H World Group Ltd 6-K, filed Sep 28, 2023

H World Group Ltd (HTHT)

6-K 2023-09-28 For: 2023-06-30

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Added on April 11, 2026

About this 6-K

H World Group Ltd filed this 6-K on September 28, 2023.

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Exhibit Number		Description
Exhibit 99.1		Unaudited Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2022 and 2023
101.INS		Inline XBRL Taxonomy Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

		H World Group Limited
		(Registrant)


Date: September 28, 2023	By:	/s/ Qi Ji
	Name:	Qi Ji
	Title:	Executive Chairman of the Board of Directors


Unaudited Interim Condensed Consolidated Balance Sheets as of December 31, 2022 and June 30, 2023		F-2

Unaudited Interim Condensed Consolidated Statements of Comprehensive Income for the Six Months Ended June 30, 2022 and 2023		F-3

Unaudited Interim Condensed Consolidated Statements of Changes in Equity for the Six Months Ended June 30, 2022 and 2023		F-4

Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2023		F-5

Notes to the Unaudited Interim Condensed Consolidated Financial Statements		F-6


	As of
	December 31, 2022	June 30, 2023	June 30, 2023
			US$’ in million
			(Note 2)
ASSETS
Current assets:
Cash and cash equivalents	3,583	7,316	1,009
Restricted cash	1,503	520	72
Short-term investments	1,788	749	103
Accounts receivable, net of allowance of RMB101 and RMB126 as of December 31, 2022 and June 30, 2023 respectively	1,113	933	129
Loan receivables - current, net of allowance of RMB52 and RMB51 as of December 31, 2022 and June 30, 2023 respectively	134	126	17
Amounts due from related parties, net of allowance of RMB38 and RMB53 as of December 31, 2022 and June 30, 2023 respectively	178	131	18
Inventories	70	65	9
Other current assets, net of allowance of RMB8 and RMB8 as of December 31, 2022 and June 30, 2023 respectively	809	725	100
Total current assets	9,178	10,565	1,457
Property and equipment, net	6,784	6,403	883
Intangible assets, net	5,278	5,475	755
Operating lease right-of-use assets	28,970	28,865	3,981
Finance lease right-of-use assets	2,047	2,187	302
Land use rights, net	199	195	27
Long-term investments	1,945	2,199	303
Goodwill	5,195	5,327	735
Amounts due from related parties, net of RMB0 and RMB0 as of December 31, 2022 and June 30, 2023 respectively	6	16	2
Loan receivables, net of RMB3 and RMB3 as of December 31, 2022 and June 30, 2023 respectively	124	134	18
Other assets, net of allowance of RMB1 and RMB1 as of December 31, 2022 and June 30, 2023 respectively	688	664	91
Deferred income tax assets	1,093	1,082	149
Total assets	61,507	63,112	8,703

LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	3,288	4,765	657
Accounts payable	1,171	935	129
Amounts due to related parties	71	89	12
Salary and welfare payables	657	708	98
Deferred revenue	1,308	1,413	195
Operating lease liabilities, current	3,773	3,832	528
Finance lease liabilities, current	41	49	7
Accrued expenses and other current liabilities	2,337	3,336	460
Income tax payable	500	618	85
Total current liabilities	13,146	15,745	2,171

Long-term debt	6,635	1,065	147
Operating lease liabilities, non-current	27,637	27,520	3,795
Finance lease liabilities, non-current	2,513	2,703	373
Deferred revenue	828	936	129
Other long-term liabilities	977	1,057	146
Retirement benefit obligations	110	116	16
Deferred income tax liabilities	858	868	120
Total liabilities	52,704	50,010	6,897
Commitments and contingencies (Note 17)
Equity:
Ordinary shares (US$0.00001 par value per share; 80,000,000,000 shares authorized; 3,265,433,590 and 3,340,760,130 shares issued as of December 31, 2022 and June 30, 2023, 3,112,413,730 and 3,187,740,270 shares outstanding as of December 31, 2022 and June 30, 2023, respectively)	0	0	0
Treasury shares (153,019,860 and 153,019,860 shares as of December 31, 2022 and June 30, 2023, respectively)	(441)	(441)	(61)
Additional paid-in capital	10,138	12,163	1,677
Retained earnings	(1,200)	805	111
Accumulated other comprehensive income	232	474	65
Total H World Group Limited shareholders’ equity	8,729	13,001	1,792
Noncontrolling interest	74	101	14
Total equity	8,803	13,102	1,806
Total liabilities and equity	61,507	63,112	8,703


