Thank you. Welcome to our Fourth Quarter and Full Year 2023 Earnings Call. Today you’ll hear from Chairman and CEO, Mr. Wang Haijun and our Co-Chief Financial Officer, Mr. Wang Shoudong and 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 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 available on our website at ir.yaduo.com. Now, I will turn the call over to Mr. Wang, our CEO.

Thank you, Alison. Hello, everyone, and thank you for joining Atour's fourth quarter and full year 2023 earnings call today. 2023 was an exceptional year for Atour, during which we revealed our plan to expand our portfolio to 2,000 premier hotels nationwide by 2025 and set the Chinese experience as the industry's standard. Throughout the year, we focused on enhancing digitalization, organization, corporate culture, management, and operational capabilities, forming the foundation of our sustainable growth as a solid business. Our distinctive Chinese experience is resonating strongly with people. Moreover, we reached significant milestones in expanding our hotel network. In 2023, we opened 289 new hotels and signed 576 additional projects, exceeding our initial targets and creating a solid groundwork for our goal of 2,000 premier hotels by 2025. 2024 is expected to be a year of innovation and breakthroughs as we build on this success. We remain committed to providing our customers with diverse services and exceptional experiences that extend beyond accommodation. First, we will increase awareness of our culturally inviting and interesting experiences, fostering lasting connections with our discerning customers. Second, we aim to create a seamless transition between our retail and accommodation services to deliver our unique deep sleep experience to all members. Finally, we will continue to advance digitalization, enabling experiential enhancements and elevating the Chinese experience to new levels. In expanding our network strategy, we will strengthen Atour’s leading position in the upper mid-scale market while enhancing brand awareness in the middle scale market and building a sustainable franchise ecosystem that supports the steady growth of our hotel networks. Now, I would like to share more details about our performance for the fourth quarter and full year of 2023. Let’s start with our hotel business. In the fourth quarter, our RevPAR returned to 109% of 2019’s level, with both ADR and OCC exceeding 2019’s levels for the fourth consecutive quarter. Specifically, the RevPAR recovery rates for October, November, and December were 109%, 107%, and 110%, respectively, compared to the same periods in 2019. These results highlight the resilience of our hotel business, driven primarily by business travel demand. Additionally, our mature hotels, in operation for more than 18 months, performed well in the quarter with their same-hotel RevPAR recovery rates reaching 110% of 2019’s levels in the fourth quarter, consistent with the overall performance of our hotel business. Meanwhile, we have built a highly competitive development team with an efficient structure and a unified strategy in key business districts to support the rapid expansion of our hotel network. In the fourth quarter, we opened 100 hotels, a record high for a single quarter, bringing the total new openings for the full year to 289. By the end of 2023, we had 1,210 hotels in operation. Our new signings remained strong in the fourth quarter, with our pipeline continuing to grow. As of December 31st, the number of hotels under development reached 617, reflecting a 70% year-over-year increase. Atour Light 3.0, our mid-scale offering, continued to gain market recognition, evidenced by 27 new signings in the fourth quarter, making up over 15% of our total new signings for the period. By the end of the year, we had 25 Atour Light 3.0 hotels in operation, rapidly moving past the ramp-up phase and demonstrating strong operational performance upon reaching maturity. In higher-tier cities’ core business districts, these hotels have excelled in both operational performance and customer experiences, showcasing Atour Light 3.0’s strengths in products, services, and brand influence in the mid-scale market. Furthermore, we established an independent branding department for Atour Light in the fourth quarter, focusing on creating a unique accommodation brand image favored by younger customers. We introduced a series of unique services represented by Blue Fronts, enabling customers to deeply explore local tourism, culture, and culinary specialties. These initiatives aim to provide our Atour Light customers with enjoyable tours and relaxing accommodation. To cater better to young business travelers' preferences, we launched innovative exclusive Atour Light privilege services under the concept of ‘Life at Ease’. Atour Light 3.0 fulfills young business travelers' demand for stylish and high-quality accommodation, earning increasing recognition from customers. As we move towards reaching the 1,000 hotel mark, we are confident in Atour Light 3.0’s vast potential and believe it will drive a comprehensive upgrade of China’s mid-scale hotel