HTHT · H World Group Limited

H World Group Limited's Q1 2026 results reflect continued execution of its asset-light strategy, with manachised and franchised (M&F) revenue surging 20.3% YoY to RMB3.0 billion, comprising half of total revenue, while leased and owned (L&O) revenue declined 1.4% YoY amid strategic exits. HWC drove growth with 12.4% revenue increase to RMB5.0 billion, supported by network expansion of 537 net new hotels and blended RevPAR up 3.0% YoY from ADR gains despite softer occupancy. HWI revenue grew 5.1% YoY to RMB972 million, with blended RevPAR up 5.0% on constant currency from occupancy and ADR improvements, though segment Adjusted EBITDA loss narrowed to RMB56 million from RMB78 million YoY. Operating margin expanded to 24.8% from 20.1% YoY, fueled by higher M&F mix and cost efficiencies, with hotel operating costs as percentage of revenue dropping 5.8 points. Net income dipped 8.6% YoY to RMB817 million due to higher taxes from non-deductible items, but Adjusted EBITDA rose 27% to RMB1.9 billion, highlighting core profitability. Balance sheet remains solid with net cash of RMB6.3 billion after 2026 Notes conversion into 13 million ADSs. CEO Jin Hui emphasized steady expansion toward 2,200-2,300 annual openings, product upgrades, and AI/tech investments. Separately, executive Director Ms. Jie Zheng's resignation effective May 15, 2026, is mitigated by her transition to senior advisor role for continuity.