Earnings call transcript: Atour Lifestyle Holdings’ Q2 2025 growth and stock surge

Atour Lifestyle Holdings Ltd. reported a robust financial performance for the second quarter of 2025, with significant revenue growth and stock price fluctuations in premarket trading. The company’s net revenues surged by 37.4% year-over-year, reaching RMB 2,469 million. With a market capitalization of $4.8 billion and an impressive 43.38% revenue growth over the last twelve months, Atour continues to demonstrate strong momentum. Despite a slight decrease in adjusted net profit margin, the company’s stock rose 5.98% in premarket trading, reflecting investor optimism. According to InvestingPro analysis, the company maintains a "GREAT" financial health score of 3.62 out of 5.

Key Takeaways

• Net revenues increased 37.4% year-over-year to RMB 2,469 million.
• Premarket stock price rose 5.98%, reaching $37.2.
• Retail revenues soared 79.8% year-over-year.
• Atour launched new hotel and retail products, enhancing its market position.
• The company plans to open 500 new hotels by the end of 2025.

Company Performance

Atour Lifestyle Holdings demonstrated strong growth in Q2 2025, with net revenues increasing by 37.4% year-over-year. The company’s hotel revenues reached RMB 1,299 million, marking a 26.5% increase. Retail revenues showed exceptional growth, climbing 79.8% year-over-year. The company opened 239 new hotels in the first half of 2025, bringing the total to 1,824, a 29.2% increase from the previous year.

Financial Highlights

• Revenue: RMB 2,469 million, up 37.4% year-over-year
• Hotel revenues: RMB 1,299 million, up 26.5% year-over-year
• Retail revenues: Up 79.8% year-over-year
• Adjusted net income: Increased 30.2% year-over-year
• Adjusted EBITDA: Up 37.7% year-over-year
• Adjusted net profit margin: 17.3%, a decrease of 0.9 percentage points

Market Reaction

Following the earnings announcement, Atour’s stock experienced a notable rise in premarket trading, climbing 5.98% to $37.2. This increase reflects investor confidence in the company’s growth trajectory and strategic initiatives. The stock’s movement positions it near its 52-week high of $37.46, with an impressive 115.55% return over the past year. InvestingPro data suggests the stock may still have room to grow, with analysts maintaining a Strong Buy consensus and 8 additional exclusive ProTips available to subscribers.

Outlook & Guidance

Atour projects a 30% increase in full-year net revenue, with expectations for the retail business to grow by 60% year-over-year. The company plans to open 500 new hotels in 2025, aiming to reach 2,000 premier hotels by year-end. Supporting these ambitious plans, the company maintains strong financials with a healthy current ratio of 2.29 and trades at a P/E ratio of 26.32. However, it anticipates an increased effective tax rate of 30%. Discover more detailed financial metrics and access comprehensive Pro Research Reports for Atour and 1,400+ other stocks with InvestingPro.

Executive Commentary

CEO Wang Haijun emphasized the company’s resilience in a competitive market, stating, "We believe the industry will continue to face challenges as market supply increases." He added, "Our sustained popularity is rooted in our deep understanding of user needs."

Risks and Challenges

• Increased market competition in the hotel and retail segments could pressure margins.
• Volatility in China’s travel market may impact future performance.
• An anticipated rise in the effective tax rate to 30% could affect profitability.
• Supply chain optimization remains a focus to support retail business growth.
• Structural changes in revenue composition may present challenges.

Q&A

During the earnings call, analysts inquired about the expected recovery of RevPAR in Q3, with management expressing optimism for improvement. Questions also focused on the company’s quality control measures in hotel signings and supply chain strategies in the retail sector.

Full transcript - Atour Lifestyle Holdings Ltd ADR (ATAT) Q2 2025:

Conference Operator: Hello, ladies and gentlemen. Thank you for standing by, and welcome to Ator Lifestyle Holdings Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a Q and A session. Today’s conference is being recorded.

I would now like to turn the conference over to Mr. Luke Hu, Senior IR Manager. Please go ahead, sir.

