Earnings call transcript: Atour Lifestyle Q1 2025 sees strong revenue growth

Atour Lifestyle Holdings Ltd ADR, a prominent player in the Chinese hospitality market, reported robust financial results for the first quarter of 2025, showcasing significant revenue growth and strategic expansion in its hotel and retail segments. Despite challenges in the domestic travel market, the company’s stock showed a modest increase, reflecting investor confidence in its strategic direction. According to InvestingPro data, Atour’s stock has delivered an impressive 99.88% return over the past year, with the company maintaining a "GREAT" financial health score of 3.59 out of 5.

Key Takeaways

• Atour Lifestyle reported a 29.8% year-over-year increase in net revenues for Q1 2025.
• The company expanded its hotel network significantly, opening 121 new hotels.
• Retail revenues surged by 66.5% year-over-year.
• Atour announced a US$0.14 per share dividend and a US$400 million share repurchase program.

Company Performance

During the first quarter of 2025, Atour Lifestyle Holdings demonstrated strong performance with a 29.8% increase in net revenues compared to the same period last year. The company expanded its total hotel network to 1,727 hotels, marking a 32.6% year-over-year increase. This growth underscores Atour’s leading position in the Chinese hospitality market, driven by strategic expansion and innovative product offerings. InvestingPro analysis shows the company’s impressive 43.38% revenue growth over the last twelve months, with a healthy PEG ratio of 0.95, suggesting reasonable valuation relative to growth. For deeper insights into Atour’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

• Revenue: RMB 1,910 million, up 29.8% year-over-year
• Hotel revenues: RMB 1,032 million, up 23.5% year-over-year
• Retail revenues: Increased by 66.5% year-over-year
• Adjusted net income: RMB 345 million, up 32.3% year-over-year
• Adjusted net profit margin: 18.1%, an increase of 0.3 percentage points

Outlook & Guidance

Looking forward, Atour Lifestyle has set a full-year net revenue growth guidance of 25-30%, with retail revenue growth guidance raised to 50%. The company aims to reach 2,000 premier hotels by the end of the year, focusing on quality expansion and enhancing customer experience. InvestingPro identifies several strengths, including strong cash flow coverage of interest payments and liquid assets exceeding short-term obligations, with a current ratio of 2.29. Subscribers can access 8 additional ProTips and detailed financial metrics to better understand Atour’s growth trajectory.

Executive Commentary

CEO Wang Haijun emphasized the company’s commitment to long-term value creation, stating, "We remain committed to creating long-term value and rewarding our shareholders’ trust and support through concrete actions." He also highlighted the resilience of leisure travel and the company’s strategic focus on differentiated experiences in a competitive market.

Risks and Challenges

• Market volatility in China’s domestic travel sector could impact future performance.
• Uncertainty in business travel recovery may pose challenges.
• The competitive landscape requires continuous innovation and differentiation.

Q&A

During the earnings call, analysts raised questions about the challenges of RevPAR (revenue per available room) in Q1, with company executives expressing optimism for potential easing in Q2. Analysts also inquired about the strong performance of Atour’s retail business and the company’s confidence in new hotel signings despite market uncertainties.

Atour Lifestyle’s strategic initiatives and strong financial performance in Q1 2025 reflect its adaptability and leadership in the hospitality industry, positioning it well for future growth amidst market challenges.

Full transcript - Atour Lifestyle Holdings Ltd ADR (ATAT) Q1 2025:

Conference Operator: Hello, ladies and gentlemen. Thank you for standing by, and welcome to the Ator Lifestyle Holdings First 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 question and answer session. Today’s conference is being recorded.

I would now like to turn the call 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 first quarter twenty twenty five earnings conference call. Today, you will hear from our Founder, Chairman and CEO, Mr. Wang Haijun and our EVP, Co CFO, Mr.

Wu Jianfeng. 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 is stated 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 purpose.

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 Atuo’s first quarter twenty twenty five earnings call today. In the first quarter of twenty twenty five, China’s domestic travel market experienced fluctuations amid a complex and volatile macro environment with numerous uncertainties presenting both challenges and opportunities. As a leading lifestyle group, we have always adhered to our business philosophy of serving people and are confidently navigating these evolving market dynamics. We continue to respond proactively to shifting consumer preferences for superior quality, personalized service and experience driven consumption.