	Six Months Ended June 30,
	2022	2023	2023
			US$’ in million
			(Note 2)
Revenues:
Leased and owned hotels	4,003	6,466	892
Manachised and franchised hotels	1,934	3,410	470
Others	126	134	18
Total revenues	6,063	10,010	1,380
Operating costs and expenses:
Hotel operating costs	5,785	6,732	929
Other operating costs	26	17	2
Selling and marketing expenses	264	457	63
General and administrative expenses	830	902	124
Pre-opening expenses	57	21	3
Total operating costs and expenses	6,962	8,129	1,121
Other operating income, net	199	168	22
(Loss) income from operations	(700)	2,049	281
Interest income	37	101	14
Interest expense	199	224	31
Other income, net	88	546	75
Losses from fair value changes of equity securities, net	(186)	(6)	(1)
Foreign exchange (loss) gain, net	(463)	99	15
(Loss) income before income taxes	(1,423)	2,565	353
Income tax (benefit) expense	(430)	502	69
Loss from equity method investments	(19)	(27)	(4)
Net (loss) income	(1,012)	2,036	280
Less: net (loss) income attributable to noncontrolling interest	(32)	31	4
Net (loss) income attributable to H World Group Limited	(980)	2,005	276

Other comprehensive (loss) income
(Loss) gain arising from defined benefit plan, net of tax of RMB0 and nil for the six months ended June 30, 2022 and 2023, respectively	(0)	—	—
Gains from fair value changes of debt securities, net of tax of nil and RMB 7 for the six months ended June 30, 2022 and 2023, respectively	—	20	3
Foreign currency translation adjustments, net of tax of nil for the six months ended June 30, 2022 and 2023, respectively	22	222	31
Comprehensive (loss) income	(990)	2,278	314
Less: comprehensive (loss) income attributable to the noncontrolling interest	(32)	31	4
Comprehensive (loss) income attributable to H World Group Limited	(958)	2,247	310

(Losses) Earnings per share:
Basic	(0.31)	0.63	0.09
Diluted	(0.31)	0.62	0.09
Weighted average number of shares used in computation:
Basic	3,113,771,581	3,180,817,047	3,180,817,047
Diluted	3,113,771,581	3,349,256,828	3,349,256,828



	Ordinary Shares		Treasury Shares				Accumulated Other
	Outstanding				Additional Paid-in		Comprehensive	Noncontrolling
	shares	Amount	Shares	Amount	Capital	Retained Earnings	Income	Interest	Total Equity
Balance at January 1, 2022	3,120,746,090	0	30,974,040	(107)	9,964	1,037	41	109	11,044
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks	4,158,430	0	—	—	—	—	—	—	0
Share-based compensation	—	—	—	—	48	—	—	—	48
Net loss	—	—	—	—	—	(980)	—	(32)	(1,012)
Dividends paid to noncontrolling interest holders	—	—	—	—	—	—	—	(0)	(0)
Acquisition of noncontrolling interest	—	—	—	—	0	—	—	(2)	(2)
Foreign currency translation adjustments	—	—	—	—	—	—	22	—	22
Repurchase of ordinary shares	(17,794,700)	—	17,794,700	(334)	—	—	—	—	(334)
Cash dividends declared	—	—	—	—	—	(416)	—	—	(416)
Termination of Capped Call	—	—	—	—	86	—	—	—	86
Noncontrolling interest recognized in connection with acquisitions	—	—	—	—	—	—	—	1	1
Income arising from defined benefit plan, net of tax	—	—	—	—	—	—	(0)	—	(0)
Balance at June 30, 2022	3,107,109,820	0	48,768,740	(441)	10,098	(359)	63	76	9,437

Balance at January 1, 2023	3,112,413,730	0	153,019,860	(441)	10,138	(1,200)	232	74	8,803
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks	4,141,540	0	—	—	0	—	—	—	0
Share-based compensation	—	—	—	—	61	—	—	—	61
Net income	—	—	—	—	—	2,005	—	31	2,036
Dividends paid to noncontrolling interest holders	—	—	—	—	—	—	—	(1)	(1)
Issuance of ordinary shares¹	71,185,000	0	—	—	1,963	—	—	—	1,963
Acquisition of noncontrolling interest	—	—	—	—	1	—	—	(3)	(2)
Gains(losses) from fair value changes of debt securities, net of tax	—	—	—	—	—	—	20	—	20
Foreign currency translation adjustments	—	—	—	—	—	—	222	—	222
Balance at June 30, 2023	3,187,740,270	0	153,019,860	(441)	12,163	805	474	101	13,102

Franchise or manachise agreements		Remaining contract terms from 10 to 20 years
Non-compete agreements		2 - 10 years based on specified non-compete period
Purchased software		3 - 10 years based on the estimated usage period
Other intangible assets including trademark, licenses and other rights		2 - 15 years based on the contractual term, the length of license agreements and the effective terms of other legal rights


As of December 31, 2022	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active		Significant
	Markets for Identical	Significant Other	Unobservable
	Assets	Observable Inputs	Inputs
Description	(Level 1)	(Level 2)	(Level 3)
Equity securities with readily determinable fair value	1,788	—	—
Available-for-sale debt securities	—	—	296
Employee benefit plan assets	13	—	—


As of June 30, 2023	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active		Significant
	Markets for Identical	Significant Other	Unobservable
	Assets	Observable Inputs	Inputs
Description	(Level 1)	(Level 2)	(Level 3)
Equity securities with readily determinable fair value	83	—	—
Available-for-sale debt securities	—	—	323
Employee benefit plan assets	14	—	—