Luke Hu, Senior IR Manager, Ator Lifestyle Holdings: Thank you, operator. Good morning, and good evening, everyone. Welcome to our second quarter twenty twenty five earnings conference call. Today, we will hear from our Founder, Chairman and CEO, Mr. Wang Haijun and our EVP, Co CFO, Mr.

Wu Jianfe. Before we continue, please be aware that today’s discussion will include forward looking statements under federal securities laws. These statements are subject to various risks and uncertainties, and actual results may differ significantly from what states or implied in our comments today. The company is not obligated to update any forward looking statements except as required by applicable laws. Additionally, during this call, our management will discuss certain non GAAP financial measures solely for comparison purposes.

For a clear understanding of these measures and a reconciliation of GAAP to non GAAP financial results, please refer to the earnings release issued earlier today. Furthermore, a webcast replay of this conference call will be accessible on our website at ir.yaduo.com, where a copy of the results presentation is also available. Now I will turn the call over to Mr. Wang, our CEO.

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank you, Luke. Hello, everyone, and thank you for joining Atur’s second quarter twenty twenty five earnings call today. In the first half of the year, China’s travel market went through a period of volatility and adjustment. While overall demand steadily recovered, the industry still faced numerous challenges amidst this high growth cycle. Against this backdrop, we believe that a true industry leader must not only validate its business model through scale, but also build a strong brand moat grounded in customer reputation.

Therefore, Atul will stay true to our founding aspiration. We focus on customers placing their needs at the forefront and adhering to our business philosophy of serving people. We continue to drive product innovation and iteration across both our hotel and retail businesses, leveraging differentiated experiential strength to build defensible competitive advantages. This allows us to stay resilient through industry cycles and pursue sustainable long term growth. Now I would like to provide more details on our business performance for the 2025.

Let’s begin with our hotel business. Please turn to Slide four of our second quarter twenty twenty five results presentation. Our RevPAR was RMB343 in the second quarter, representing 95.7% of its level in the same period of 2024. Specifically, OCC reached 97.4% and ADR stood at 98.2% of their levels in the same period in 2024. Please turn to Slide five.

In the second quarter, RevPAR for our mature hotels in operation for more than eighteen months was 94.4% of the level in the same period of 2024, while OCC and ADR stood at 96.597.8% of twenty twenty four’s levels for the same period, respectively. Please turn to Slide six. In the process of expanding our scale, we have always adhered to a long term growth principle with hotel quality as our top priority. This ensures each new hotel carries forward our brand DNA and delivers consistent experiences, thereby supporting sustainable growth through quality. In the second quarter, we maintained a steady pace of expansion with 118 hotels opened.

By the end of the second quarter, we had a total of eighteen twenty four hotels in operation, representing a 29.2% year over year increase. Meanwhile, leveraging our solid brand momentum and continuously enhanced product strength, we have been gradually building differentiated competitive edges with multiple brands and the product lines that precisely targets various market segments. We offer franchisees a rich and a diverse range of investment options. By the end of the second quarter, the number of hotels under development reached eight sixteen. The growth of high quality pipeline projects is viewing strong momentum toward our strategic goal of 2,000 premier hotels.

Next, I would like to share the latest developments for Atour Hotel brands. Please turn to Slide seven. In the upper midscale market, the parallel development of ATORE Series III and Series IV enables us to gain deeper insights into demand across segmented scenarios, driving our further penetration in the upper midscale segment. Among them, Atour Series three consolidates our core brand position in mainstream business travel scenarios. The latest Atour 3.6 version is built on the product philosophy of timeless and humane and focuses on customer needs for both functional space and ambience, further enhancing the convenience and comfort of the stay experience.

The first batch of Atour 3.6 hotels have gradually opened and received strong market recognition for their outstanding product strength, which is driving robust signing momentum. Please turn to Slide eight. As a next generation benchmark product for the upper mid scale market, ATOUR Series four focuses on prime locations in higher tier cities, precisely catering to the blended needs of business trips and urban vacations. On June 28, we celebrated the one year anniversary of our first Atour four point zero hotel. By seamlessly integrating spatial aesthetics with local culture, it has established a mode of differentiated experiences, marking a critical transition from product innovation to quality validation.

