--- title: "HTHT (Trans): Continuing to pursue brand-led, high-quality growth---" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/39346162.md" description: "Below is Dolphin Research's Trans of HTHT's FY25 Q4 and full-year earnings call. For the earnings analysis, please refer to 'HTHT: After a reset and rebound, how long can the 'top student' status last?'" datetime: "2026-03-18T15:40:07.000Z" locales: - [en](https://longbridge.com/en/topics/39346162.md) - [zh-CN](https://longbridge.com/zh-CN/topics/39346162.md) - [zh-HK](https://longbridge.com/zh-HK/topics/39346162.md) author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/topics/39346162.md) | [繁體中文](https://longbridge.com/zh-HK/topics/39346162.md) # HTHT (Trans): Continuing to pursue brand-led, high-quality growth--- **Dolphin Research's transcript of Huazhu's FY25 Q4 and full-year earnings call is summarized below. For our earnings take, see** [**Huazhu: After a deep squat and jump, how long can the 'honor student' status last?**](https://longbridge.cn/en/topics/39345831?channel=SH000001&invite-code=7XHHT4&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=7d338bd9-8867-482b-9010-b9d75f87386c)**.**$HWORLD-S(01179.HK) $H World(HTHT.US) **I. Key takeaways** 1\. **Shareholder returns**: FY25 total returns were approx. $760mn (H2 cash dividend $400mn + interim dividend $250mn + buybacks ~ $110mn), exceeding 100% of adj. net profit. The $2bn three-year return plan is over 75% complete, and management reiterates its commitment to keep returning cash via dividends or buybacks. 2\. **Guidance**: 2026 group revenue +2% to +6% YoY (+5% to +9% ex-Legacy DH). Managed & franchised revenue +12% to +16% YoY; 2,200–2,300 openings and 600–700 closures (hotel network ~+12% YoY). Full-year RevPAR targeted at flat to slightly positive. 3\. **Key financial metrics**. 4. **Legacy-DH turnaround**: FY25 delivered record adj. EBITDA of ~RMB 500mn, a sharp YoY improvement; RevPAR +8.2% YoY. Profitability is expected to be sustained in 2026 and beyond. 4\. **CFO transition**: Chen Hui stepped down as CFO to become Chief Compliance Officer. Arthur Yu has assumed the CFO role. **II. Call details** **2.1 Management remarks** **1\. Industry view & strategic positioning** a. Travel in China is shifting from discretionary to more non-discretionary, with rail/air/tourism data showing steady growth in mobility. As transport networks improve, lodging demand is extending from major cities into county markets, making lower-tier cities a new growth engine for travel spend. b. The sector still faces a structural mismatch: excess low-quality, homogeneous supply and insufficient high-quality, value-for-money options. Supply-side upgrade will be the main theme, creating significant growth opportunities for leading chains like Huazhu. c. The focus remains on economy and midscale to serve mass demand, revitalizing underused assets through brand equity and supply-chain capabilities to improve city-level service efficiency. Expansion will continue into lower-tier cities and rural areas to fill gaps in quality lodging. **2\. Operating performance** a. Through granular RM, stronger sales and marketing, and ongoing product/service upgrades, ADR improved sequentially while occupancy stayed stable. Q4 RevPAR turned positive YoY for the first time since Q2 2024; FY25 ADR was broadly flat. b. In-operation room count +16.2% YoY, driving group hotel GMV of RMB 108.1bn (+16.4% YoY). Managed & franchised revenue reached RMB 11.7bn (+23.1% YoY), with managed & franchised GP at RMB 7.6bn (+20.8% YoY). c. H Rewards surpassed 245mn members (+21.5% YoY), with member room-night contribution still rising. The company is exploring content creator channels and boosting visibility to inbound travelers to widen funnels and improve member conversion. d. FY25 saw a record \>2,400 hotel openings. By end-2025, the share of new-generation formats within the three core limited-service brands (Hanting, Ji, Orange) further increased. **3\. Brand & product upgrades** a. Launch of the 'Hanting in' brand: positioning for a balance between cost efficiency and quality, introducing multi-bed and family rooms to serve family and group travel and fill gaps in the economy segment. It integrates smart services such as self check-in and self-service laundry to balance experience and efficiency; it also plays a purification role for the Hanting brand by offering franchisees of aging Hanting hotels a light-touch, fast-renovation, low-cost option with more certainty of returns. b. Multi-brand mid-to-upscale strategy: focused on Tier-1/2 cities with four differentiated brands—Manxin (oriental aesthetics), Ji (next-gen product upgrade underway), Orange Crystal, and Mercure (French style). Grand Ji will officially open on Apr 1. The goal is to become a leading player in mid-to-upscale by 2030. **4\. Legacy-DH business** a. FY25 achieved a turnaround with record adj. EBITDA of ~RMB 500mn. RevPAR rose 8.2% YoY, and same-hotel revenue was stabilized despite a challenging market. b. Transformation measures: category-specific RM adjustments and property-level sales improvements; following HQ restructuring and admin cost cuts completed in late 2024–early 2025, ongoing optimization in headcount, external services, and the supply chain continues. Lease terms are being renegotiated, loss-making properties exited, and the leased portfolio shifted toward an asset-light mix. c. 2026 priorities: keep lifting commercial and operating efficiency across brands (top priority). Deepen synergies with Huazhu in supply chain, design/construction, technology, and loyalty; build the next-gen Intercity brand with better guest-friendliness and efficiency as a platform for overseas expansion. Europe remains the core international market, with exploration in MENA where a base already exists. **5\. 