Atour (ATAT) Q3 2025 Earnings Call Transcript

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DATE

Tuesday, November 25, 2025 at 7 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Wang Haijun
• Co-Chief Financial Officer — Wu Jianfeng
• Executive — Lydia Lin

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TAKEAWAYS

• RevPAR -- RMB 371.3, representing 97.8% of the prior year's level.
• Occupancy Rate (OCC) -- 99.9% of last year's period; ADR -- 98.1% of last year's period.
• Mature Hotels RevPAR -- 95% of the previous year's period; OCC at 98.5% and ADR at 96.6% for hotels operating more than eight months.
• Hotel Openings -- 152 new hotels opened, setting a single-quarter record; total operational hotels reached 1,948, marking a 27.1% increase year-over-year.
• Hotel Pipeline -- 754 hotels under development as of period end, with project selection governed by strict quality parameters.
• Atour Series 4 RevPAR -- Surpassed RMB 500 for hotels in operation over three months, showing product line performance at the high end.
• Sakher Hotel Segment -- The two operating upscale hotels posted RevPAR above RMB 900 with the third location in Guangzhou opening during November.
• Retail GMV -- RMB 994 million, up 75.5% year-over-year; more than 90% of GMV generated via online channels.
• Deep Sleep Memory Foam Pillow Pro 3.0 GMV -- Exceeded RMB 100 million within 25 days of launch, outperforming prior product generations by nineteen days.
• Retail Business Cumulative Pillow Unit Sales -- Deep Sleep Pillow Series surpassed eight million units cumulatively since launch.
• DeepSleep Thermal Comforter Cumulative Sales -- Units sold exceeded two million since product line introduction.
• Individual Registered Members -- Membership exceeded 108 million at period end, with growth above 30% year-over-year.
• Core CRS Channel Room Nights -- Accounted for 62.4% of total room nights sold; corporate clients contributed 20% of room nights.
• Net Revenues -- RMB 2,628 million, up 38.4% year-over-year and increasing 6.5% quarter-over-quarter.
• Hotel Revenues -- RMB 1,560 million, a 32.3% year-over-year increase primarily due to network expansion, and a 20.1% sequential quarterly rise mainly driven by growth in RevPAR and supply chain business.
• Retail Revenues -- RMB 846 million, demonstrating 76.4% year-over-year growth but falling 12.3% sequentially due to seasonality.
• Hotel Opening Cost -- RMB 1,082 million, up 23.5% year-over-year and 21.1% sequentially, led by higher variable and manager costs.
• Gross Margin - Hotels -- Expanded to 37.3% from 36% in prior year, tied to product mix optimization.
• Adjusted Net Income -- Adjusted net income was RMB 488 million, a 27% increase year-over-year, with adjusted net profit margin at 18.6%.
• Adjusted EBITDA -- Adjusted EBITDA was RMB 685 million, up 28.7% year-over-year; adjusted EBITDA margin at 26.1%.
• Cash and Cash Equivalents -- RMB 2,670 million as of September 13, 2025; net cash position at RMB 2,603 million.
• Dividend Declared -- Second cash dividend for the year totals USD 50 million; share repurchase program initiated and "targeting a payout ratio of 100% based upon the previous fiscal year's GAAP net income."
• Full-Year Revenue Guidance Raised -- Management projects net revenues to increase 35% for full-year 2025, up from prior forecasts.
• Full-Year Retail Revenue Growth Outlook Raised -- Now targeting at least 65% year-over-year growth, per management's update.
• Store Closures -- 28 hotels closed in the period; about 80 total closures expected for the year as part of proactive operational quality control.
• Atour Lite Scale Target -- Operated hotels in this segment targeted at 170-180 by year-end, with a longer-term goal of 1,000 hotels in this brand.

SUMMARY

Management reported that the record number of hotel openings and a 27.1% year-over-year increase in operational hotels led to sharp growth in top-line revenue. The retail business sustained rapid expansion with RMB 994 million GMV and lifted full-year revenue guidance for the segment to at least 65% year-over-year growth. A second USD 50 million dividend and initiation of buybacks underscored ongoing capital returns. Management raised full-year total net revenue growth guidance to 35% and confirmed that active pipeline management and disciplined quality controls will remain central to near-term execution.

