GreenTree Hospitality (NYSE:GHG) Q3 Revenue Drop Tests Bullish China Recovery Narrative

GreenTree Hospitality Group (NYSE:GHG) has posted its Q3 2025 numbers, reporting revenue of CNY 303.6 million, basic EPS of CNY 0.60 and net income of CNY 60.8 million, with a trailing twelve month net profit margin of 15.2% compared with 14% a year earlier. The company has seen quarterly revenue move from CNY 356.98 million in Q3 2024 to CNY 303.61 million in Q3 2025, while basic EPS shifted from CNY 0.65 to CNY 0.60 over the same period. This sets up a results season where steady margins and modest long term earnings growth sit alongside shorter term profit pressure.

See our full analysis for GreenTree Hospitality Group.

With the headline figures on the table, the next step is to put these results up against the dominant market narratives to see which storylines still hold and which ones the latest quarter starts to challenge.

Curious how numbers become stories that shape markets? Explore Community Narratives

TTM revenue edges down to CNY 1.19 billion

• Over the last twelve months, total revenue slipped from CNY 1,514.99 million in Q2 2024 LTM to CNY 1,187.21 million in Q3 2025 LTM, even though single quarter revenue in Q3 2025 was CNY 303.61 million.
• What is striking for the bullish view that often leans on long term China consumer growth is that:
  • Trailing net income excluding extra items also moved down from CNY 250.32 million in the Q2 2024 LTM window to CNY 180.19 million in the Q3 2025 LTM window, so recent performance is weaker than that earlier period.
  • Five year earnings growth of 3.2% per year is positive, but the drop in trailing revenue and profit versus those earlier LTM snapshots means recent trading does not obviously showcase accelerating growth.

Margins hold near 15.2 percent

• The trailing net profit margin stands at 15.2% compared with 14.0% a year earlier, while quarterly net income excluding extra items in Q3 2025 was CNY 60.81 million on CNY 303.61 million of revenue.
• From a bearish angle that worries about earnings durability, the margin picture creates a mixed signal:
  • On the supportive side for profitability, the improvement from 14.0% to 15.2% shows that reported profit has held up as a share of sales even though LTM revenue is lower than in earlier periods.
  • Balancing that, the major risk flag that a high share of trailing earnings is non cash means the 15.2% margin does not automatically translate into equally strong cash generation.

P E of 7.2x versus industry 22x

• At a share price of $1.82 and a trailing P E of 7.2x, GreenTree trades well below both the US hospitality industry average of 22x and a peer average of 79x, and sits about 4.8% below a DCF fair value of roughly $1.91.
• For investors weighing bullish versus cautious narratives, valuation and cash flow risks pull in different directions:
  • The discount to both the 22x industry multiple and the 79x peer multiple, together with the gap to the DCF fair value of 1.91, lends numerical support to the idea that the stock could offer value on trailing earnings.
  • However, the combination of a major risk from high non cash earnings and a 5.49% dividend that is not well covered by free cash flow shows that part of the low P E may reflect concerns about how solid those earnings and payouts really are.

To see how this mix of low multiples, margin stability and cash flow risks fits into a broader story for GreenTree, investors often look for a more structured narrative that ties the numbers to long term growth drivers and potential downside, especially when the headline valuation looks cheap relative to peers. 📊 Read the full GreenTree Hospitality Group Consensus Narrative.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on GreenTree Hospitality Group's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

Explore Alternatives

GreenTree is facing shrinking revenue, softer earnings and questions over cash coverage of its dividend, even as reported margins and valuation look superficially supportive.

If you want steadier fundamentals and fewer surprises, use our stable growth stocks screener (2123 results) to focus on businesses delivering consistent revenue and earnings progress rather than wrestling with profit pressure.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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