2026 outlook** a. Pursue brand-led, high-quality growth, strengthen sales and marketing, and embrace tech innovation to enable hotel operations with an open mindset. b. Keep improving guest experience and enhancing franchisee efficiency and ROI, and advance steadily toward the '2,000 cities, 20,000 hotels' strategic target. **2.2 Q&A** **Q: What changes should we expect in financial and growth strategy with new CFO Arthur Yu?** A: First, we thank Chen Hui for his contributions over the past 20 years. At Huazhu's 20th anniversary Investor Day last year, we reviewed our achievements and looked ahead—our vision is to build a world-class, global company and be a leading hotel group in China and globally. As we scale, we need world-class professional management, adding diverse and international capabilities to the team. We welcome Arthur and believe his deep finance expertise will help lead Huazhu into its next phase with the team. **Q: What RevPAR is implied in the 2026 revenue guide, and how do you view supply-demand?** A: Over the past three months, trends in China's hotel industry have been recovering. Leisure travel has grown steadily for 1–2 years, and inbound tourism is rebounding; business travel and corporate activity have bottomed and are turning up, particularly in Tier-1/2 cities. We are cautiously optimistic on 2026 RevPAR. The company's goal is full-year RevPAR at flat to slightly positive YoY. **Q: Any change to the 2026 opening cadence? What is the expansion target for Hanting in and other new brands?** A: In 2025 we opened over 2,400 hotels, a record. In fact, we pivoted in 2023 toward high-quality, sustainable growth—prioritizing quality standards across the network, not only count. Under these standards, we still expect a high level of openings in 2026, guiding 2,200–2,300 new hotels. This reflects the high-quality growth strategy, and we are confident in reaching 20,000 hotels by 2030. On Hanting in: the economy segment is core demand in China and Huazhu's core market. Our aim is broad, high-share coverage in economy; Hanting has upgraded meaningfully from years ago, and Hanting in helps us serve a wider mass market. Hanting in sits within the Hanting brand family, extending coverage of the mass segment while upgrading and replacing aging Hanting assets, thereby sharpening Hanting's positioning. **Q: Details of Legacy-DH's shift to asset-light and future expansion/financial targets?** A: We turned DH profitable in 2025, but the work continues—organizational restructuring, efficiency gains, and cost control remain priorities. Portfolio actions are ongoing: rent reductions, lease renegotiations, exiting loss-making properties, and optimizing the asset mix. With operations stabilized, we are now looking to grow the hotel network. We have more confidence managing international hotels and see significant potential for limited/select-service formats in overseas markets. We are developing different business models—using next-gen Intercity and Sleep as growth platforms—and exploring a resumption of expansion for Steigenberger. Europe remains core, and we will also expand in MENA where we already have a base; Legacy-DH is expected to remain profitable. **Q: FY25 shareholder returns reached $760mn, exceeding 100% of adj. net profit, and over 75% of the $2bn three-year plan is done. What is the future return plan?** A: Benefiting from an asset-light model and high-quality growth, Huazhu generates strong, stable cash flow while maintaining a healthy balance sheet. Looking ahead, we remain committed to returning cash to shareholders via dividends and/or buybacks. **Q: What are the mid-to-upscale plans? Any acceleration?** A: Mid-to-upscale is a strategic priority; we have focused on it over the past two years and will continue to do so. Our strategy differs from peers by concentrating on Tier-1/2 cities and a multi-brand approach, with four core brands: Manxin, Ji, Orange Crystal, and Mercure. Each brand targets distinct segments and aesthetics, from Manxin's oriental design to Mercure's French style, while Ji and Orange Crystal have clear positions. Over the past two years, Ji has become a compelling composite brand in mid-to-upscale, with strong brand equity, product, service excellence, and RevPAR. We also launched Grand Ji, which will officially open on Apr 1. With these four differentiated core brands, we are confident of becoming a mid-to-upscale leader by 2030, with each brand leading its niche. ### Related Stocks - [HWORLD-S (01179.HK)](https://longbridge.com/en/quote/01179.HK.md) - [H World Group Limited (HTHT.US)](https://longbridge.com/en/quote/HTHT.US.md) - [Definitive Healthcare Corp. (DH.US)](https://longbridge.com/en/quote/DH.US.md)