• Wu Jianfeng said, "the total number of new hotel signings this year is generally in line with last year," indicating stability in expansion pace, while highlighting active clearing of underperforming projects.
• Wu Jianfeng stated, "We have full confidence in achieving the full year guidance of 500 new openings and reaching our strategic target Wu Jianfeng: of 2,000 premier hotels by the end of this year."
• The "AtourPlanet Deep Sleep Standard" was launched, focusing on sensory science and product differentiation, which management claims will "serve as the core criteria for product iteration" going forward.
• Sakher Hotel's RevPAR exceeded RMB 900, providing validation of brand traction in the upper scale segment and reinforcing premium offering momentum.

INDUSTRY GLOSSARY

• RevPAR: Revenue per available room, a key performance measure combining room occupancy and average rate.
• OCC: Occupancy rate, indicating the proportion of available rooms occupied in the period.
• ADR: Average daily rate, denoting average revenue earned per occupied room.
• GMV: Gross merchandise value, the total value of goods sold via the company's retail platforms within a period.
• CRS: Central reservations system, used for direct booking and distribution of room nights.

Full Conference Call Transcript

Thank you, Luke. Hello, everyone. Thank you for joining Atur's third quarter twenty five earnings call today. Amidst the ongoing volatility in the macro environment, consumers have shown a clear shift toward prioritizing value and making more rational purchasing decisions. Innovative experiences emerging from new scenarios and business models have become a key force driving the release of consumption potential. For the hotel sector, the overall market has shown a moderate recovery since the third quarter. While travel and leisure demand continues to be robust, the industry is also characterized by rapidly shifting hotspots

Wu Jianfeng: and uneven recovery across regions.

Wang Haijun: In the retail market, consumption is increasingly centered around experiential offerings and quality of life upgrades. Evolving consumer habits coupled with technological advancements, are jointly fueling development across various segments. As a leading lifestyle group,

Wu Jianfeng: Atur keenly observes the evolution of user needs

Wang Haijun: and captures consumption trends with precision. Through continuous innovation and enhanced experience in both our hotel and retail businesses, We consistently respond to and lead contemporary consumers' pursuit of quality living. Now I would like to provide more details on our performance for the 2025. Let's begin with our hotel business. Please turn to Slide four of our third quarter twenty five results presentation.

Wu Jianfeng: In the third quarter, our RevPAR was RMB371.3. Representing 97.8% of its level in the same

Wang Haijun: period of 2024. Specifically, OCC nearly recovered to the prior year level at 99.9% of the same period in 2024. And ADR reached 98.1% of its level in the same period of 2024.

Wu Jianfeng: Please turn to Slide five.

Wang Haijun: In the third quarter, RevPAR for our mature hotels in operation for more than eight months.

Wu Jianfeng: Was 95% of the level in the same period of 2024. While OCC and ADR stood

Wang Haijun: at 98.596.6% of their levels

Wu Jianfeng: in the same period of 2024, respectively. Please turn to Slide six. Driven by our brand power and product excellence, Atour's hotel network steadily expanded

Wang Haijun: with the successful launch of various high quality projects. The third quarter, we opened 152 new hotels,

Wu Jianfeng: a record high for a single quarter. By the end of the third quarter, we had a total of 1,948 hotels in operation

Wang Haijun: representing a 27.1% year over year increase. We have full confidence in achieving our strategic target of the 2,000 premier hotels by year end. Laying a solid foundation for the next phase of our journey.

Wu Jianfeng: As of the end of the third quarter,

Wang Haijun: our pipeline of hotels under development remained steady at 754. Amid our rapid expansion, we remain steadfast in our quality first principle. By applying rigorous project selection criteria and strict quality standards, we are driving healthy and sustainable high quality growth. Next, I would like to share the latest developments for our hotel brands. Please turn to Slide seven. Within our upper mid scale product portfolio, ATURE 3.6 represents a new benchmark for ATURE series three hotels. To date, we have opened 19 3.6 hotels which continue to gain market recognition and acclaim. Through meticulous attention to detail and optimize the scenario design, ATOR 3.6 seamlessly integrates functional amenities. Premium service and humane ambience.