market. In the upper mid-scale segment, we launched Atour 4.0 in November last year, receiving strong attention and praise from the market upon its introduction. Guided by stricter criteria, we successfully identified a series of projects within selected properties across target cities. The first Atour 4.0 hotel is progressing well and is expected to open soon. We are confident that as we release Atour 4.0 hotels gradually, they will elevate our entire upper mid-scale portfolio. Moving on to our prime memberships, driven by Atour’s growing brand recognition, our membership base experienced significant growth in the fourth quarter of 2023. As of December 31st, our registered members surged by 78% year-over-year, surpassing 63 million. A key digital initiative this year is to integrate retail scenarios into our membership benefits and establish a Unified One ID Atour Membership, promoting mutual growth across these two major business segments. We will enhance premium benefits across all scenarios, unlock value through seamless integration of our corporate and individual membership ecosystems, and encourage deeper brand collaborations across various industries. Despite a decline in leisure travel demand during the fourth quarter, business travel activity remained strong. As the preferred brand for business travelers, Atour witnessed an increase in room nights sold through our CRS to 65.1% for the fourth quarter and 63.4% for the full year. The rapid growth of our corporate membership contributed to room nights sold to corporate members reaching 20.8% in the fourth quarter. Lastly, our retail business saw remarkable growth in 2023, with total GMV reaching RMB 1.14 billion, roughly three times higher than last year. Online sales made up over 80% of the total GMV, with noteworthy achievements on content e-commerce platforms. For example, GMV from Douyin surged to RMB 400 million in 2023, a remarkable 16-fold increase compared to the previous year. Meanwhile, our Deep Sleep products emerged as a market force in 2023. Throughout the year, our retail business focused on sleep scenarios to understand customers’ sleep needs and address their difficulties. Aiming to provide a relaxing and comfortable sleep experience, Atour Planet’s product capabilities strengthened in 2023 with several major launches in our deep sleep series. Among these, our deep sleep pillow Pro sold over 1.2 million units throughout the year, topping sales charts in the pillow segment on Tmall, Douyin, and JD.com during the Double Eleven Shopping Festival. We also maintained our position as the most mentioned pillow product, along with our deep sleep temperature control quilt, which exceeded 100,000 units sold in 2023. Driven by a commitment to innovation and product development, Atour Planet's deep sleep portfolio is set for further growth. Over the past year, we made significant strides in our retail business by concentrating on deep sleep scenarios to ensure exceptional experiences. Following our Chinese Experience Strategy, we achieved an industry-leading shopping experience across major third-party platforms. Additionally, by merging retail and accommodation scenarios, we provided customers the chance to experience the Atour Deep Sleep Pillow Pro through APLUS services during their stays, attracting a large customer base with over 400,000 orders to date. Leveraging our deep sleep insights, we maintained our product growth trajectory in 2023, continuously launching premier products that align with the evolving demands of the times. This strategic approach greatly contributed to the rapid expansion of our retail business. At the same time, we enhanced our efforts in brand building, upgrades, and product development. Using in-depth feedback from our members' real sleep experiences, we continually optimize our deep sleep offerings, strengthening our brand and product capabilities. As we enter 2024, we will focus on brand-driven growth and establishing a comprehensive brand value continuum. We will work on improving our products' competitive edge and expanding product categories by utilizing our efficient product development process, aiming to provide our customers with diverse and high-quality sleep products. Furthermore, we plan to foster synergistic development between our retail and hotel businesses, using our hotels to create a comprehensive experiential ecosystem that allows customers to engage fully in a meaningful sleep experience during their stays. Over the past year, we have observed a steady recovery in domestic business travel, alongside rapid growth in leisure travel. Looking ahead to 2024, we anticipate sustained growth in business travel and continued popularity of experience-driven leisure tourism. As a leading upper midscale hotel chain in China, Atour’s unique neighborhood service style and innovative deep sleep experience will continue to offer customers exceptional accommodation experiences, further enhancing Atour’s brand value and expanding the recognition of the Chinese experience. Now, I will turn the call over to our Co-CFO Mr. Wu Jianfeng to review our financial results.