Meanwhile, we remain firmly committed to advancing the strategic initiative of Chinese Experience 2,000 premier hotels, which not only strengthens our brand awareness and product offerings, but also drives the transformation and elevation of the industry’s value chain. Next, I would like to provide more details on our business performance for the first quarter of twenty twenty five. Let’s begin with our hotel business. Please turn to Slide four of our 1Q twenty twenty five results presentation. Our RevPAR reached RMB304.4 in the first quarter of twenty twenty five, representing 92.8% of its level in the same period of twenty twenty four.

Specifically, OCC reached 95.8% and ADR stood at 97.2%, both compared to the same period in 2024. Please turn to Slide five. RevPAR for our mature hotels in operation for more than eighteen months in the first quarter of twenty twenty five was 92.8% of the level for the same period in 2024, in line with the group’s overall performance, while OCC and ADR for these mature hotels reached 95.697.4% of twenty twenty four’s levels for the same period, respectively. Please turn to Slide six. Benefiting from our strengthening brand influence and a robust organizational efficiency, our hotel network continued to expand, demonstrating the resilience of our business.

In the first quarter, we opened 121 new hotels, representing a 24.7% year over year increase. By the end of the first quarter, we had a total of seventeen twenty seven hotels in operation, representing a 32.6% year over year increase. This quarter, franchisees remain positive about our brand development. This has led to a continuous expansion of our pipeline projects. By the end of the first quarter, the number of hotels under development reached seven fifty five.

While pursuing scale expansion, we always adhere to the quality standards. We carefully screen and evaluate both new hotel signings and openings to ensure sustainable high quality growth. Next, I would like to share the latest developments for Atul’s hotel brands. In the first quarter, guided by our long term growth philosophy and deep insights into current business travel trends, we implemented upgrades to our midscale and upper midscale hotel products. Please turn to Slide seven.

In the upper mid scale segment, we launched a Tour 3.6 in the first quarter. This product embodies an in harmony with nature design philosophy, seamlessly integrating business functionality and a relaxed ambiance. Furthermore, Atur three point six prioritizes enhanced convenience and comfort through optimized space utilization and upgraded functional design. This innovation enables us to deliver a comprehensive full scenario ultimate business travel experience, setting a new benchmark for premium business travel in the upper mid scale market. Since its launch, Atura 3.6 has received widespread market recognition and a positive feedback from franchisees through its strong product vitality, holistically upgraded our customer experience features and efficient investment returns.

We believe this product will further solidify our core competitiveness in the upper mid scale segment. Please turn to Slide eight. Looking ahead, the Atour Series three and the Series four product lines will jointly shape our next generation upper mid scale hotel portfolio, operating in parallel to complement each other. Atour Series three strengthens our leading brand position in core business travel scenarios. Meanwhile, Atour Series four offers an extended life cycle and shapes the future of the upper midscale market.

Together, Series three and Series four product lines address diverse customer aesthetic preferences and accommodation needs, while also providing franchisees with a broader range of investment options. In addition, for existing hotels with renovation needs, we have introduced the Atour 3.5SE renovation program to help them maintain market competitiveness. Please turn to Slide nine. In the midscale segment, we remain committed to product innovation and experiential upgrades that cater to the diverse needs of younger consumers. In 2023, we introduced Ator Light three point zero, which effectively addressed the critical market challenges such as outdated aesthetics and inadequate service experiences by incorporating youthful, fashionable design and innovative service touch points.

This product has received widespread acclaim from both franchisees and consumers. Meanwhile, during the operation, we have gained valuable insights into the preferences of younger consumers. Building on this foundation, we launched Atour Light 3.3 in the first quarter. Inspired by the Blue Knights of Genoa, Atour Light 3.3 provides customers with a relaxing and restorative resting experience through immersive atmospheric design. Ator Light 3.3 features comprehensive upgrades in visual design, spatial perception and facilities, while offering tailored functionality for business meetings and work related needs.