It effectively addresses the core needs of guests for efficiency and comfort. Offering a new, more refined choice for travel experiences.

Wu Jianfeng: Please turn to Slide eight.

Wang Haijun: Grounded in a forward looking understanding of consumers' long term needs, Atour Series four has received a strong market recognition reaffirming its precise product positioning. In the third quarter, the RevPAR of the tour of four point zero hotels in operation for more than three months surpassed RMB 500.

Wu Jianfeng: While delivering both functional utility and emotional value.

Wang Haijun: Atour four point zero hotels place greater emphasis on fostering a deep resonance with guests.

Wu Jianfeng: Creating a healing experience that promotes holistic well-being.

Wang Haijun: The upper mid scale segment has long been our core focus and strategic foundation. By leveraging the synergistic deployment of ATURE series three and Series four, we effectively serve the diverse needs of different customer groups. As Ator products continue to penetrate core business districts

Wu Jianfeng: across cities, we will further solidify our competitive moat

Wang Haijun: and a leading position in the upper midscale market. Please turn to Slide nine. Sakhre Hotel represents a significant breakthrough for us in the upper scale lifestyle segment.

Wu Jianfeng: In the third quarter, the two operating hotels demonstrated robust

Wang Haijun: performance. With RevPAR exceeding RMB 900 On November 18, our third Saka Hotel began its soft opening in Guangzhou and has already received positive market feedback. With its unique design style and exceptional accommodation experience, Sakher Hotel continues to attract a diverse clientele, demonstrating its substantial growth potential. Hotel is dedicated to creating rejuvenating journeys for the discerning clientele. Masterfully fusing Eastern cultural heritage with modern aesthetic We are now collaborating with a professional institution to integrate scientific wellness concepts across the guest experience. From customized a healthy diet to carefully curated in room amenities. Building a comprehensive deep experience for guests. And showcase our thoughts and practice of the Chinese experience concept in the upscale segment.

For our expansion strategy, we will continue to adhere to precise site selection. Striving to make every Saka hotel a model of local lifestyle. Please turn to Slide 10. For our midscale brand, we consolidated our differentiated advantages by continuously refining our products improving operational efficiency and enhancing brand building. ATURE Lite continued its strong performance in the third quarter. With REV, the RevPAR of a tour like Series three hotels in operation surpassing year ago levels.

Wu Jianfeng: As the latest upgraded version,

Wang Haijun: Atura Lite 3.3 has seen its first batch of hotels successively open. 3.3 features a more mature model with that incorporates targeted optimizations in practicality and spatial aesthetics. Earning strong acclaim from both users and franchisees.

Wu Jianfeng: At the current stage,

Wang Haijun: Ator Light will continue to concentrate its presence in higher tier cities. Advancing steadily while building brand recognition through benchmark projects. Simultaneously, we are systematically enhancing our operational framework by refining service touch points optimizing operational standards, and strengthening talent development. These efforts ensure premium experiences while consistently driving operational efficiency. Solidifying our competitive edge in the mid scale segment and laying a solid foundation for long term development of Ator light brand. Moving now to our retail business. Please turn to Slide 11. During the third quarter, our retail business sustained strong growth. With GMV reaching RMB $994,000,000, representing a 75.5% year over year increase. Online channels continue to contribute over 90% of total GMV.

During the recently concluded Double Eleven Shopping Festival, Atour Planet has not only delivered its excellent sales momentum, but has also further strengthened the DeepSleep brand image in the mind of users.

Wu Jianfeng: Meanwhile, across both the third quarter and the double eleven period, AtourPlanet also ranked among the top brands in

Wang Haijun: the betting category on major third party platforms.