Thank you, Haijun. Now I would like to present the company's financial performance for the fourth quarter and the full year of 2023. Our net revenues for the fourth quarter of 2023 grew by 140.4% year-over-year and 15.3% quarter-over-quarter to RMB 1,505 million. Net revenues for the full year of 2023 increased by 106.2% year-over-year to RMB 4,666 million. The strong increases were driven by the robust growth in both hotel and retail business. Revenue from our managed hotels for the fourth quarter was RMB 851 million, up by 133.3% year-over-year and 9.0% quarter-over-quarter. For the full year 2023, revenue from our managed hotels increased by 98.8% year-over-year to RMB 2,706 million. The increases were primarily fueled by the ongoing expansion of our hotel networks and the increase in RevPAR. The total number of managed hotels increased to 1,178 as of December 31, 2023, up by 31.0% year-over-year and 9.1% quarter-over-quarter, while RevPAR recovered to RMB 353 million and RMB 371 for the fourth quarter and the full year of 2023 respectively. Revenues contributed by our leased hotels for the fourth quarter were RMB 195 million, representing an increase of 40.4% year-over-year and a decrease of 18.1% quarter-over-quarter. For the full year of 2023, revenues from our leased hotels increased by 51.9% year-over-year to RMB 880 million. These increases were primarily due to an increase in RevPAR, which recovered to RMB 495 million and RMB 517 million for the fourth quarter and the full year of 2023 respectively. The quarter-over-quarter decrease was mainly due to the seasonality and the closure of one leased hotel in September. Revenue from the retail business for the fourth quarter increased by 315.6% year-over-year and 75.3% quarter-over-quarter to RMB 412 million. For the full year 2023, revenue from our retail business increased by 283.2% year-over-year to RMB 972 million. The increases were attributable to widespread recognition of our retail brands and compelling product offerings, as well as improved product development and distribution facilities. Now let's move to cost and expenses for the fourth quarter which increased by 106.0% year-over-year and 18.9% quarter-over-quarter to RMB 933 million. The year-over-year increase was mainly due to the increase in variable costs such as supply chain costs associated with the ongoing extension of our hotel network. The quarter-over-quarter increase was mainly due to an impairment of RMB 47 million from our leased hotel booked in the fourth quarter of 2023 compared with RMB 13 million booked in the previous quarter. Hotel operating costs for the full year 2023 were RMB 2,241 million, an increase of 60.8% year-over-year. Gross margin for our hotel businesses was 29.9% and 36.8% for the first quarter and the full year of 2023 respectively compared with 29.3% and 27.2% for the same period of 2022. Retail cost for the fourth quarter increased by 295.4% year-over-year to RMB 232 million. For the full year 2023, retail cost increased by 238.1% year-over-year to RMB 513 million. The increase was associated with the rapid growth of our retail business. Gross margin of our retail business was 43.7% and 47.2% for the first quarter and the full year of 2023 respectively, compared with 40.8% and 40.1% for the same period of 2022. The increases were attributable to an increase in contribution from high-margin online sales. Selling and marketing expenses for the first quarter of 2023 increased by 283.2% year-over-year to RMB 207 million. Selling and marketing expenses for the full year 2023 increased by 235.6% year-over-year to RMB 470 million. The increases were mainly due to our increased investments in brand awareness and online channel development associated with our retail business. General and administrative expenses for the fourth quarter of 2023 were RMB 105 million including RMB 2 million share-based compensation expenses, compared with RMB 217 million including RMB 150 million share-based compensation expenses for the same period of 2022. For the full year 2023, general and administrative expenses were RMB 451 million including RMB 152 million share-based compensation expenses, compared with RMB 350 million including RMB 160 million share-based compensation expenses for the full year 2022. The increases, excluding the impacts from share-based compensation, were primarily due to increased costs related to management personnel and professional services expenses. Technology and development expenses for the first quarter of 2023 increased by 39.7% year-over-year to RMB 22 million. Technology and development expenses for the full year 2023 increased by 16.8% year-over-year to RMB 77 million. Adjusted EBITDA for the fourth quarter of 2023 was RMB 251 million, up by 115.1% year-over-year. Adjusted net income for the fourth quarter increased by 175.8% year-over-year to RMB 222 million. Adjusted net profit margin for the full year 2023 was 19.4%, up by eight percentage points year-over-year. The significant increase in gross profit margin in both our hotel and retail businesses, along with our optimizing operating leverage, improved the group’s overall networking margin. Note that we have maintained a healthy cash position with stable growth momentum as of December 31, 2023, our cash and cash equivalents totaled RMB 2.8 billion among the net cash was approximately RMB 2.8 billion. That concludes our financial highlights for the fourth quarter and the full year 2023. With that, let’s open for Q&A.