These enhancements further elevate the overall customer experience. With its improved quality, expanded versatility and adhere to our Atour Signature Experience standards, we believe Atour Lite 3.3 will serve as a key driver in achieving our goal of 1,000 Atour Lite hotels and will establish itself as a flagship product in the mid scale segment. In an increasingly competitive market, we remain focused on creating products with extended life cycles. By continuously enhancing our product competitiveness with reinforced experience differentiations, we effectively meet the diverse needs of broader demographics, further solidifying our leadership across market segments. Now moving to our retail business.

Please turn to Slide 10. The growth of our retail business is a natural extension of our positioning as a lifestyle group and our business philosophy of serving people. In the first quarter, our retail business maintained strong growth momentum with GMV reaching RMB845 million, up 70.9% year over year, driven by rising brand strength and growing customer loyalty. Online channels continued to contribute over 90% of total GMV. Please turn to Slide 11.

Since its inception, has remained committed to studying and integrating customers’ sleep needs across both hotel and home environments. This anchors the deep sleep experience firmly in the minds of customers. Across different scenarios, AtourPlanet’s products not only fulfill customers’ functional needs, but also deeply resonate with their emotional needs. In the pillow category, our deep sleep memory foam Pillow Pro series maintained robust sales performance in the first quarter, consistently ranking as the top seller in its category on major third party e commerce platforms. Since its launch, the accumulated sales of the Deep Sleep Memory Foam Pillow Pro series have exceeded 6,000,000 units, further solidifying AturPlanet’s leading position in the pillow category.

Please turn to Slide 12. Based on our capture and exploration of user needs as well as the refinement and analysis of user feedback, AturPlanet has developed a standardized user driven product iteration model. In March, in line with seasonal changes, we launched the Deep Sleep Thermal Regulating Comforter Pro two point zero summer season. Serving as the upgraded version of the Deep Sleep lightweight comforter introduced last year, this new product further optimizes the breathable cooling system, aiming to provide the customers with a natural and cozy coolness instead of an ultimate cold touch. Upon launch, the product received widespread consumer praise, ranking first in sales in its category on Tmall and Douyin in its first month.

Within just forty eight days, the product exceeded RMB100 million, making it another blockbuster product in the Deep Sleep series. In addition, amidst an increasingly competitive market environment, we have been steadily reinforcing AtuaPlanet’s core strengths. On one hand, we continue to drive innovation in product materials and manufacturing technologies. On the other hand, by establishing a comprehensive set of production standards, we have achieved end to end quality control and ensured consistent and reliable product quality. Moreover, AturPlanet remains focused on refining product details based on customer needs, aiming to enhance the overall usage experience.

With the continuous improvement of both product performance and quality, Atour Planet is well positioned to meet consumers’ growing expectations for high quality living, redefining new standards for both product quality and customer experience. Please turn to Slide 13. Moving to our membership business and the channel development progress. Thanks to the continued enhancement of our membership ecosystem and an expanding range of membership benefits, our registered individual members surpassed 96,000,000 by the end of the first quarter, representing a 35.4 year over year increase. Our core CRS channel continued to maintain stable performance, accounting for 65.1% of total room nights sold during the first quarter.

The contribution of room nights sold to corporate members was 19.8% during the first quarter. Please turn to Slide 14. We continue to enhance our A Card membership ecosystem by gaining deeper insights into user behavior and preferences across different business formats. This enables us to further integrate hotel and retail businesses, thereby driving cross consumption between them. In the first quarter, alongside the launch of new retail products, we introduced the cross promotional campaigns that allow retail customers to access our hotel membership benefits.

These initiatives have attracted more retail customers to our hotels, driving further conversions across our business segments. In terms of member engagement, we actively leverage emerging trends in leisure and business travel to continuously deliver experiences and benefits that highly resonate with customers. For example, during the Spring Festival, we launched our CounterTrend Travel Blind Hotel Booking campaign, catering to the younger travelers’ growing preference for exploring niche crowd free destinations. We also introduced the destination ambassadors to share local travel inspiration. Additionally, we partnered with a vertical travel platform to establish integrated memberships, further embedding our value proposition throughout customers’ journey and enhancing member loyalty.

Finally, I am pleased to announce the recent release of our 2024 ESG report. Please turn to Slide 15. Throughout 2024, we continued to strengthen our ESG governance by embedding sustainability principles across both hotel and retail businesses. At the same time, we are actively fulfilling our social responsibilities through industrial support and social assistance programs in Jiaduo Village. And by leveraging our brand influence, we also built bridges for biodiversity conservation.