To date, more than 30 Atour four point zero hotels have opened with over 60 hotels under development in our pipeline. Please turn to Slide nine. Today, increasingly prioritize experiential consumption that fulfills their inner needs. However, traditional upscale hotels have struggled to keep pace as their facilities and service offerings exhibit a significant mismatch of evolving guest expectations. The introduction of Sahe Hotel represents a successful effort to redefine the standards of upscale hotel experiences.

Guided by the brand ethos of oriental serenity, Sahe creates deeply immersive experiences across sleep, healing and wellness, revolutionizing the traditional hotels approach to guest care. On May 28, our first Sahe flagship hotel officially opened in Shenzhen and has received widespread acclaim for its distinctive oriental lifestyle experience. As a newly developed upscale brand, Sahe Hotel addresses present needs while anticipating emerging consumption trends. Looking ahead, Sahe will focus on rigorous site selection in core business districts of first tier and the new first tier cities, while continuously optimizing its product model based on customer feedback and operating performance. We expect each thoughtfully crafted Zahe hotel to become a lifestyle landmark in every city it enters, demonstrating to both customers and franchisees an innovative model in China’s new generation of upscale hotels.

Please turn to Slide 10. Ator Lite 3.3 as an extension and upgrade of Ator Lite three point zero has comprehensively improved its design style, functional modules and operational model to precisely cater to the needs of young business travelers and franchisees, further enhancing our product competitiveness in the mid scale hotel segment. From an operational standpoint, we continued to improve efficiency and enhance the customer experience. These efforts have produced a strong operating performance in the brand metrics and flagship hotels in key cities, while offering franchisees a sustainable return on investment. We believe the current market environment presents a great opportunity for Atour Light’s growth.

As a strategic priority for the group, we will continue to allocate core resources to it. In terms of scale, we are taking a long term quality first approach, making steady progress through a rigorous selection process. In brand building, we maintain a youth focused positioning and continue to strengthen its presence and influence, further widening our differentiated advantage in the midscale hotel segment. Moving now to our retail business. Please turn to Slide 11.

Atura Retail’s differentiated advantages stem from a profound understanding of customer needs and steadfast commitment to our natural deep sleep concept. Rather than accelerating product launches, we prioritize excellence in addressing core customer needs and carefully capturing the experiential nuances of different scenarios. Through meticulous refinement, we translate these insights into implementable product functionality, gradually enhancing core competitiveness in a way that cannot be replicated. Fueled by ongoing strong sales of new products and the momentum from promotional campaigns, our retail business maintained robust growth this quarter with GMV rising 84.6% year over year to RMB1144 million. Online channels continued to account for over 90% of total GMV.

Our retail GMV set a new sales record during the June 18 shopping festival reaching RMB578 million, up more than 86% from the same period last year. During this promotional campaign, AtourPlanet ranked the first in terms of sales in the betting category for the first time on major third party platforms. This breakthrough signifies that AtourPlanet’s deep sleep solutions brand positioning has further consolidated consumer mindshare. Please turn to Slide 12. In the Pillow category, AtourPlanet has maintained its leading position on major third party platforms this quarter, further cementing our leadership position.

Based on customer feedback and after several rounds of fine tuning in material selection, support structure adjustments and real sleep tests, we officially launched an upgraded version of the Deep Sleep Memory Foam Pillow Series this month. The Deep Sleep Memory Foam Pillow Pro three point zero, this product delivers multiple breakthrough upgrades, including an innovative curve fitting design and a partition support structure that better cradles the head and naturally fits the curvature of the neck and shoulders. The accompanying pillowcase uses a new weaving technique, which enhances breathability and moisture wicking while keeping the pillow surface at a stable temperature. Please turn to Slide 13. Meanwhile, after multiple quarters of dedicated research and functional refinement, the momentum of our comforter category has gradually gained market recognition for its product strength.

