NYSE:GHG

Stock Analysis Report

GreenTree Hospitality Group

Executive Summary

GreenTree Hospitality Group Ltd., through its subsidiaries, operates as a franchised hotel operator in the People’s Republic of China.

Rewards

Trading at 24.2% below its fair value

Earnings are forecast to grow 15.59% per year

Earnings grew by 40.8% over the past year

Risk Analysis

Unstable dividend track record

Shareholders have been diluted in the past year



Snowflake Analysis

Outstanding track record with excellent balance sheet.


Similar Companies

Share Price & News

How has GreenTree Hospitality Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GHG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.5%

GHG

-0.6%

US Hospitality

0.8%

US Market


1 Year Return

8.3%

GHG

16.7%

US Hospitality

25.1%

US Market

Return vs Industry: GHG underperformed the US Hospitality industry which returned 20.1% over the past year.

Return vs Market: GHG underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

GHGIndustryMarket
7 Day-1.5%-0.6%0.8%
30 Day13.6%1.1%3.1%
90 Day25.9%11.3%10.9%
1 Year13.2%8.3%19.8%16.7%27.7%25.1%
3 Yearn/a40.1%30.7%51.3%41.6%
5 Yearn/a50.4%34.3%77.2%57.6%

Price Volatility Vs. Market

How volatile is GreenTree Hospitality Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is GreenTree Hospitality Group undervalued compared to its fair value and its price relative to the market?

25.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GHG ($13.29) is trading below our estimate of fair value ($17.52)

Significantly Below Fair Value: GHG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GHG is good value based on its PE Ratio (21.2x) compared to the Hospitality industry average (25.1x).

PE vs Market: GHG is poor value based on its PE Ratio (21.2x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: GHG is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: GHG is overvalued based on its PB Ratio (4.9x) compared to the US Hospitality industry average (2.4x).


Next Steps

Future Growth

How is GreenTree Hospitality Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

15.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GHG's forecast earnings growth (15.6% per year) is above the savings rate (1.7%).

Earnings vs Market: GHG's earnings (15.6% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: GHG's earnings are forecast to grow, but not significantly.

Revenue vs Market: GHG's revenue (13.9% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: GHG's revenue (13.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GHG's Return on Equity is forecast to be high in 3 years time (23%)


Next Steps

Past Performance

How has GreenTree Hospitality Group performed over the past 5 years?

18.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GHG has high quality earnings.

Growing Profit Margin: GHG's current net profit margins (40.6%) are higher than last year (35.8%).


Past Earnings Growth Analysis

Earnings Trend: GHG's earnings have grown by 18.6% per year over the past 5 years.

Accelerating Growth: GHG's earnings growth over the past year (40.8%) exceeds its 5-year average (18.6% per year).

Earnings vs Industry: GHG earnings growth over the past year (40.8%) exceeded the Hospitality industry -18.9%.


Return on Equity

High ROE: GHG's Return on Equity (21.9%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is GreenTree Hospitality Group's financial position?


Financial Position Analysis

Short Term Liabilities: GHG's short term assets (CN¥1.4B) exceed its short term liabilities (CN¥746.4M).

Long Term Liabilities: GHG's short term assets (CN¥1.4B) exceed its long term liabilities (CN¥855.1M).


Debt to Equity History and Analysis

Debt Level: GHG's debt to equity ratio (3%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if GHG's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: GHG's debt is well covered by operating cash flow (913.5%).

Interest Coverage: GHG earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: GHG has a low level of unsold assets or inventory.

Debt Coverage by Assets: GHG's debt is covered by short term assets (assets are 23.8x debt).


Next Steps

Dividend

What is GreenTree Hospitality Group's current dividend yield, its reliability and sustainability?

2.25%

Current Dividend Yield


Dividend Yield vs Market

company2.3%marketbottom25%1.4%markettop25%3.7%industryaverage2.9%forecastin3Years1.4%

Current dividend yield vs market & industry

Notable Dividend: GHG's dividend (2.19%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: GHG's dividend (2.19%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether GHG's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if GHG's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.9%), GHG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GHG's dividends in 3 years are forecast to be well covered by earnings (25.1% payout ratio).


Next Steps

Management

What is the CEO of GreenTree Hospitality Group's salary, the management and board of directors tenure and is there insider trading?

9.5yrs

Average management tenure


CEO

Alex S. Xu (55yo)

16yrs

Tenure

0

Mr. Alex S. Xu is the Founder of GreenTree Inns Hotel Management Group., Inc. and serves as its Chief Executive Officer and Chairman. Mr. Xu is the Founder of GreenTree Hospitality Group Ltd. and has been  ...


Management Age and Tenure

9.5yrs

Average Tenure

48yo

Average Age

Experienced Management: GHG's management team is seasoned and experienced (9.5 years average tenure).


Board Age and Tenure

9.0yrs

Average Tenure

50.5yo

Average Age

Experienced Board: GHG's board of directors are considered experienced (9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.4%.


Management Team

  • Gregory James Karns (63yo)

    General Counsel & Director

    • Tenure: 15yrs
  • Alex S. Xu (55yo)

    Founder

    • Tenure: 16yrs
  • Yiping Yang (36yo)

    CFO & Director

    • Tenure: 2yrs
  • Wen Qi (41yo)

    Vice President of Human Resources & Administration

    • Tenure: 4yrs
  • Qing Huang

    Director of IT Department


    Board Members

    • Bingwu Xie (49yo)

      Independent Director

      • Tenure: 9yrs
    • Gregory James Karns (63yo)

      General Counsel & Director

      • Tenure: 15yrs
    • Akira Hirabayashi (52yo)

      Independent Director

      • Tenure: 9yrs
    • Alex S. Xu (55yo)

      Founder

      • Tenure: 16yrs
    • Yiping Yang (36yo)

      CFO & Director

      • Tenure: 2yrs
    • Dong Li (43yo)

      Independent Director

      • Tenure: 1.8yrs

    Company Information

    GreenTree Hospitality Group Ltd.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: GreenTree Hospitality Group Ltd.
    • Ticker: GHG
    • Exchange: NYSE
    • Founded: 2004
    • Industry: Hotels, Resorts and Cruise Lines
    • Sector: Consumer Services
    • Market Cap: US$1.314b
    • Shares outstanding: 101.87m
    • Website: https://www.998.com

    Number of Employees


    Location

    • GreenTree Hospitality Group Ltd.
    • 2451 Hongqiao Road
    • Changning District
    • Shanghai
    • 200335
    • China

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    GHGNYSE (New York Stock Exchange)YesSPONSORED ADSUSUSDMar 2018

    Biography

    GreenTree Hospitality Group Ltd., through its subsidiaries, operates as a franchised hotel operator in the People’s Republic of China. The company operates hotels under the brand names of GreenTree Eastern, Gme, Gya, VX, GreenTree Inns, GT Alliance, Vatica, and Shell. As of December 31, 2018, it had 29 leased-and-operated hotels and 2,728 franchised-and-managed hotels with 221,529 rooms in 290 cities. The company was founded in 2004 and is headquartered in Shanghai, the People’s Republic of China. GreenTree Hospitality Group Ltd. is a subsidiary of GreenTree Inns Hotel Management Group, Inc. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/22 01:37
    End of Day Share Price2020/01/21 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.