Looking ahead, we remain committed to upholding our product philosophy of being humane, warm and inspiring, scaling the expansion and driving quality enhancements to both our hotel and retail businesses. Guided by our long term growth principle, we remain committed to making tangible contributions to sustainable development and the betterment of society. I will now turn the call over to our Co CFO, Mr. Wu Jianfeng, who will discuss our financial results.

Wu Jianfeng, EVP, Co-CFO, Ator Lifestyle Holdings: Thank you, Haejun. Now I would like to present the company’s financial performance for the first quarter of twenty twenty five. Please turn to Slide 17 of the result presentation. Our net revenues for the first quarter of twenty twenty five grew by 29.8% year over year and fell by 8.6% quarter over quarter to million. Revenues from our monetized hotels for the first quarter of twenty twenty five were RMB $1,032,000,000, up by 23.5% year over year and down 6.7% quarter over quarter.

The year over year increase was primarily fueled by our ongoing hotel network expansion. Revenues contributed by our leased hotels for the first quarter of twenty twenty five were million, a decrease of 23.5% year over year and 21.6% quarter over quarter. The declines were primarily due to a decrease in the number of leased hotels as a result of our product mix optimization. Revenues from our retail business for the first quarter of twenty twenty five were million, up by 66.5% year over year and down 9.3% quarter over quarter. The year over year increase was driven by growing recognition of our retail brands and effective product innovation and development as we successfully broadened our range of product offering.

Now let’s move to cost and expenses. Please turn to Slide 18. Hotel operating costs for the first quarter of twenty twenty five increased by 11.2% year over year and decreased by 7.3% quarter over quarter to million. The year over year increase was primarily due to the increases in variable costs, such as hotel manager costs associated with our ongoing hotel network expansion. Gross margin of our hotel businesses expanded to 36.6% in the first quarter of twenty twenty five from 34.1% during the same period of 2024.

Retail costs for the first quarter of twenty twenty five rose by 63.7% year over year and decreased by 12.5% quarter over quarter to million. The year over year increase was associated with the rapid growth of our retail business. Gross margin of our retail business expanded to 51.4% in the first quarter of twenty twenty five from 50.5% during the same period of 2024, primarily attributable to the increasing contribution from higher margin products. Now please turn to Slide 19. Selling and marketing expenses accounted for 14.8% of net revenues for the first quarter of twenty twenty five compared with 11.9% for the same period of 2024.

The increase was mainly due to investment in brand recognition and the effective development of online channels, in line with the growth of our retail business. General and administrative expenses, excluding share based compensation expenses, accounted for 4.1% of net revenue for the first quarter of twenty twenty five compared with 5% for the same period of 2024. The decrease was primarily due to improvement improved management efficiency and economics of scale. Technology and development expenses accounted for 2.1% of net revenues for the first quarter of twenty twenty five compared with 1.6% for the same period of 2024. The increase was mainly due to increased investment in technology systems and infrastructure to support our expanding hotel network and retail business and improve the customer experience.

Now please turn to Slide 20. Adjusted net income for the first quarter of twenty twenty five was RMB345 million, representing a 32.3% increase year over year. Adjusted EBITDA for the first quarter of twenty twenty five was million, up by 33.8% year over year. Adjusted net profit margin for the first quarter of twenty twenty five was 18.1%, representing an increase of 0.3 percentage points year over year. Adjusted EBITDA margin for the first quarter of twenty twenty five was 24.9%, an increase of 0.8 percentage points year over year.

Please turn to Slide 21. We also maintained a healthy cash position As of 03/31/2025, our cash and cash equivalents totaled RMB 146,003,000 with net cash of RMB 74,003,000. Please turn to Slide 22. As part of our commitment to enhancing shareholder value, in accordance with the annual dividend policy adopted in August 2024, today, we declared our first cash dividend in 2025 of US0.14 dollars per ordinary share or US0.42 dollars per ADS. For an aggregate amount of approximately US58 million dollars Concurrently, we announced a three year share repurchase program, under which we may repurchase an aggregate value of up to US400 million dollars Through a comprehensive shareholder return initiative encompassing dividends and share repurchase, We are taking concrete actions to reward shareholders’ trust and support, enabling all shareholders to share in the company’s growth achievement.