The Deep Sleep Thermal Regulating Comforter Pro two point zero summer season continued its strong sales momentum during the second quarter, driving significant growth in category sales. Atour Planet has also surged to the top of the comfort of category rankings on Douyin platform in May. Please turn to Slide 14. This quarter, to address common daily use pain points, we also launched a new product category, the Deep Sleep Fitted Sheet, Our Tour Planet’s continuously expanding Deep Sleep product portfolio comprehensively covers the diverse needs of customer home sleep microenvironment and demonstrates our capabilities to provide systematic solutions in the sleep segment. Looking ahead to the second half, we will further deepen our presence in the sleep markets by driving more product iterations and category innovations based upon our customer needs.

We will enhance our R and D capabilities, strictly adhere to production standards and optimize supply chain management to advance the upgrading of industry craftsmanship and quality standards. We will remain at the forefront of innovations in consumers’ sleep experience and drive high quality growth in the retail business. Please turn to Slide 15. Last but not least, I would like to share the progress across our membership business and channel development. With the ongoing refinement of the A Card membership system and the steady expansion of member benefits, our registered individual members surpassed 102,000,000 by the end of the second quarter, representing a 34.7% year over year increase.

This marks a new phase for our membership program. In terms of channel development, our CRS channel remained at a healthy level, accounting for 61.5% of total room nights sold in the second quarter. The contribution of room nights sold to corporate members was 20%. Please turn to Slide 16. We believe the core value of our membership business is not on traffic operations, but on building an emotional connection with our customers.

Refocusing on customers and responding to their genuine needs is the core value of the continuous evolution of the a CARD system. In June, we launched the new Gold Member Growth System to improve Gold Member perception and satisfaction with membership benefits. This system adopts a tier based benefits release mechanism and extends certain platinum member benefits to them, better aligning with the pace of members’ progression and their usage needs, while allowing more high frequency active customers to enjoy premium benefits earlier. Looking ahead to the second half of the year, we remain committed to our Chinese experience strategy and will continuously strengthen our fundamental capabilities and reinforce execution standards. Amid a complex and a volatile external environment, we will uphold our core values of humanistic care and a customer focus.

Through refined service and high quality products, we aim to set the benchmark for experiences in the industry and as always deliver our warmth and attentiveness to every customer. I will now turn the call over to our Co CFO, Mr. Wu Jianfeng, who will discuss our financial results. Thank you, Haijun. Now I would like

Wu Jianfeng, Co-CFO, Ator Lifestyle Holdings: to present the company’s financial performance for the 2025. Please turn to Slide 18 of the result presentation. Our net revenues for the 2025 grew by 37.4% year over year and 29.5% quarter over quarter to 2,469 million. Revenues from our monetized hotels for the 2025 were RMB $1,299,000,000, up 26.5% year over year and 25.9% quarter over quarter. The year over year increase was primarily fueled by our ongoing hotel network expansion.

The total number of our monetized hotels increased from thirteen eighty two as of 06/30/2024 to 1,800 as of 06/30/2025. The quarter over quarter increase was mainly due to an increase in RevPAR. RevPAR for our managed hotels was RMB340 for the 2025 compared with RMB302 for the previous quarter. Revenues contributed by our leased hotels for the 2025 were 150,000,000, a decrease of 17% year over year and an increase of 16.4% quarter over quarter. The year over year decline was primarily due to a decrease in the number of leased hotels as a result of our product mix optimization.

The quarter over quarter increase was mainly due to an increase in RevPAR. RevPAR for our leased hotels was RMB513 for the 2025 compared with RMB453 for the previous quarter. Revenues from our retail business for the 2025 were million, up 79.8% year over year and 39.1% quarter over quarter. These increases were driven by growing recognition of our retail brands and effective product innovation and development as we successfully broadened our range of product offerings. Now let’s move to cost and expenses.

Please turn to Slide 19. Hotel operating cost for the 2025 increased by 15.1% year over year and 21.3% quarter over quarter to $893,000,000. These increases were primarily due to the increases in variable costs, such as supply chain costs and hotel manager costs associated with our ongoing hotel network expansion. Gross margin of our hotel businesses extended to 38.3% in the 2025 from 35.7% during the same period of 2024, primarily attributable to a lower proportion of these hotels as a result of our product mix optimization. Retail cost for the 2025 rose by 70% year over year and 33.5% quarter over quarter to April.