Wu Jianfeng: Please turn to Slide 12. The outstanding performance of AtorPlanet keeps validating our ability to provide comprehensive sleep solutions in the market. In our core categories,

Wang Haijun: we pursue breakthrough innovation through initiatives like collaborative R and D with academic institutions.

Wu Jianfeng: Consolidating our competitive advantages while gradually expanding market

Wang Haijun: reach.

Wu Jianfeng: Meanwhile,

Wang Haijun: based on in-depth insights into user needs, we are also developing new categories such as deep sleep fitted sheet, and deep sleep loungewear. We finding and enriching the sleep ecosystem of a tour planet.

Wu Jianfeng: Next, I will now walk you through the latest updates on AtorPlanet's course categories.

Wang Haijun: Please turn to Slide 13.

Wu Jianfeng: In the third quarter, Aturo Planet continued to lead the market

Wang Haijun: in the pillow category across major third party platforms. Deep Sleep Memory Foam Pillow Pro three point zero has received glowing reviews for its excellent support and comfort. Since its launch, it has shown strong sales performance. Exceeding RMB one hundred million GMV in just twenty five days, reducing nineteen days compared to the previous generation. Up till now, the cumulative sales volume of the Deep Sleep Pillow Series has exceeded 8,000,000 units since its release. In addition, we've expanded the Pillow portfolio with products like DeepSleep travel pillow, and Deep Sleep Pillow for Children. Gradually building a product portfolio that covers different scenarios,

Wu Jianfeng: and serves various user groups.

Wang Haijun: This expansion demonstrates our execution capabilities in enhancing sleep experiences while reinforcing our category leadership position. Please turn to Slide 14. AturPlanet is leading the transformation of the category driven by the exceptional performance of our deep sleep thermal regulating comforter series. And the seasons change, we launched the two upgraded products in the third quarter. DeepSleep Thermal Regulating Comforter Pro two point o, all season and winter season, both feature an upgraded dual layer temperature control system that dynamically adjust the sleep microenvironment for more stable rest.

Wu Jianfeng: To date, the cumulative sales volume of the DeepSleep thermal regulating comforter series has exceeded 2,000,000 units.

Wang Haijun: Since its launch.

Wu Jianfeng: Please turn to Slide 15. With the launch of new products targeting users' core sensory needs during sleep

Wang Haijun: we officially released the AturPlanet Deep Sleep Standard. Covering the dynamic pressure stabilization factor for the pillow category and the dynamic temperature management factor the comforter category. In the future, this standard will serve as the core criteria for product iteration

Wu Jianfeng: ensuring high quality and consistency of products.

Wang Haijun: The establishment of this standard has also driven us to continuously

Wu Jianfeng: enhance our supply chain capabilities.

Wang Haijun: Further strengthening our competitive advantages

Wu Jianfeng: and the technical barriers in the sleep field. Our goal with this is to elevate industry standards

Wang Haijun: and make natural deep sleep an experience that every user can truly perceive and

Wu Jianfeng: achieve.

Wang Haijun: In the current market where imitators and followers are immersion, AtourPlanet remains committed to its founding aspiration, dedicated to listen to users' genuine needs and refining product details. Our deep understanding and agile responsiveness to user needs have become a solid moat.

Wu Jianfeng: Supporting long term brand development.

Wang Haijun: In the meantime, we'll keep strengthening our foundational capabilities We'll pursue excellence in product development supply chain management, and quality control to solidify a strong foundation for healthy growth. Looking to the future,

Wu Jianfeng: we are ready to work with our industry partner to move forward together and guide China's sleep industry to a new stage of higher quality development.

Wang Haijun: Please turn to Slide 16. Last but not least,

Wu Jianfeng: I would like to share our progress across our membership business,

Wang Haijun: channel development.

Wu Jianfeng: With our growing brand influence and the continuous

Wang Haijun: enrichment of our membership benefit system, Our membership base maintained a robust growth. By the end of the third quarter, the number of registered individual members exceeded 108,000,000.