Now please turn to Slide 23. For full year 2025, we currently expect total net revenue to increase by 25% to 30% compared with full year 2024. That concludes our financial highlights for the first quarter of twenty twenty five. Now let’s open for Q and A.

Conference Operator: Thank and wait for your name to be announced. To withdraw your question, please press 11 again. For the benefit of all participants on today’s call, if you raised your question in Chinese, please immediately repeat your question in English. Please limit your question to one at a time. If you wish to have more questions, please rejoin the queue.

Standby while we compile the Q and A roster. Our first question comes from C. G. Lin from CICC. Your line is now open.

So thank you, management. Could you please share the performance of RevPAR since Q2 and provide outlook on RevPAR for the full year? Thank you.

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank you, Suji. In Q1, the overall market experienced some volatility. There were multiple factors to be considered, including weather conditions, macroeconomic impacts, they’re all affecting travel demand. Our RevPAR decreased by 7.2% year over year and also OCC and ADR were showing varying degrees of decline year over year as well. Entering Q2, we observed the continued divergence in market demand.

While there were the recovery of business travel, but it remained quite uncertain to some extent, Leisure travel demand has demonstrated some notable resilience. During the Labor Day holiday, both pricing and occupancy performed quite strongly, exceeding prior year levels. So overall, we anticipate there might be some easing of RevPAR pressure in Q2 when compared to Q1. And as for our view on the full year RevPAR performance, it is still remaining consistent with the beginning of the year. And RevPAR still faces considerable uncertainty given the ongoing market volatility.

However, in terms of our operations, we will not just blindly engage in price competitions with the homogenized products in the market. What we will do is to continue to adhere to towards differentiated experience advantages to seize the core revenue opportunities and we are going to adopt a more balanced and refined revenue management strategy in terms of both ADR and OCC, so that we can continuously build the long term brand value of Atour. Thank you, Suji. Next question please.

Conference Operator: Thank you. Just a moment for our next question. Next, we have Roland Leone from Bank of America. Your line is now open.

Roland Leone, Analyst, Bank of America: Thank you. Let me translate my question into English. Good evening, management. Could you please share your view on the new signings momentum and also new hotel openings for the full year of 2025? Thank you.

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank you, Rona. Let me answer your question. In the first quarter, we remained positive finding momentum. Amid industry wide pressure from homogeneous supply, Atur, we solidified our unique market positioning through our differentiated brand strategy and a distinctive experiential strength. This has continuously drawn the attention of high quality franchisees.

In addition, against the backdrop of persistent macroeconomic uncertainty, we have clearly observed along the way that compared to other investment channels, the hotel industry offers still a relatively stable cash flow returns and a more robust business model. So despite some RevPAR volatility, the premium property rental costs still is remaining in a relatively low range with improved availability and that makes the overall returns attractive in the long term. As a result to that, mature hotel franchisees are still remaining confident and are willing to seize opportunities to capture that long term growth potential of premium brands in the future market. As for new openings, in the first quarter of this year, we opened 121 hotels continuing that high quality expansion trend since we had last year. Based upon that, we maintain our full year opening guidance of 500 new openings and have full confidence in achieving this goal, steadily advancing toward our strategic objective of reaching 2,000 premier hotels by the year end.

Also based on our strategic goal of 2,000 premier hotels, we will impose stricter requirements on quality from multiple dimensions, including signings, openings and operation to ensure that our hotel numbers grow with quality, so that every hotel can provide users with a consistently high quality experience. Thank you.

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

Conference Operator: Thank you. Just a moment. Next we have Dan Chi from Morgan Stanley. Your line is now open.

Roland Leone, Analyst, Bank of America: Please allow me to translate my question. My question is related to the company’s retail business. We saw retail business revenue growth in first quarter was outstanding at 67% year on year. Previously, the company guided full year Retail revenue of no less than 35% growth. I would like to ask the management about any update to the full year revenue guidance on this business and any strategic plan for retail in the coming period?

Thank you.