These increases were associated with the rapid growth of our retail business. Gross margin of our retail business expanded to 53.3% in the 2025 from 50.6% during the same period of 2024, primarily attributable to the increasing contribution from higher margin products. Now please turn to Slide 20. Selling and marketing expenses for the 2025 were million compared with million for the same period of 2024. Selling and marketing expenses accounted for 15.9 of net revenues for the 2025 compared with 12.5% for the same period of 2024.

The increase was mainly due to the investment in brand recognition and effective development of online channels, in line with the growth of our retail business. General and administrative expenses for the same period for the 2025 were RMB90 million, including RMB2 million share based compensation expenses compared with RMB 91,000,000 for the same period of 2024, which included RMB 15,000,000 in share based compensation expenses. General and administrative expenses, excluding share based compensation expenses, accounted for 3.6% of net revenues for the 2025 compared with 4.2% for the same period of 2024. Decrease was primarily due to improved management efficiency and economics of scale. Technology and development expenses for the 2025 were million compared with million for the same period of 2024.

Technology and development expenses accounted for 1.7% of net revenues for the 2025 compared with 1.8% for the same period of 2024. Now please turn to Slide 21. Adjusted net income for the 2025 was million, representing a 30.2% increase year over year. Adjusted EBITDA for the second quarter of twenty twenty five was million, up by 37.7% year over year. And adjusted net profit margin for the 2025 was 17.3%, representing a decrease of 0.9 percentage points year over year.

The decrease was due to a rise in the overall effective tax rate resulting from withholding tax. Adjusted EBITDA margin for the 2025 was 24.7%, remaining stable compared to the same period of 2024. Now please turn to Slide 22. We also maintained a healthy cash position. As of June 2025, our cash and cash equivalents totaled million with net cash of RMB2649 million.

Please turn to Slide 23. For full year 2025, given ongoing network expansion and rapid growth of our retail business, we currently expect total net revenues to increase by 30% compared with full year 2024. That concludes our financial highlights for the 2025. Now let’s open for Q and A.

Conference Operator: Thank you. We will now begin the question and answer session. You. Our first question comes from the line of Lydia Lin from Citi. Please go ahead.

Lydia Lin, Analyst, Citi: Thanks management. And so congratulations on the solid results in the second quarter. And so I want to ask some questions on the RevPAR trend. So could you share the latest RevPAR trend performance in third quarter to date and especially during the summer holidays? And what’s your latest view on the full year RevPAR trend?

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank you, Lydia. Well, entering the summer season, the market continues to exhibit some characteristics such as the rotating travel hotspots or the divergent regional performances. So overall demand has not yet recovered to the same period last year. However, we do have observed that the summer leisure travel still demonstrated some resilience. Therefore, we expect that the RevPAR pressure in Q3 will somewhat ease compared to that of Q2, while further narrowing the declining in year on year RevPAR recovery.

Nonetheless, full year recovery full year RevPAR recovery rate is also showing a gradual improving trend. Looking ahead, we believe the industry will continue to face challenges as market supply increases overall. However, Atul will consistently leverage our differentiated experiential advantages by refocusing on users, while continuously strengthening our product excellence and brand premium capabilities. In terms of revenue management, we shall maintain a more balanced strategy between OCC and ADR to enhance overall profitability. We are confident that this approach is the key to navigating market cycles and it will serve as a touchstone for our brand’s resilience.

Thank you.

Luke Hu, Senior IR Manager, Ator Lifestyle Holdings: Thank you, Lydia. Next question please.

Conference Operator: One moment for the next question. The next question comes from the line of Chen Xing from UBS. Please go ahead.

Chen Xing, Analyst, UBS: Let me translate to English. May I have the management to share whether there are any changes to to to 25 guidance hotel openings and closure? Additionally, what is the recent trend in franchise signings with the increasing competition in the market, will this impact the company’s future development plans?