Wu Jianfeng: Representing a year over year growth of over 30% In terms of channel development, our core CRS channel remained stable accounting for 62.4% of the total room night sold in the third quarter. The contribution of room nights sold to corporate members was 20% during the quarter.

Wang Haijun: Please turn to Slide 17. The evolution of the a card system and the upgrade of membership benefits stem from our deep understanding of members' genuine needs. By integrating online and offline resources, we've created multi scenario end to end service experiences that continuously explore innovative possibilities in quality living. Looking ahead, we will sharpen ACAR's brand positioning.

Wu Jianfeng: With a focus on a complete customer life cycle we will analyze consumption patterns across accommodation and retail scenarios among different user groups, expanding lifestyle experiences and introducing compelling benefits and activities to deepen emotional connection with our members.

Wang Haijun: Please turn to Slide 18. Moving forward, we will continue to deepen our focus across three key areas. Of user, employee and fundamental capabilities. As for our users,

Wu Jianfeng: we will always adhere to the user first philosophy.

Wang Haijun: Embedding it across all touch points of our hotel and retail business.

Wu Jianfeng: Will continuously enhance users' experiences

Wang Haijun: and deepen our emotional connection with them.

Wu Jianfeng: For our employees,

Wang Haijun: pay close attention to their growth trajectories and accumulated experience. Through diversified mechanisms we redefine traditional industry promotion and development path. Driving continuous organizational evolution. To strengthen our foundational capabilities we have been leveraging digital solutions alongside granular operations management. Thus driving a comprehensive upgrade in both efficiency and the customer experience. Providing a solid foundation of the group's long term sustainable high quality growth.

Wu Jianfeng: I will now turn the call over to our Co CFO, Mr. Wu Jiang Feng. Who will discuss our financial results.

Wang Haijun: Thank you, Haijun.

Wu Jianfeng: Would like to present the company's financial performance for the 2025. Please turn to Slide 20 of the results presentation. Our net revenues for the 2025 grew by 38.4% year over year and 6.5% quarter over quarter

Wang Haijun: to RMB 2,628 million.

Wu Jianfeng: Revenues from our monetized hotels for the 2025 were RMB 1,560 million. Up 32.3% year over year.

Wang Haijun: And 20.1% quarter over quarter.

Wu Jianfeng: The year over year increase was primarily fueled by the

Wang Haijun: ongoing expansion of our hotel network.

Wu Jianfeng: Total number of our monetized hotels increased from 1,504 as of 09/13/2024 to 1,924 as of 09/30/2025. The quarter over quarter increase was mainly due to the growth in RevPAR and our supply chain business. Revenues from our retail business for the 2025 were RMB $846,000,000, reflecting

Wang Haijun: 76.4% year over year increase.

Wu Jianfeng: By 12.3% quarter over quarter decline.

Wang Haijun: The year over year

Wu Jianfeng: growth was driven by increasing brand recognition successful product innovation, and a broadened range of product offerings. The quarter over quarter decline was primarily due to the seasonality of our retail business.

Wang Haijun: Now let's move to cost and expense again, expenses. Please turn to slide 21. Hotel opening cost for the 2025 increased by 23.5% year over year and 21.1% quarter over quarter. To RMB 1,082 million.

Wu Jianfeng: These increases were primarily due to higher variable cost, such as supply chain cost and hotel manager cost. Associated with our ongoing hotel network expansion. Gross margin of our hotel businesses expanded to 37.3% in the 2025, from 36% during the same period of 2024. Primarily due to a lower proportion of these hotel as the result of our product mix optimization. Retail cost for the 2025 went up by 36.3% year over year and down by 11.2% quarter over quarter to RMB 100,000,000.

Wang Haijun: The year over year increase was associated with the rapid growth of our retail business.

Wu Jianfeng: Gross margin of our retail business remained stable compared to the same period of 2024. Now please turn to slide 22. Selling and marketing expenses for the 2025 were RMB 355,000,000 compared with RMB 218,000,000 for the same period of 2024.

