GreenTree Hospitality Group Ltd. (NYSE: GHG)

Sector: Consumer Cyclical Industry: Lodging CIK: 0001724755
Market Cap 146.20 Mn
P/B 0.61
P/E 5.51
P/S 0.84
ROIC (Qtr) 0.00
Div Yield % 0.00
Rev 1y % (Qtr) -14.95
Total Debt (Qtr) 239.07 Mn
Debt/Equity (Qtr) 1.00
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About

GreenTree Hospitality Group Ltd., often referred to as GreenTree, operates in the hospitality industry, with its base in the Cayman Islands and operations primarily in China. The company, established in 2004, has experienced significant growth and now boasts a portfolio of over 11 brands and 4,238 hotels as of December 31, 2023. GreenTree's primary business activities revolve around franchised and managed hotels, which account for approximately 98.5% of its total hotels in operation. The company's revenue generation is mainly through franchise...

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Investment thesis

Bull case

  • Healthy cash reserves of 234.87M provide 7.69x coverage of short-term debt 30.54M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 704.06M provides 2.94x coverage of total debt 239.07M, indicating robust asset backing and low credit risk.
  • Tangible assets of 704.06M provide exceptional 15.80x coverage of deferred revenue 44.57M, showing strong service capability backing.
  • Robust tangible asset base of 704.06M provides 6.62x coverage of working capital 106.28M, indicating strong operational backing.
  • Tangible assets of 704.06M provide robust 5.47x coverage of other current liabilities 128.83M, indicating strong asset backing.

Bear case

  • High receivables of 33.27M relative to inventory of 951480.20 (34.96 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating cash flow of 0 provides insufficient coverage of deferred revenue obligations of 44.57M, which is 0x, raising concerns about future service delivery capabilities.
  • Retained earnings of (28.38M) provide limited buffer against comprehensive income items of 481191.85, which is -58.98x, indicating elevated exposure to market risks.
  • Tax assets of 33.91M provide limited offset against tax liabilities of 84.70M, which is 0.40x, indicating potential future cash flow pressure from tax obligations.
  • Other current assets of (2.99M) provide weak coverage of payables of 6.95M, which is -0.43x, suggesting potential working capital stress in near term.

Consolidation Items Breakdown of Revenue (2024)

Peer comparison

Companies in the Lodging
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MAR Marriott International Inc /Md/ 98.24 Bn 37.77 3.75 17.08 Bn
2 HLT Hilton Worldwide Holdings Inc. 74.93 Bn 51.43 6.22 13.09 Bn
3 HTHT H World Group Ltd 16.57 Bn 29.82 4.76 5.22 Bn
4 H Hyatt Hotels Corp 16.03 Bn -308.35 2.26 4.56 Bn
5 WH Wyndham Hotels & Resorts, Inc. 7.74 Bn 49.28 3.77 2.63 Bn
6 CHH Choice Hotels International Inc /De 6.15 Bn 28.50 5.74 2.03 Bn
7 ATAT Atour Lifestyle Holdings Ltd 5.47 Bn 31.48 5.16 0.23 Bn
8 CVEO Civeo Corp 0.40 Bn -13.95 0.64 0.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets -0.04 1.88
EV to Cash from Ops. EV/CFO -0.64 35.03
EV to Debt EV to Debt -0.12 3.56
EV to EBIT EV/EBIT -0.78 8.28
EV to EBITDA EV/EBITDA -0.45 15.04
EV to Free Cash Flow [EV/FCF] EV/FCF -0.95 42.92
EV to Market Cap EV to Market Cap -0.20 0.84
EV to Revenue EV/Rev -0.16 0.57
Price to Book Value [P/B] P/B 0.61 -4.94
Price to Earnings [P/E] P/E 5.51 -9.64
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 1.70
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 7.38
Dividend per Basic Share Div per Share (Qtr) 0.00 0.85
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.54
Interest Coverage Int. cover (Qtr) 0.00 -155,266.31
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.00 -4.84
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 8.61 122.26
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -2.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 0.00 -107.49
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.00 3.84
EBIT Growth (1y) % EBIT 1y % (Qtr) 0.00 12.05
EBT Growth (1y) % EBT 1y % (Qtr) 0.00 2.05
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 -10.22
FCF Growth (1y) % FCF 1y % (Qtr) 0.00 -17.22
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.00 5.20
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.00 0.47
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.13
Cash Ratio Cash Ratio (Qtr) 1.41 0.54
Current Ratio Curr Ratio (Qtr) 1.64 1.20
Debt to Equity Ratio Debt/Equity (Qtr) 1.00 1.44
Interest Cover Ratio Int Coverage (Qtr) 0.00 -155,266.31
Times Interest Earned Times Interest Earned (Qtr) 0.00 -155,266.31
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -228.61
EBIT Margin % EBIT Margin % (Qtr) 0.00 -214.73
EBT Margin % EBT Margin % (Qtr) 0.00 -246.57
Gross Margin % Gross Margin % (Qtr) 0.00 36.71
Net Profit Margin % Net Margin % (Qtr) 0.00 -250.50