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.

[Foreign Language] Thank you, Alison. Hello, everyone, and thank you for joining Atour's fourth quarter and full year 2023 earnings call today. [Foreign Language] 2023 was an exceptional year for Atour where we unveiled our strategic vision for expanding our portfolio to 2,000 premier hotels nationwide by 2025 and establishing the Chinese experience as the industry benchmark. Throughout the year, we worked diligently to enhance digitalization, organization and corporate culture, as well as our management and operations capabilities, which have become the pillars of our sustainable growth as an experienced proven business. Today, our signature Chinese experience is resonating deeply with people revoking a profound collective response. Moreover, we have achieved significant milestones in our hotel network expansion. In 2023, we opened a total of 289 new hotels and signed additional 576 projects surpassing the targets we set at the beginning of the year and laying a solid foundation for our goal of our 2,000 premier hotels by 2025. [Foreign Language] 2024 is poised to be a year of innovation and breakthroughs as we build on this success. To advance our Chinese experience strategy, we will remain dedicated to providing our customers with multi-faceted services and exceptional experiences that go beyond accommodation. First, we will promote greater awareness of our cultural inviting and interesting experiences. Cultivating lasting bonds with our discerning customers. Second, we aim to establish a virtual cycle fostering seamless customer crossover between retail and accommodation to bring our unique deep sleep experience to all of our members. Finally, we will continue to advance digitalization empowering experiential upgrades and elevating the Chinese experience to new heights. In terms of our network expansion strategy, we will continue to solidify Atour’s leading position in the upper mid-scale market, while expanding Atour’s brand awareness in the middle scale market and establish…

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 RMB1,505 million. Net revenues for the full year of 2023 increased by 106.2% year-over-year to RMB4,666 million. The strong increases was driven by the robust growth in both hotel and retail business. Revenue from our manachised hotels for the fourth quarter were RMB851 million, up by 133.3% year-over-year and 9.0% quarter-over-quarter. For full year 2023, revenue from our manachised hotels increased by 98.8% year-over year to RMB2,706 million. The being increases were primarily fueled by the ongoing expansion of our hotel networks and the increase in RevPAR. The total number of manachised 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 RMB353 million and RMB371 for the fourth quarter and the full year of 2023 respectively. Revenues contributed by our leased hotels for the fourth quarter were RMB195 million, representing an increase of 40.4% year-over-year and a decrease of 18.1% and a decrease of 18.1% quarter-over-quarter. For full year of 2023, revenues from our leased hotels increased by 51.9% year-over-year to RMB880 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 RMB412 million. For full year 2023, revenue was from our retail business increased by 283.2% year-over-year to RMB972…

[Operator Instructions] We will take our first question. Your first question comes from the line of Lydia Ling from Citi. Please go ahead. Your line is open.

[Foreign Language] Hi, management. This is Lydia from Citi. So congratulations on the results. And so my question is mainly focused on the growth outlook for 2024 and so basically first is underlying the hotel opening plan and we saw actually further growth in the - in fourth quarter. So what would be your spot opening plan for this year? And the second part is on the RevPAR trend which actually lies a little above last year. So, what is your latest expectations for RevPAR trend for this year and also your revenue guidance? And if any color on the fourth quarter trend that would be very helpful and as the Timmy and the Liberty Holiday is approaching so what it will be your expectation on the RevPAR performance for these two holidays? And lastly, is on the margin trend and so what would be your latest guidance and looking into the 2024 and we some actual increase in the light access ratio in the fourth quarter. So what would be your expectation for the like 2024? Thank you.

[Foreign Language] Thanks, Lydia. Let me answer your question on the new openings. In 2023, we opened 289 new hotels and the total number of hotels in operation by the end of the year was 1,210 and that was a 30% increase and we aim to keep that growth rate as well in this year. So this year, our target for new openings would reach 360. And among those 360, about 200 to 220 will be Atour hotels, while 60 to 80 will be Atour Light hotels. And all of this would help us to march towards the 2,000 premier hotels by the year of 2025 and that 2025 and that is our goal. [Foreign Language] Okay. Now Lydia, let me try that answer your second and the third question. First to regarding the development trend of RevPAR, well from the perspective of RevPAR structure, this year we will maintain a 30% growth rate of new hotel openings. As those new hotels will account for a relatively higher proportion than those of our peers, meanwhile the expansion momentum of our mid-scale offering Atour Light was strong. And that means with more Atour Light hotels to open. They may have a certain impact on our overall RevPAR and considering what we already have from tier-ones data and taking some uncertainties in the external environment into account, overall we hold a cautiously optimistic attitude for this year's RevPAR growth. We aim to match last year's RevPAR levels. [Foreign Language] And as for the Timmy and - first holidays, looking from the reservation data we have we've seen very active traffics and obviously, they are going to turn out to be pretty nice results for those two holidays. [Foreign Language] And also let me try to update our revenue guidance a little bit as well. As in revenue with the rapid development of both our accommodation and the retail business, we expect the 2024’s full year revenue to grow by around 30%. [Foreign Language] One more note on revenue, that 30% growth will be a leading growth across the industry. And as for profit, we have to confidence to improve it in each of our business segments, along with our cost of structural optimizations and the increase of management and operation efficiency. However, our overall profit margin may be subjective to changes in the contribution of each revenue streams. We do expect our profit margin to continue with the trend of the relatively stable and moderate growth. Thank you.