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank you, Dan. Thank you, Dan. In first quarter, we seized the key marketing opportunities of the Spring Festival. Also, we gained advantage from that continuous popularity of the Deep Sleep series products, our retail business achieved a year on year growth of over 70% in GMV. Meanwhile, we can see that the sales trend of the new products we launched in March, namely the Deep Sleep Thermal Regulating Comforter Pro two point zero summer season is also very strong.

Looking at the full year, though the market competition is still remaining intense. However, because of our continuous enhancement of our Tour Planet product offerings as well as the brand awareness, we are quite confident in the performance of our upcoming product launches, also the major promotional campaigns we have in our plans. Based upon this outlook, we are now raising our full year retail revenue growth forecast to 50% year over year. Meanwhile, despite there are still some RevPAR uncertainties, the strong performance of our retail business led us to increase our group’s full year revenue growth guidance to the range of in between 25% to 30% year over year. In the future, AtorPlanet will continue to focus on the deep sleep domain, enhance product R and D, improve our product quality, also consolidate our moat and supply chain to achieve higher quality and a sustainable development of both the products and our brand.

Thank you.

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

Conference Operator: Thank you. Our next question comes from Junwei Lu from

Luke Hu, Senior IR Manager, Ator Lifestyle Holdings: We noticed that you had just announced dividend and the share buyback program. Could you share some thoughts of the overall considerations behind these initiatives? Thanks management.

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank you, Thank you, Jiewei. Well, like we said before, we remain committed to creating long term value and rewarding our shareholders’ trust and support through concrete actions. So in addition to the dividend, we have also officially announced today a three year share repurchase program with a total amount not exceeding US400 million dollars Regarding the dividend, we will continue implementing the three year dividend plan established last year, under which the annual cumulative dividend payout will be no less than 50% of the net income in the previous fiscal year. That’s why this year, as we announced, our first dividend distribution totals approximately US58 million dollars representing about one third, 30 three percent of the prior fiscal year’s net income. And moving forward into the future, we will implement a comprehensive shareholder return program by combining dividend payout and share buyback together.

While ensuring the company’s stable and normal capital operations, we will actively consider various shareholder return method in line with actual business conditions to enhance shareholder yield and enable all shareholders to share in the company’s growth achievements. Thank you, Jiewei.

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

Conference Operator: Thank you. Our next question comes from Lydia Ling from Citi. Your line is now open. Hi, management. Could you provide an update on the progression of your upscale brands?

And also we noticed the launch of some new products across both upper midscale and also midscale brands. So could you elaborate more on the strategies for them? Thank you.

Wang Haijun, Founder, Chairman and CEO, Ator Lifestyle Holdings: Thank you, Lydia. In terms of our upscale brands, I’d like to talk about our new brand, Sahe Hotel. We consistently adhere to a quality first principle and our goal is to develop a batch of flagship projects. We are pleased to take this opportunity to announce that within this month, our Sakhhe flagship hotel at Binhhe of Shenzhen will officially commence operations on the May 28. So since the trial operations of two Sake hotel, which started this year, their product positioning, design, aesthetics and service experiences have received widespread acclaim from the consumers.

And we have the confidence that Sahe Hotel’s core concept of Chinese experience and its brand ethos of oriental serenity will establish new benchmarks in the upper scale hotel market in China. And in the upper midscale hotel segment, as I mentioned earlier, our Atour three and Atour four series will coexist and they will jointly shape our next generation upper midscale hotel portfolio, so that it not only reaches the choices of franchisees, but also meets the diverse accommodation needs of consumers. Also to further expand the market coverage so as to consolidating Ator’s leading position in the upper midscale market. And as for the mid scale hotel segment, as we announced earlier, we’re going to upgrade our Atour Lite three point zero to the Atour Lite 3.3 version And that has undergone comprehensive upgrades in multiple dimensions, including experience, product texture and business functions. And we are adopting more modular design applications in order to adapt to more diverse properties as well as enlarging the room areas.

We are going to continue to be committed to creating a higher premium and cost controllable investment model by offering those lasting profitability and excellent returns so that we can provide with the franchisees with more investment options.

Conference Operator: Thank you. This concludes today’s question and answer session. I’d like to turn the conference back over 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. We look forward to speaking with you next quarter. And thank you and goodbye.

Conference Operator: And that concludes the question and answer session. And thank you very much for joining our call today. You may now disconnect.

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