainable profitable growth and delivering shareholder value through a diverse range of brands that cater to various market segments, from economy to luxury.
The information in this article is based on a press release statement. The forward-looking statements included in the press release are made under the "safe harbor" provisions of U.S. securities laws and reflect GreenTree's current expectations and projections about future events. The actual outcomes may vary due to numerous factors and risks, both known and unknown. GreenTree does not undertake any obligation to update the forward-looking statements post the date of the press release, except as required by law.
In other recent news, GreenTree Hospitality Group has seen a promising start to 2024, reporting an 8.8% rise in revenue and a significant 76% increase in net income in the first quarter. Despite a decrease in Hotel RevPAR and Restaurant ADS, the company continues to demonstrate robust expansion plans. GreenTree has targeted the opening of 480 hotels this year, primarily franchised and managed, in Tier 3 and lower-tier cities across China. In response to analyst inquiries from Goldman Sachs and UBS, the company confirmed that 62-65% of these new hotels will be located in these areas. On the restaurant front, GreenTree plans to open 45 to 50 new establishments by year-end as part of its repositioning strategy. While the revenue guidance for the restaurant business has been withdrawn due to this strategic shift, the company maintains a positive outlook for the hotel business. Lastly, GreenTree plans to resume its dividend policy next quarter, with potential special dividends under evaluation. These recent developments highlight GreenTree's commitment to strategic growth and shareholder value.
InvestingPro Insights
As GreenTree Hospitality Group Ltd. (NYSE: GHG) announces its cash dividend, investors may find additional insights by considering some key metrics and InvestingPro Tips. With a market capitalization of approximately $258.06 million, the company's valuation reflects a strong free cash flow yield, as indicated by the adjusted P/E ratio of 5.87 for the last twelve months as of Q1 2024. This low earnings multiple suggests that the company's earnings are priced attractively relative to its share price.
Despite the company not paying dividends historically, this recent dividend declaration could signal a shift in GreenTree's approach to shareholder returns. The company's ability to cover interest payments with its cash flows, as suggested by one of the InvestingPro Tips, provides further confidence in its financial stability. Moreover, analysts predict that GreenTree will be profitable this year, which is supported by the fact that it was profitable over the last twelve months.
Investors should note that while GreenTree's price has declined significantly over various time frames, including the last year and the last three months, the company's share price performance over the last decade has been poor. The current price of $2.54 is significantly lower than the fair value estimates provided by analysts ($4.24) and InvestingPro ($3.57), potentially indicating a buying opportunity for value investors.
For those seeking a more comprehensive analysis, InvestingPro offers a total of 11 InvestingPro Tips for GreenTree, which can be accessed by visiting https://www.investing.com/pro/GHG. These tips provide deeper insights into the company's financial health and market position, which can be valuable for making informed investment decisions.
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