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

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

[Foreign Language] I’ll translate my question to English. Thank you management. We have talked about the new opening. I have a follow-up question on the new signing. So, what's the target of the new signing this year? And what's the progress in Q1? And there is the obvious change in the franchisees’ confidence and interest since this year. Thank you.

[Foreign Language] Thank you, Sijie for your question. As for new signings we signed 576 projects in the full year of 2023, which was an outstanding performance. And now entering Q1 2024, we have maintained that strong momentum on signings overall. And as we see it 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 are to be attracted into Atour’s system for searching.

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

Thank you. We will take our next question. Your next question comes from the line of [Indiscernible] from Morgan Stanley. Please go ahead. Your line is open.

[Foreign Language] My question is about scenario-based retail business? you reported a very exceptional performance last year. I would like to ask about the management’s 2024 strategic plan on this segment, especially on your product plans and also any rough revenue guidance contribute to the total revenues 30% year-over-year growth revenue guidance? Thank you.

[Foreign Language] Well, thank you Dan for your question. Retail business is our second growth driver has achieved an outstanding result in 2023 with the full year revenue of RMB970 million accounting for 20.8% of our total revenue. In 2024, we will continue to drive with the healthy growth of retail business and to keep on strengthening the building of our basic capacity to further focus on the brand and our products. [Foreign Language] And in terms of branding, we do have the plan to focus on Atour Planet and our deep sleep products. We will consistently improve our R&D capability for retail products to further tap into the deep sleep categories. In 2023 we availed of the momentum from three pillow products with RMB100 million sales each, successfully launched our deep sleep Temperature Control Quilt, which had won the consumers favor and very decent sales. In this year's March 21st, I mean 2024’s March 21st, on the World Sleep Day, we launched yet another new product The Atour Planet Deep Sleep Summer Cool Quilt as a continuous expansion of our product portfolio. [Foreign Language] At the same time, we will also continue to strengthen the combination of retail business and our combination of scenarios to place more deep sleep products into our Atour Hotels this year to create an immersive deep sleep experience scenario for our consumers and to keep on strengthening the mind share of Atour deep sleep experience. [Foreign Language] And you probably have noticed that beginning with this latest financial report, we started to disclose information of the retail business as an independent business unit. We also plan to enhance the fundamental capabilities in retail including capabilities in organization, R&D, data infrastructure, channels, et cetera. We try to build a solid foundation for our longer term static growth. Since the beginning of 2024, our retail business continued its positive momentum. And we do expect 2024 full year retail revenue to grow more than 50% reaching RMB1.45 billion. [Foreign Language] Thank you.

Thank you, Dan. Let's have 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.

[Foreign Language] This is Xin Chen from UBS. I have two questions. Now firstly from that - I have noticed about the expected tax rate has decreased significantly in the fourth quarter may I know the main reason? The second question is about the company’s plan on the use of cash. Is the company considering about a dividend payout or share buyback to increase the shareholder retention? Thanks.

[Foreign Language] Well, thank you Mr. Chen. As for the taxation question, we do have an entity which enjoyed preferential tax policies in 2023 and there was a one-off tax exemption in the fourth quarter. [Foreign Language] As for your second question on cash utilization, well, thanks to our robust business growth and our asset light mode, the Group’s cash flow maintained healthy growth. On December the 31st last year, our Group’s net cash and short-term investment at banks reached a total of RMB3.5 billion. [Foreign Language] And in this year, we will thoroughly consider various means and different ways of rewarding the shareholders such as dividend payout, share buybacks, et cetera to continuously enhance the efficiency of our cash utilization. Thank you.

Thank you. And we can take one more question.

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

[Foreign Language] Thanks for the opportunity to raise my question. This is Candice Tsang[Ph] from Bank of America. My questions are specifically Atour Light was going zero. Management has just shared hotel opening target for 2024 would you have any goals for you signings of Atour Light 3.0 in this year? And how the performance and operator status of those open hotels? Lastly, can management share your views on the competitive landscape of the mid-scale hotel segment overall? Thank you.

[Foreign Language] Well, thank you, Candice. Atour Light 3.0 is our mid-scale offering targeting young business travelers and it has been quite popular with the franchisees since it’s launched in February last year evidenced by more than 90 new signings in 2023. [Foreign Language] Atour Light 3.0 focus is on core business districts in higher tier cities aiming to set benchmarks for the quality in the mid-scale hotel segment. And by now, we had Atour Light 3.0 hotels opened in 21 cities including Shanghai, Guangzhou, Shenzhen all with quite decent operational performance. For instance, the average RevPAR for our exemplary hotel, the Atour Light Hotel at Guangzhou, Guangzhou Exhibition Canton Tower Subway Station since its opening in the November last year it has exceeded RMB600 its RevPAR far exceeding the performance of the surrounding competitors. [Foreign Language] And regarding your second question on the competition in the mid-scale market, we believe that the scale of this market has been verified already. It’s with Atour Light 3.0’s design catering to the aesthetic view of the young people and the consistent service experience we offer, it can well match the young business travelers’ needs for high quality accommodation experience and it has been successfully recognized by the consumers. [Foreign Language] And as I previously said, the operation performance of Atour Light 3.0 hotels are very competitive in their business districts. And at the advantage in the cycle of return on investment is quite obvious. We believe that with its powerful competitiveness and the extensive market recognition, Atour Light is poised to become our second brand within Atour Group to hit the scale of 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 IR 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.