We will take our first question. Your first question comes from Lydia Ling from Citi. Please go ahead. Your line is open.

Hi, management. This is Lydia from Citi. Congratulations on the results. My question is focused on the growth outlook for 2024. Can you provide insights into the hotel opening plan for this year? Additionally, could you share your latest expectations for the RevPAR trend and your revenue guidance for this year? Any information on the fourth quarter trend would be very helpful, particularly regarding the expectations for RevPAR performance during the Timmy and Liberty Holidays. Finally, what is your latest guidance on margin trends for 2024? We also noted an actual increase in the light access ratio in the fourth quarter. What are your expectations for 2024?

Thanks, Lydia. Let me address your question about our new openings. In 2023, we opened 289 new hotels, bringing our total to 1,210 by the end of the year, which represents a 30% increase. We plan to maintain that growth rate this year, targeting 360 new openings. Of these, approximately 200 to 220 will be Atour hotels and 60 to 80 will be Atour Light hotels. This progress will help us achieve our goal of 2,000 premier hotels by 2025. Regarding RevPAR, we will maintain a 30% growth rate for new hotel openings, which will be a larger proportion compared to our peers, aided by strong expansion of our mid-scale Atour Light offerings. This increase in Atour Light hotels could affect our overall RevPAR. Considering some uncertainties in the external environment, we are cautiously optimistic about this year's RevPAR growth and aim to match last year's levels. Looking at the Timmy and Liberty Holidays, our reservation data shows very active traffic, and we expect strong results from both holidays. For revenue guidance, we anticipate a 30% growth in 2024, which would lead the industry. We are confident in improving profits across all our business segments due to optimizations and increased operating efficiency. However, changes in each revenue stream may affect our overall profit margin. We do expect our profit margin to continue with relatively stable and moderate growth. Thank you.

Thank you, Lydia. Let's have the next question.

Thank you. Please stand by. Your next question comes from the line of Sijie Lin from CICC. Please go ahead. Your line is open.

I’ll translate my question to English. Thank you to the management. We have discussed the new openings, and I have a follow-up question regarding the new signings. What is the target for new signings this year? What progress has been made in the first quarter? I have also noticed a change in the confidence and interest from franchisees since this year. Thank you.

Thank you, Sijie, for your question. We signed 576 projects in the full year of 2023, which was an outstanding performance. Now entering Q1 2024, we have maintained that strong momentum on signings overall. The franchise market is still active. In 2024, we are confident that by leveraging Atour’s growing brand influence and with our newly launched product competitiveness, more franchisees will be attracted to Atour’s system.

Thank you, Sijie. Let's have the next question.

Thank you. We will now take the next question. The next question is from a representative of Morgan Stanley. Please proceed; your line is open.

My question is about scenario-based retail business. You reported outstanding performance last year. I would like to know about the management’s strategic plan for 2024 in this segment, particularly regarding your product plans and any preliminary revenue guidance related to the projected 30% year-over-year growth.