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank you, Chen Xing. Let me try to answer your question and allow me to share Atur’s long term development plans from multiple perspectives, including store openings, closures and signings. Firstly, regard to new openings. In the first half of this year, we opened a total of two thirty nine new hotels. By the end of the second quarter, pipeline hotel numbers reached eight sixteen.

Based upon this, we are fully confident in achieving our full year guidance of 500 new hotel openings and finally reaching the scale target of 2,000 premier hotels by the end of this year. Secondly, on closures. As for our hotels in operation, we would conduct ongoing evaluations from operational to experiential perspectives and terminate partnerships with those that do not meet our experience consistency consistency standards. So in the first half of the year, we closed 34 hotels and we expect the full year number of closures to be in between 70 to 80. And moving forward, we will maintain a certain active replacement rate to ensure every operating hotel is a differentiated high quality property.

Thirdly, the next point on our future approach to signings. Firstly, we will position precisely in terms of location leveraging the network management advantages outlined in our site selection tool. Secondly, despite the current market environment with turbulences going on, we shall continue with the high standards on signings to ensure our high quality growth in scale. These strategies will allow us to not only offer better products and experiences, but also create a win win sustainable growth for our brand and the franchisees. Last but not least, well, in fact, when we look back at the development history of China’s chain hotel industry, most of players have inevitably followed a path of prioritizing scale first.

But the industry would sooner or later eventually shift from competition on scale towards competition on quality. Meanwhile, we add a tour consistently kept to our strategic focus of quality premier hotels throughout the whole time. In the future, we will continue to enforce strict quality control throughout the entire life cycle of hotels from signing and opening to operations and build a brand moat with our high standards and consistently practicing and promoting our development philosophy of long termism. Thank you.

Luke Hu, Senior IR Manager, Ator Lifestyle Holdings: Thank you, Sheng Zhin. Next question please.

Conference Operator: The next question comes from the line of Sujie Lin from CICC. Please go ahead.

Sujie Lin, Analyst, CICC: So thank you management. Congrats for another strong quarter. So my question is on the retail business, because we noticed that Atur’s retail business continued its outstanding performance during Q2, which spans across the six eighteen online shopping festival period. And that you have raised full year revenue guidance. So could you share with us what’s the full year revenue guidance for the retail business?

And additionally, could you please discuss more about the future development of the retail business, maybe including the rollout pace of new sleep products? And is there any bottlenecks or challenges among development? Thank you.

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank you, Sujie. Let me answer your question regarding revenue guidance. In the second quarter, our tours retail business achieved outstanding performance. And looking at the full year, we will continue to launch new products as planned and further refine our product metrics. This month, we launched the Deep Sleep Memory Foam Pillow Pro three point zero and the Deep Sleep Thermal Regulating Comforter Pro two point zero all season.

Both have received very positive market feedback. Upgraded versions of the Deep Sleep Thermal Regulating Comforter series will also be rolled out in the near future to further enrich our Deep Sleep product line. Considering that positive development momentum of the retail business, we are confident in achieving our full year targets and have therefore raised our full year guidance of retail business growth to 60% year over year. Now let me discuss the future plans for the retail business of ours. Through long term exploration, we have already recognized that the sustained popularity of our AturPlanet sleep products is rooted in our deep understanding of user needs and the successful implementation of an experience driven business model.

However, we do see intensifying competitions going on with new entrants and imitators joining the fray. As a relatively new player, we see ourselves coming into this industry. We need to stay focused, solidify our fundamental capabilities in two folds. On one hand, we shall continuously optimize our supply chain as a strong foundation for our long term development. While on the other hand, we will strengthen R and D innovation and quality control to drive the overall improvement of industry standards with higher benchmarks.

This is precisely a continuation and practice of the long term philosophy of high quality growth that our hotel business upholds. Thank you.

Luke Hu, Senior IR Manager, Ator Lifestyle Holdings: Thank you, Su Jian. Next question please.