Wang Haijun: Selling and marketing expenses accounted for 13.5% of net revenues

Wu Jianfeng: for the 2025 compared with 11.5% for the same period of 2024. The increase was mainly due to the invest due to investments in brand recognition and the effective development of online channels. In line with the growth of our retail business.

Wang Haijun: General and administrative expenses for the 2025 were RMB 100,000,000 and included RMB 10,000,000 in share based compensation expenses, compared with RMB 82,000,000 for the same period of 2024 which also include RMB 3,000,000 in share based compensation expenses. General and administrative expenses

Wu Jianfeng: excluding share based compensation expenses, accounted for 3.4 of net revenues for the 2025. Compared with two 4.2% for the same period of 2024.

Wang Haijun: The decrease was primarily due to improved management efficiency and economics of scale. Technology and development expenses for the 2025 were RMB 44,000,000 compared with RMB 30,000,000 for the same period of 2024. Technology and development expenses accounted for 1.7% of net revenues for the 2025 compared with 1.6% for the same period of 2024.

Wu Jianfeng: Please turn to slide 23. Adjusted net income

Wang Haijun: for the 2025 was RMB 488,000,000. Representing a 27% increase year over year. Adjusted net profit margin for the 2025 was 18.6%. Adjusted EBITDA for the 2025 was RMB 685,000,000, up by 28.7% year over year. Adjusted EBITDA margin for the 2025 was 26.1%.

Wu Jianfeng: Please turn to slide 24. We also maintained a healthy cash position As of 09/13/2025, our cash and cash equivalents totaled RMB 2,670 million with net cash of RMB 2,603 million. Please turn to slide 25.

Wang Haijun: In line with our commitment to enhancing shareholder value, and our annual

Wu Jianfeng: dividend policy adopted in August 2024, today, we declare our second cash dividend for 2025. Totaling approximately US dollar 50,000,000. Through a comprehensive shareholder return, initiative encompassing dividends and share repurchase. Are taking concrete actions to reward shareholders trust and support.

Wang Haijun: Enabling all shareholder should to share in the company's growth achievements.

Wu Jianfeng: Please turn to slide 26. For full year, 2000 to for full year 2025, given ongoing network expansion and rapid growth of our retail business we currently expect total net revenues to increase by 35% compared with full year 2024. That concludes our financial highlights for the 2025. Now let's open for q and a. Thank you, management. We will now begin the question and answer session. To ask a wait for your name to be announced. For the benefit of all participants on today's call, if you raise your questions in Chinese, please immediately repeat your questions in English. Please limit your questions to one at a time. If you wish to have follow-up questions, please rejoin the queue.

One moment for the first question. Our first question comes from the line of Dan Chi from Morgan Stanley. Please go ahead.

Wang Haijun: Hello, management. Could the management share the RevPAR trend since October? And also, if it's possible, can you provide your outlook for RevPAR in the fourth quarter and also potentially next year? Thank you. Thank you, Dan. Let me address your question. Since the beginning of this year, with the continued recovery in industry supply and the demand dynamics, we sticked to a high quality development. And leveraged a refined strategy of revenue management demonstrating strong operational resilience. Throughout the first three quarters of this year, our RevPAR has shown a trend of progressive improvement on a year over year basis. During the National Day holiday, leisure travel demand remained robust, but the market exhibited some significant structural divergence.

Driven by stronger ADR our RevPAR achieved year on year growth. After the holiday, the market returned to a business dominated environment. But benefiting from active exhibitions and business travel activities, the demand in core cities demonstrated strong resilience. Therefore, we expect the pressure from the year on year decline in RevPAR to further ease in the fourth quarter. Looking ahead, the market will continue to show divergence. With still some challenges and uncertainties remaining. We will continue to deeply understand user needs strengthen our foundational capabilities, attracting users with high quality hotel products and the differentiated experiences.

By forging deeper emotional ties with them, we will secure long term advantages in a volatile market environment and demonstrate our resilience for development. Thank you. Thank you, Dan. Next question, please.

Wu Jianfeng: Thank you for the question. Next question comes from Sujie Lin of CICC. Please go ahead.