Thank you for your question. The retail business is our second growth driver that achieved outstanding results in 2023 with full year revenue of RMB 970 million, accounting for 20.8% of our total revenue. In 2024, we will continue to drive healthy growth in the retail business and focus on building our brand and products. We plan to concentrate on Atour Planet and our deep sleep products. We will consistently improve our R&D capability for retail products to further explore the deep sleep categories. In 2023, we successfully introduced three pillow products, each generating sales of RMB 100 million, and launched our deep sleep Temperature Control Quilt, which has been well received by consumers. On March 21, 2024, which is World Sleep Day, we launched our new product, The Atour Planet Deep Sleep Summer Cool Quilt, further expanding our product portfolio. Additionally, we will strengthen the integration of our retail business with accommodation scenarios to place more deep sleep products into our Atour Hotels this year, creating an immersive sleep experience for our consumers and enhancing the Atour deep sleep experience. With this latest financial report, we have started to disclose information about the retail business as an independent business unit. We also plan to enhance our fundamental capabilities in retail including organization, R&D, data infrastructure, and channels to establish a solid foundation for our long-term sustainable growth. Since the beginning of 2024, our retail business has continued its positive momentum, and we expect full-year retail revenue to grow more than 50%, reaching RMB 1.45 billion. Thank you.

Thank you, Dan. Let's have the next question.

Thank you. We will take our next question. The next question comes from the line of Xin Chen from UBS. Please go ahead. Your line is open.

This is Xin Chen from UBS. I have two questions. Firstly, I have noticed the expected tax rate has decreased significantly in the fourth quarter. What is the main reason for this? The second question is about the company’s cash utilization plan. Is the company considering a dividend payout or share buyback to enhance shareholder retention? Thank you.

Thank you, Mr. Chen. Regarding the taxation question, we have an entity that benefited from preferential tax policies in 2023, along with a one-time tax exemption in the fourth quarter. As for your second question on cash utilization, due to our strong business growth and asset-light model, the Group’s cash flow showed healthy growth. As of December 31 last year, our Group’s net cash and short-term investments at banks totaled RMB 3.5 billion. This year, we will carefully evaluate various methods of rewarding our shareholders, such as dividends and share buybacks, to continually improve the efficiency of our cash utilization. Thank you.

Thank you. And we can take one more question.

Thank you. We will take our last question. Your final question comes from the line of Candice Tsang from Bank of America. Please go ahead. Your line is open.

Thanks for the opportunity to ask my question. This is Candice Tsang from Bank of America. My questions are specifically about Atour Light 3.0. Management has just shared the hotel opening targets for 2024. Would you have any goals for new signings of Atour Light 3.0 this year? How is the performance and operating status of these open hotels? Lastly, can management share their views on the competitive landscape of the mid-scale hotel segment overall?

Thank you, Candice. Atour Light 3.0 is our mid-scale offering designed for young business travelers, and it has gained significant popularity among franchisees since its launch in February last year, as evidenced by over 90 new signings in 2023. Atour Light 3.0 targets key business districts in major cities, aiming to set quality benchmarks in the mid-scale hotel segment. We have already opened Atour Light 3.0 hotels in 21 cities, including Shanghai, Guangzhou, and Shenzhen, all demonstrating strong operational performance. For example, the average RevPAR for our leading hotel, the Atour Light Hotel at Guangzhou, since its opening in November last year has surpassed RMB 600, greatly outperforming nearby competitors. Regarding your question about the competitive landscape in the mid-scale market, we are confident that the market's scale has been established. The design of Atour Light 3.0 appeals to the aesthetic preferences of young individuals, and the consistent service we provide meets the high accommodation standards expected by young business travelers, achieving strong consumer recognition. As I previously noted, the operational performance of Atour Light 3.0 hotels has been very competitive within their districts, and their return on investment is quite clear. With its strong competitiveness and widespread market acceptance, we believe Atour Light is on track to become the second brand within Atour Group to reach 1,000 hotels. Thank you.

And that concludes the question & answer session. I would like to turn the conference back over to you, Allison Zhang for any additional or closing comments.

Thank you for joining us today. If you have any further questions, please feel free to contact our Investor Relations team. We look forward to reconnecting with you next quarter. Thank you and goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect.