Thank you, Maggie. Good morning and good evening, everyone. Thanks for joining us today. Welcome to H World Group 2024 First Quarter Earnings Conference Call. Joining us today is our Chairman, Mr. Ji Qi; our CEO, Mr. Jin Hui; and our CFO, Mr. Zou Jun. Following their prepared remarks, management will be available to answer your questions. Before we continue, please note that the discussion today will include forward-looking statements made under the safe harbor provision of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. H World Group does not undertake any obligations to update any forward-looking statements, except as required under applicable laws. On the call today, we will also mention adjusted financial measures during the discussion of our performance. Reconciliations of those measures to comparable GAAP information can be found in our earnings release that was distributed last Friday. As a reminder, this conference call is being recorded. The webcast of this conference call, as well as a supplementary slide presentation, is available at ir.hworld.com. With that, now I will hand over the call to our CEO, Mr. Jin Hui, to discuss our business performance in the first quarter of 2024. Mr. Jin, please.

We had a relatively good start for 2024. Let's firstly review our Legacy-Huazhu's operational performance during the quarter. Please turn to Page 3. In the first quarter of 2024, Legacy-Huazhu's blended RevPAR reached RMB 216, representing a growth of 3.1% on a year-over-year basis. ADR grew by 1% to RMB 280 and occupancy rate grew by 1.6 percentage points to 77.2%. The business performance was quite stable during the quarter and was within our expectations at the beginning of the year. In terms of hotel network expansion, we are happy to see that some important strategic adjustments and changes we made in the past few years, such as organizational upgrades, establishment of regional headquarters, and a sustainable quality expansion strategy are rapidly achieving positive outcomes. Please turn to Page 4. On the hotel opening front, Legacy-Huazhu opened 569 hotels in the first quarter. The number of hotel closures was 148 in the first quarter, a decline of 61 hotels from the same period of last year. If excluding low-quality economic soft brand and Hanting 1.0, we closed only 72 hotels, which is 15 hotels less than the same period of last year. Our future hotel closures should gradually reach a more normalized level after a rapid cleanup and upgrade process over the last few years and our sustainable quality growth strategy. More importantly, our pipeline further grew to a record high of 3,138 at the quarter-end, despite our 569 new openings during the quarter. This further demonstrated our strong brand power and increasing attractiveness to franchisees. Our limited-service segment, which serves the mass market, remains our key strategic focus. Our economic and middle-scale products continue to be the key driver for our rapid network expansion. Breaking down our hotels in operation, hotels in the pipeline, and hotel openings in the first quarter of 2024, the proportion of economic and middle-scale hotels were 92%, 84%, and 92% respectively. It is critical to constantly upgrade products in a timely manner in order to meet and satisfy customers' needs, as we are seeing our customers' consumption behavior, preferences, and tastes changing rapidly and frequently nowadays. This is also one of the most important building blocks to enhance the competitiveness of our brand and gain traction from franchisees. In the past years, we have constantly introduced new upgraded versions of our major brands using our Iron-Triangle brand in the limited-service segment as examples. Please turn to Page 6. The proportion of Hanting 3.5 and above steadily increased from 11.8% as of 2020 to 29.8% as of 2023, and further to 33.2% as of the first quarter of 2024. Please turn to Page 7. For our JI Hotels in operation, the proportion of JI Hotel 4.0 and above products increased from 30% as of 2020 to 65.7% as of 2023, and further rose to 69% in the first quarter of 2024. Please turn to Page 8. As of the first quarter of 2024, the latest LOHAS versions of the Orange brand accounted for 75.7% in its pipeline, an increase from 58.4% as of 2023. In conclusion, our Iron-Triangle brands, including Hanting, JI Hotel, and Orange, have further strengthened their brand and product power through consistent product upgrades. As we continue penetrating into lower-tier cities and new markets, some new demand and a new group of customers have emerged. Therefore, in addition to our Iron-Triangle brand, as we mentioned above, we are also constantly developing new products to better meet the needs of different customer groups and market conditions. In the first quarter of 2024, based on our very mature and successful experiences with Hanting, we launched a new version of NiHao Hotel. The new NiHao is positioned as the complementary brand for Hanting in the economic segment, especially in the lower-tier cities. It is also positioned to cater to the accommodation needs of the younger generations. Please turn to Page 9. The brand new NiHao 2.0 integrates traditional Chinese color and texture symbols with contemporary aesthetics, showcasing Chinese ethnic confidence and providing consumers with additional choices for different aesthetics. At the same time, through the reinvention of new service scenarios, NiHao Hotel has integrated many value-added services, such as health preservation concepts, modern Chinese tea, and snacks into the self-service modules at the hotel lobby. This is in line with the current consumption philosophy of young customers who seek good value-for-money products but with positive experiences. The new NiHao will strongly align with our flagship brand Hanting to further solidify our leading position in the economic hotel market. In terms of our geographic expansion, we keep penetrating to lower-tier cities in China. Please turn to Page 10. As of the first quarter of 2024, 40% of our hotels in operation were located in Tier 3 and below cities, representing a 1 percentage point increase year-over-year. At the same time, 54% of the hotels in the pipeline were located in Tier 3 and below cities. The proportion of Tier 3 and below cities in the pipeline was slightly lower compared to the same period of last year, while the proportion of Tier 1 cities was a bit higher year-over-year. This was mainly due to a much faster new signings in the upper-mid segment and in the southern regions. In fact, the pipeline in Tier 3 and below cities was still growing in absolute numbers. As of the first quarter of 2024, the number of city coverage was 1,290, with 158 new cities added compared to the same period of last year. Please turn to Page 11. Our upper midscale segment development is continuously progressing. As of the first quarter of 2024, there were 686 upper-mid hotels in operation, representing a 28% year-over-year increase and a 6% quarter-over-quarter increase. There were also 430 upper-mid hotels in the pipeline, representing an 81% year-over-year increase and an 11% quarter-over-quarter increase. The fast-growing pipeline further demonstrated that our upper-mid brands, especially our key brands, including Intercity and Crystal Orange, were increasingly gaining recognition and popularity among customers and franchisees. Since last year, business traveling has been recovering relatively slower due to weaker-than-expected macroeconomic conditions. Nonetheless, our direct B2B business was growing quickly, which partially offsets some recovery gaps from individual business travelers. Please turn to Page 12. In the first quarter of 2024, the number of room nights booked directly via our B2B platform was more than $5 million, representing a 34% year-over-year increase. The number of active corporate clients surpassed 2,700, representing a 57% year-over-year increase. We believe that by continuing to strengthen our direct B2B sales capability, we could better cope with the potential volatility of business traveling and achieve more sustainable business development in the long run. Moving to our overseas business. Please turn to Page 13. DH blended RevPAR grew by 4.5% year-over-year to EUR 58 in the first quarter of 2024, driven by a 0.2% increase in ADR to EUR 104 and a 2.3 percentage point increase in occupancy rate to 55.8%. Last quarter, we mentioned that one of our DH's strategic focuses in 2024 is to seek growth opportunities internationally. We are pleased to see that DH has made some initial progress. Please turn to Page 14. As of the first quarter of 2024, 53% of hotels in operation were located in Germany. However, only 38% of pipeline hotels were located in Germany, and the remaining hotels were located in other European countries, APAC regions, and Africa, which accounted for 41%, 15%, and 6% respectively. All of the above concludes our first quarter 2024 business updates. Now, I will hand over the call to our CFO, Mr. Zou Jun, to discuss our operational and financial performance during the quarter.

Thank you, Jin Hui. Good morning and good evening to everyone. Let's go through our operational and financial review for the first quarter of 2024. Please turn to Page 16. In the first quarter, we continued to expand our hotel network. Our overall number of rooms increased 17% year-over-year to over 955,000 rooms as of the first quarter, compared to over 820,000 rooms as of the first quarter last year. Our hotel turnover for the first quarter of 2024 was RMB 19.7 billion, representing a 21% increase compared to the first quarter last year. Excluding DH, Legacy-Huazhu's hotel turnover grew 22% year-over-year to RMB 18.1 billion. Now please turn to Page 17. In the first quarter of 2024, our total revenue for the group increased 18% year-over-year to RMB 5.3 billion, exceeding our previous guidance of 12% to 16% year-over-year growth. Legacy-Huazhu achieved 18% year-over-year revenue growth to RMB 4.2 billion, and DH grew 17% year-over-year to RMB 1 billion. The revenue growth of Legacy-Huazhu surpassed the high end of our guidance, mainly driven by higher-than-expected hotel openings. For DH, its revenue growth was attributable to market recovery and favorable exchange rates. Please turn to Page 18. Hotel operating costs were RMB 3.6 billion in the first quarter of 2024. The year-over-year increase was primarily attributable to an increase in staff costs from our continued network expansion and reduced rental relief in China. The increase in hotel operating costs was slower than our revenue growth, reflecting the operating leverage of our business. Pre-opening expenses remained at a low level as we continue to focus on our asset-light expansion strategy and become more selective in opening leased and owned hotels. SG&A expenses were RMB 769 million in the first quarter of 2024 and accounted for 14.6% of total revenue. The year-over-year increase in both the absolute number and percentage of revenue of SG&A expenses were primarily due to continued business growth as well as a return to a normal level of selling and marketing expenses, headcount number, and compensation from the relatively low base of the same period of 2023, especially for our Legacy-Huazhu business. As a result, our income from operations for the quarter achieved RMB 1.0 billion, representing a 51% year-over-year increase. Now please turn to Page 19. In terms of our profitability and cash flow during the quarter, I'd like to firstly highlight that we have redefined our non-GAAP measure of adjusted EBITDA and adjusted net income in the quarter in order to better reflect the profitability from our core business operations. The new adjusted EBITDA and net income now excludes share-based compensation expenses, gain or loss from fair value exchange of equity securities, foreign exchange gain or loss, net, and gain or loss on disposal of investments. Similarly, we also have restated our adjusted EBITDA and adjusted net income for the first and fourth quarter of 2023 to provide a comparable basis. Under the new definition, in the first quarter of 2024, Legacy-Huazhu adjusted EBITDA achieved a 32% year-over-year increase to RMB 1.5 billion, thanks to continued business growth in our asset-light strategy. Our DH business reported a loss of adjusted EBITDA of RMB 66 million, which narrowed from a loss of RMB 98 million in the first quarter of last year. The adjusted EBITDA margin for the group and Legacy-Huazhu achieved 27% and 35% level, representing a 4% and a 3.5% year-over-year improvement, respectively. Our group adjusted net income was RMB 771 million in the first quarter of 2024, representing a 101% year-over-year increase. Our first quarter operating cash flow decreased year-over-year, mainly due to an increase in payable to franchisees in the first quarter of last year post-reopening. The quarter-over-quarter decrease was due to timing differences in compensation and franchisee fee payments. Now please turn to Page 20 on liquidity position. As of the first quarter of 2024, the group had RMB 8.9 billion in cash, cash equivalents or restricted cash and time deposits and was in a solid cash position with RMB 3.1 billion, including time deposits. Our cash balance and net cash decreased compared to the previous quarter, which was primarily driven by payments of dividends in the first quarter of 2024. We also had RMB 2.4 billion in unutilized bank facilities as of the first quarter of 2024. Now let's turn to Page 21. During the first quarter of 2024, we paid roughly RMB 300 million in cash dividends and repurchased roughly USD 75 million worth of shares from the market. As we become more asset-light and cash-rich, we'll continue to reward our shareholders through dividends and buybacks. Finally, please turn to Page 22 on our guidance. For the second quarter of 2024, we expect our revenue to grow between 7% to 11% compared to the second quarter of last year or 7% to 11% excluding DH.

Let me translate my questions into English. I have two questions. My first question is about RevPAR. What are management's expectations for RevPAR growth in the domestic China business for the second quarter? My second question is about DH. Management aims to shift towards an asset-light business model and plans to gradually sell off the asset-heavy business. What is the status of this disposal? Does management have a timeline for it?

Okay. Let me answer your first question. As you may know, that last year, the second quarter actually was a bit high base, especially during the May holiday. Last year, the May holiday was the first long holiday post the recovery from COVID. There was a lot of revenge traveling pent-up demand in the second quarter. Also, on the supply side, the supply recovery was a bit slower at that time in the second quarter of last year. Therefore, given the high base of last year's second quarter, we are facing a little bit of challenges for the RevPAR in the second quarter of this year. Therefore, we are expecting the RevPAR for this quarter will be flattish to slightly negative as of now. However, given the traveling activities, especially the number of travelers during the holiday, we are still quite confident because the number of travelers is still growing quite healthily during the holiday and in the second quarter as well, which gives us more confidence that the leisure traveling demand is actually sustainable in a longer-term perspective and becoming inelastic demand for the Chinese consumers. Even though the RevPAR might be slightly negative in the second quarter, through the hotel network expansions, we still expect to achieve 7% to 11% year-over-year revenue growth. The asset-light strategy for our DH business, which we mentioned in last quarter, is our long-term target because we want DH to become a more international hotel brand and management company. Transforming from asset-heavy to asset-light takes a bit longer time and involves a lot of complicated and complex negotiations with the potential counterparties, but the long-term strategy won't change. So far, the progress is still within our expectations. In terms of the closure time, as long as there is a milestone, we will just release that to the market on time.

Now please allow me to do the translation. Thank you, management, for the opportunity and congratulations on the first quarter's results. I have two questions. The first question is about lease and operated hotels. We noticed that the operating performance of L&O hotels has outperformed the franchise business. The year-on-year growth rate of L&O RevPAR was faster than that of the group's RevPAR by 6 percentage points. The same trend applies to same-store RevPAR growth, which also exceeded the performance of both franchise hotels and the overall group. We would like to know what management has done to enhance both occupancy and ADR, particularly for leased and owned hotels, and how sustainable these improvements are. Can these strategies be replicated in franchise hotel management? My second question pertains to the franchise hotel business. We observed that the take rate for F&M increased by 7%, which translates to about 0.5 percentage points. We recognize that our take rate can sometimes be influenced by seasonality. We are curious whether this increase in the take rate is sustainable and if there are any other factors involved, such as recurring franchise fees or CIS. That's all for my questions.

Okay. In terms of the leased and owned hotels, their performance is actually better than the group franchisees. This is because over the last 2 years, we have been investing quite a lot of management resources into the leased and owned hotels because running a leased and owned hotel in terms of the operation and the management is quite complicated. Therefore, from the initial investment period to the operational period for the entire life cycle of this hotel business, we have been investing a lot of management capability. For example, we have assigned good staff, such as hotel managers. In conclusion, this is the improvement of our management capability for running a hotel. We believe that this kind of capability, which has been demonstrated from the leased and owned model, can be replicated to other hotels, including franchised hotels. In terms of the increase in take rate, there were mainly 3 reasons. Firstly, we are continuously increasing the CRS as we focus on our direct sales capability through our H World app. This is one of the reasons. Secondly, it is due to wage increases or the increase in staff costs, especially at the hotel level for both our leased and owned and franchise hotels, which is the hotel managers. Thirdly, we are diving deeper into the management for our managed hotels, which has allowed us to reduce the discount rate for our management fee, as well as a one-time franchise fee, thus contributing to the improvement of the take rate. Therefore, the take rate increase is the result of multiple factors, while the staff cost increase is something unavoidable given the general trend in the market.

Let me translate into English. My first question relates to the stronger-than-expected hotel additions, with 569 additions in the first quarter already representing over 30% of the original guidance of 1,800 for the full year. Additionally, we have a RevPAR, which management indicated would likely be softer in the second quarter. I’m wondering if there will be any revised guidance for both hotel additions and the full-year revenue guidance of 8% to 12%. My second question is about business travel. We've been hearing from other operators that business travel has been quite weak so far. What trend do they expect looking into the second half? Since they are doing well with their B2B strategies and have 2,700 clients, which is up nearly 60%, how do they view the long-term opportunity in the business travel or B2B segment in general?