Wang Haijun: So thank you, management. Could you please share more about

Lydia Lin: the recent new wholesale signing trends and whether there are any changes to the full year hotel opening and closure targets. Thank you.

Wu Jianfeng: Thank you, Suji. Let me answer your question. In recent years, we found that during our scale expansion, Ator has

Wang Haijun: consistently maintained our strategic focus on premier hotels. Concentrating on core locations for expansion and we strictly controlled quality. At the same time, we have launched several new hotel products that align with market needs. With the successful launch of many high quality projects, our brand strength and the differentiated competitive advantage have been further solid solidified. So we do not endorse a growth strategy driven purely by scale. We firmly believe that only by advancing scale growth on the foundation of quality. Can we achieve sustainable better?

Wu Jianfeng: Regarding signings, as we mentioned earlier,

Wang Haijun: we maintain a strict selection mechanism.

Wu Jianfeng: Focusing on expansion in core business districts of key cities.

Wang Haijun: With high quality being a prerequisite, the total number of new hotel signings this year is generally in line with last year. Maintaining a steady development pace. At the same time, we are also clearing stock projects in the pipeline

Wu Jianfeng: in an orderly fashion to promote the healthy development of our pipeline.

Wang Haijun: In terms of openings and closures, we opened 152 hotels in the third quarter. We have full confidence in achieving the full year guidance of 500 new openings and reaching our strategic target

Wu Jianfeng: of 2,000 premier hotels by the end of this year. Meanwhile, for the operating hotels of ours, we place great emphasis on operational quality and user experience, by strengthening standard implementation and refined management

Wang Haijun: we can ensure that every hotel can deliver consistently high quality service. To this end, we maintain a certain proactive replacement rate to continuously enhance the quality of our overall hotel network. In the third quarter, we closed 28 hotels and expect approximately 80 closures entirely for this year.

Wu Jianfeng: Thank you.

Wang Haijun: Thank you, Suji. Next question, please.

Wu Jianfeng: Thank you for the question. Next questions come from Chen Xing of UBS. Please go ahead. This is the change this is from UBS. And my question is about the retail business. Could the management to share your perspective on the competition in the retail business? In addition, given the consistent of performance, of the retail business, would you consider any adjustments to your full year retail revenue guidance? Thanks.

Wang Haijun: Thank you, Chen Xing. Let me start by sharing the development strategy of ours and the competitive landscape of our retail business. Since AturPlanet entered the sleep industry, our brand and product power have gradually gained market recognition This has been followed by a rise in imitators and industry participants, leading to an increasingly fierce competition However, we always believe that the real competition is not about the peers. But is about the ever evolving user needs.

Wu Jianfeng: To address this,

Wang Haijun: we did not simply follow the existing industry path.

Wu Jianfeng: Instead, we progressively built our products and supply chain system with our distinctive characteristics. For example, we officially launched the AturPlanet Deep Sleep Standard recently. This standard differs from traditional industry metrics like

Wang Haijun: fabric weights or thread counts,

Wu Jianfeng: but it is based on sensory science. And the natural rhythms of human sleep. Focusing on two core sensory indicators of sleeping users the fluctuation of pressure. And the change of temperature.

Wang Haijun: This standard also places higher demands on our product development and

Wu Jianfeng: production.

Wang Haijun: We aim to continuously strengthen our product barriers through this forward looking standard while collaborating with the upstream supplier partners to jointly lead the industry progresses. As a relatively new player in the industry,

Wu Jianfeng: we always plan our layout with a longer term mindset. While developing quite rapidly, we have been constantly building and our foundational capabilities. I believe our underlying philosophy is consistent between the retail and hotel businesses, which is to always prioritize quality over scale.

Wang Haijun: Moving forward, Atwell Planet will continue to strengthen our product and power, remain user centric,

Wu Jianfeng: focus on the systematic development of our long term capabilities and practice and towards groups, long termism development path.

Wang Haijun: Well, let me address your question about our retail revenue. During the Double Eleven period, our tour planner delivered outstanding performance and continuously strengthened our brand presence in the minds of users.