Conference Operator: Thank you. Next question comes from Dan Chi of Morgan Stanley. Please go ahead.

Dan Chi, Analyst, Morgan Stanley: We observed the growth rate of the retail segment business. Revenue is a lot faster than the hotel segment. So there has been some structural change on the growth rate of the company’s revenue outlook. The tax rate was also high this quarter similar to first quarter. So I would like to understand the company’s latest view on the full year adjusted net income margin And can it still stay stable at 18% like last year as previously guided?

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank you, Dan. In 2024, our group’s adjusted net profit margin was approximately 18%. This year due to the rapid growth of our retail business, our revenue structure shifted And in the first half of the year, retail revenue accounted for around 38% of the total, up from around 29% in last year. And the contribution from retail revenue continues to increase. It is exerting a structural impact on our overall net profit margin, but as we have maintained a relatively stable pretax profit margin through improved management efficiency.

Meanwhile, as we have officially launched a comprehensive shareholder return program combining dividend and the share repurchases this year of which the funding source comes from our net income profit distribution of our domestic subsidiaries. Accordingly, the associated withholding tax will increase our overall effective tax rate this year. The adjusted comprehensive tax rate is expected to rise to 30% this year compared to last year’s 25. That will to some extent affect our full year net profit margin. So as a result, we anticipate our year on year decline in full year net profit margin.

Luke Hu, Senior IR Manager, Ator Lifestyle Holdings: Thank you. Thank you, Dan. Next question please.

Conference Operator: One moment for the next question. Our next question comes from the line of Simon Cheng of Goldman Sachs. Please go ahead.

Simon Cheng, Analyst, Goldman Sachs: So let me translate that into English. So regarding the hotel brands, I have questions on the two hotel brand that they have, maybe, more strategic focus or newly launched recently. One is Saha, whereby they launched Ascendiant new hotel and their market reception have been excellent. Wondering whether they have any targets in terms of the number of hotel as well as the district or regions where they’re to be focusing on? Secondly, also on our tour like, I think the number of hotel count almost reaching 180 for this quarter.

Wondering there’s any update on the feedback and specifically, the version 3.3 has been quite well received. So wondering if there’s going to be any feedback that management can share. Thank you.

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank Simon. First, regarding the question of Sahoo. Well, since its opening, Sake has been highly praised by our users because of the design style and service quality and the particularly standout operational performance. The flagship store of Sakhhe Hotel in Shenzhen achieved a comprehensive RevPAR exceeding RMB800 in its first full month operation that started from May 28. Currently, several high quality projects in key cities such as Guangzhou, Shanghai, Shenzhen are poised to open successively.

For Sakhhe, we will adhere to quality first approach, because we need to control the scale of expansion while deepening the brand’s presence and aiming to set a benchmark in experience and supporting its growth with a long termism mindset. I’ll talk about Light. In second quarter, overall operational performance of Tour Light three point zero was outstanding with the RevPAR recovery rate outperforming our group’s average, demonstrating a strong product potential and very efficient location of the Atur Light brand. Atour Light 3.3 version upgraded from the basis of Atour Light three point zero has also been highly favored by franchisees since its launch and picked up a very strong signing momentum. Our first Tour Light three point three hotel has opened in last week and the first batch of more locations will open soon.

And looking forward, we do believe in Tour Light to be a strategic priority for our group and we’ll continue to invest into this brand with our core resources, meticulously refine the product quality, enhance operational efficiency and also focus on core urban areas and key business districts. With a long term vision and a steady deliberate efforts, we aim to lay a solid foundation for achieving a goal of 1,000 tour light hotels. Thank you.

Luke Hu, Senior IR Manager, Ator Lifestyle Holdings: Thank you, Simon. Next question please.

Conference Operator: There are no further questions at this time. That concludes today’s question and answer session. I’d like to turn the call back to Mr. Luke for any additional or closing remarks.

Luke Hu, Senior IR Manager, Ator Lifestyle Holdings: Thank you for joining us today. If you have any further questions, please feel free to contact our IR team, and we look forward to speaking with you again next quarter. Thank you, and goodbye.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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