Okay. In terms of the hotel openings, before answering these questions, we want to remind you that since 2 years ago, we started our sustainable high-quality expansion strategy. Our hotel network expansion will focus only on flagship hotels as well as high-quality expansion. This year, as you may remember, last quarter, we introduced a service excellence strategy, further extending from the quality expansion and focusing more on product quality and service quality improvements. Thus, for H World, in terms of the network expansion, we will focus more on quality and better services instead of just scale. Therefore, even though we had strong hotel openings in the first quarter, we still maintain our full-year gross opening target unchanged. Thank you. Regarding the B2B business, firstly, if you're mentioning the business travel market, we have to acknowledge that it has been slower in terms of recovery. This is mainly due to impacts from the weaker-than-expected macroeconomic environment since the reopening last year. However, over the last 2 years, we have put a lot of effort into B2B direct sales and capturing new demand and new scenarios, such as MICE and conferences, which we were not very good at previously. We have been continuously improving our capability in this area and trying to acquire as many new customers as possible through our enhanced B2B sales capability. Secondly, we focused on hotel-centric, on-the-ground sales capability enhancement. We will utilize the hotel itself as an offline channel to attract more and more local, small business clients to cope with the volatility in the business travel market.

My first question is on the store opening and we see actually accelerated expansion in the first quarter. How does the management view the supply in the industry as a whole? Also, what's the background for the new franchisees, and what could be the mix of the new franchisees versus the existing franchisees? A little bit more color would be very helpful. My second question is about expense. We observed that selling expenses increased significantly in the first quarter. As CFO just explained during the presentation, how does management project the full year expense trend? And what could be the margin trend for 2024?

Okay. Let me address your first question. Over the last several years, the churn ratio in China has been improving rapidly, exceeding 40% at the end of last year. We believe that churn ratio improvement will accelerate in the future due to the digitalization of capabilities, and integration of industrial capabilities in China is outstanding. It has the potential to surpass even the mature U.S. market in the near future. Many Chinese hotel groups have been benefiting from this trend and the continuous generational improvement. However, we see differences among segments. For example, the middle scale is improving the churn ratio much faster than the entire market. But in economics, there is still a need for further operational efficiency improvements to catch up. Regarding the background of the franchisees, it is quite diversified at this moment. We focus on two aspects. One is our older franchisees; we also focus on improving their profitability. Whenever they open an old hotel, they used to open alongside new hotels. At the same time, while penetrating lower-tier cities and new markets, we are seeing numerous new types of franchisees, for example, from local governments and property developers. Therefore, from H World's perspective, we take care of both groups of franchisees. Thank you.

Okay. In terms of the increase in sales and marketing expenses in the quarter, firstly, we are penetrating into new markets and enhanced segments, and we are introducing many new products. When we open a new hotel in new markets, at the very initial period, we need the resources and support from OTA. However, that should have a temporary impact because, from a long-term perspective, we will continue focusing on our direct sales capabilities through our own channels. Secondly, we have purposely added some budget on marketing expenses, especially for some new brands and segments that we want to improve brand awareness and recognition for these specific brands in the market to attract more customers and franchisees as well. Thank you.

So thank you, management. I have 2 questions. The first is that we previously mentioned our aim to penetrate more into low-tier cities and regions with low density. So how is the progress? Is there any operating data in these markets you could share with us? My second question is that we also previously mentioned one of our key strategies is to upgrade the supply chain and improve service quality. How's the progress? Are there any indicators that can prove this progress, perhaps such as per room CapEx or RevPAR?

In terms of your first question, I'm happy to let you know that we have been making good progress in penetrating those previously less explored areas, as well as weaker segments. The entire improvements and processes are satisfactory and are meeting management's expectations. In terms of the sales excellence we mentioned last quarter, previously, H World used high efficiency, low cost, and scale to maintain its leading position. But in the future, if we want to enhance or strengthen our leading positions in China or even the world, we need to focus on more service, more user experiences, and enhancing customer-centric management capabilities. Several examples include focusing on customer satisfaction rates to verify improvement, with more details to be shared in the near future. Thank you.

Thank you, everyone, for taking your time with us today, and we look forward to seeing you in the upcoming quarter. Thank you and bye-bye.

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