Wu Jianfeng: Based upon our strong performance in Q3 and the Double Eleven,

Wang Haijun: we are now raising our full year retail revenue growth outlook to at least 65% year on year.

Wu Jianfeng: And accordingly, adjust the group's full year revenue guidance to a growth of 35% year on year. Thank you. Thank you, Next question, please.

Wang Haijun: Certainly. Next question comes from Ronald Ng of Bank of America. Please go ahead.

Wu Jianfeng: Let me translate my question into English. So we noticed Atul has announced a second dividend distribution plan this year. Could management provide an update on the pending and progress regarding shareholder returns? Thank you. Thank you, Ronald.

Wang Haijun: Regarding dividends, as we announced it today, our second dividend

Wu Jianfeng: distribution this year amounts to approximately 50,000,000 US dollars, representing about 29% of last year's net income.

Wang Haijun: Consequently, the cumulative dividend total for this year reaches about $1,000,000 accounting for approximately 2% of the prior fiscal year's net income.

Wu Jianfeng: Exceeding our commitment of no less than 50% of that. Additionally, we formally commenced our share repurchase program in September and we'll continue to execute them in accordance with our established three year plan. Looking ahead, we will continue to implement our comprehensive shareholder return program combining dividends, and repurchases, targeting a payout ratio of 100% based upon the previous fiscal year's GAAP net income.

Wang Haijun: With the specific implementation pace,

Wu Jianfeng: to be dynamically arranged in line with our business development and capital planning.

Wang Haijun: Through these tangible actions, we are committed

Wu Jianfeng: to creating long term value and sharing the success of the company with our shareholders. In appreciation of your ongoing support and trust. Thank you, Ronald. Next question, please.

Wu Jianfeng: One moment for the next question. The next question comes from Lydia Lin of Citi. Please go ahead.

Lydia Lin: Since management, I'm Lydia from Citi. We noticed this draw operation performance for the to align in the third quarter. So could you share your plan for the actual light in the next step? And any plan for accelerating the store expansion? Thank you.

Wu Jianfeng: Thank you, Lydia. Well, yes, indeed.

Wang Haijun: The third quarter, the RevPAR of operating at our Life Series three hotels

Wu Jianfeng: surpassed the level from the same period last year.

Wang Haijun: Performing pretty decently. And in fact,

Wu Jianfeng: since the beginning of this year, Atura Lite has achieved a notable result in brand building, operational efficiency, user experience, with both operational performance and a scale growth meeting our expectations. We always believe that the core of a brand license is products.

Wang Haijun: The tour light hotel product accurately aligns with the needs and aesthetic preferences of today's young users. The newly launched Antwerp Lite 3.3 with its constantly optimized investment model achieved a better balance between service experience and operational efficiency. Through the implementation of the first batch of our Atur light 3.3 project, are constantly gathering feedback from various sites. Refining product details and strengthening our differentiated competitive advantage in the mid scale market. We expect the scale of Atorlie Series three hotels in operation will be reaching 170 to 180 by the end of this year. We are firmly optimistic about the long term development of tour life. At this current early stage of the brand development.

We are particularly focused on solidifying the operational foundation

Wu Jianfeng: and our systematic capabilities. As for our next step, we will systematically build a dedicated operational system for AtorLife,

Wang Haijun: strengthening its differentiated positioning in all aspects including from brand concept to service delivery,

Wu Jianfeng: this will not only distinguish it from our main Atour Hotel brand, but also highlight

Wang Haijun: the unique value

Wu Jianfeng: in the mid scale hotel market. On this basis, we will steadily advance towards a longer term development goal of hitting 1,000 hotels milestone for Atur Light brand. Thank you.

Wang Haijun: Thank you, Richard.

Wu Jianfeng: That concludes today's questions and answer session. I would like to turn the conference back to Mr. Luke for any additional comments or closing comments.

Wang Haijun: Thank you for joining us today. If you have any further questions, please feel free to contact our IR team We look forward to speaking with you again next quarter. Thank you, and goodbye.

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

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