	Six Months Ended
	June 30,
	2022	2023
Room revenues	3,271	5,507
Food and beverage revenues	467	635
Others	265	324
Leased and owned hotels revenue	4,003	6,466
Initial one-time license/franchise fee	52	54
On-going management and service/royalty fees	592	1,232
Central reservation system usage fees, other system maintenance and support fees	522	1,152
Reimbursements for hotel manager fees	533	600
Other fees	235	372
Manachised and franchised hotels revenue	1,934	3,410
Other revenues	126	134
Total revenues	6,063	10,010


	As of
	December 31,	June 30,
	2022	2023
Current contract liabilities	1,308	1,413
Long-term contract liabilities	828	936
Total contract liabilities	2,136	2,349


		Amortization for
		Intangible Assets
Remainder of 2023		19
2024		33
2025		33
2026		31
2027		26
Thereafter		158
Total		300


		Principle Amounts
Remainder of 2023		579
2024		4,292
2025		766
2026		47
2027		40
Thereafter		120
Total		5,844


	2023
Suboptimal exercise factor	2.80
Risk-free interest rate	3.61	%
Volatility	49.31	%
Dividend yield	0.80	%
Life of option	10	years


			Weighted Average
	Number of	Weighted Average	Remaining	Aggregate Intrinsic
	Options	Exercise Price	Contractual Life	Value
		US$	Years	US$’million
Share options outstanding at January 1, 2023	—
Granted	28,625,350	2.80
Share options outstanding at June 30, 2023	28,625,350	2.80	9.98	31
Share options vested or expected to vest at June 30, 2023	26,524,250	2.80	9.98	29
Share options exercisable at June 30, 2023	—


	As of
	December 31,	June 30,
	2022	2023
Cost:
Buildings	843	843
Leasehold improvements	10,952	10,998
Furniture, fixtures and equipment	2,520	2,608
Motor vehicles	3	3
	14,318	14,452
Less: Accumulated depreciation	7,727	8,279
	6,591	6,173
Construction in progress	193	230
Property and equipment, net	6,784	6,403


	As of
	December 31, 2022	June 30, 2023
Short-term investments
Equity securities with readily determinable fair values:
Accor	1,701	—
Other marketable securities	87	83
Subtotal	1,788	83
Held to Maturity investments
Time deposits	—	666
Total	1,788	749

Long-term investments
Equity securities without readily determinable fair values:
Cjia Group-preferred shares	138	112
OYO	54	54
Other equity securities without readily determinable fair values	65	63
Subtotal	257	229
Equity-method investments:
AAPC LUB	494	458
Hotel related funds	443	422
China Hospitality JV	67	68
Zleep	70	68
Commerz Real Institute	80	85
Other investments	238	244
Subtotal	1,392	1,345
Available-for-sale debt securities:
Cjia Group-convertible notes	296	323
Held to Maturity investments
Time deposits	—	302
Total	1,945	2,199


	Six Months Ended
	June 30,
	2022	2023
Rents	2,038	2,139
Utilities	278	341
Personnel costs	1,737	2,167
Depreciation and amortization	712	678
Consumable, food and beverage	451	613
Others	569	794
Total	5,785	6,732


		Weighted
	Number of	Average Grant
	Restricted Stocks	Date Fair Value
		US$
Nonvested restricted stocks outstanding at January 1, 2023	76,939,150	1.88
Granted	29,620,310	3.67
Forfeited	(596,410)	2.60
Vested	(4,141,540)	1.54
Nonvested restricted stocks outstanding at June 30, 2023	101,821,510	2.41


Revenues:	Six Months Ended June 30,
	2022	2023
China	4,727	7,927
Germany	989	1,532
All others	347	551
Total	6,063	10,010


	Total
	Operating	Total Finance
	Leases	Leases
Remainder of 2023	2,211	75
2024	4,309	158
2025	4,106	157
2026	3,917	159
2027	3,734	162
Thereafter	26,652	3,967

Total minimum lease payments	44,929	4,678

Less: amount representing interest	13,577	1,926

Present value of minimum lease payments	31,352	2,752


Related Party	Nature of the Party	Relationship with the Group
Trip.com Group Limited (“Trip.com”)	Online travel services provider	Mr. Qi Ji is a director
Sheen Star Group Limited (“Sheen Star”)	Investment holding company	Equity method investee of the Group, controlled by Mr. Qi Ji
China Cjia Group Limited (“Cjia Group”)	Apartment Management Group	Equity method investee of the Group
Shanghai Zhuchuang Enterprise Management Co., Ltd. (“Zhuchuang”)	Staged office space company	Equity method investee of the Group
Shanghai Lianquan Hotel Management Co., Ltd. (“Lianquan”)	Hotel management company	Equity method investee of the Group
AZURE Hospitality Fund I Limited Partnership ( “AZURE”)	Fund	Equity method investee of the Group