H World Group Limited (NASDAQ:HTHT) shares are trading higher on Thursday after the company reported fourth-quarter results.

• Adjusted earnings per ADS of 14 cents, missed the analyst consensus of 27 cents.
• Quarterly sales of $825 million beat the street view of $798.17 million.
• Revenue rose by 7.8% year-over-year (Y/Y), exceeding the previously forecasted guidance of an increase of 1% to 5% for the fourth quarter of 2024.
• Revenue from the Legacy-Huazhu segment grew by 9.2% Y/Y, aligning with the previously announced 1% to 5% guidance, while revenue from the Legacy-DH segment saw a 2.9% Y/Y increase.
• As of Dec. 31, 11,147 hotels and over one million hotel rooms were in operation.
• In the quarter, revenue from leased and owned hotels was $462 million, representing a decline of 2.3% Y/Y and 8.6% Q/Q.
• Revenue from franchised hotels in the quarter was $342 million, representing a 24% Y/Y growth.
• Hotel turnover increased 16.5% Y/Y in the fourth quarter. Adjusted EBITDA reached $171 million in the quarter.

Dividend: The board has approved the declaration and payment of a cash dividend in the aggregate amount of around $300 million, of $0.097 per share, or $0.97 per ADS for the second half of 2024.

The dividend is payable on April 23, 2025 to shareholders of record as on on April 9, 2025.

Buyback: In July 2024, H World introduced a three-year Shareholder Return Plan of up to $2 billion.

For 2024, the Board declared $500 million in cash dividends, and the company repurchased approximately $267 million in shares.

These combined returns total $767 million, exceeding one-third of the plan and accounting for over 80% of the company's free cash flow for the year.

Outlook: As of Dec. 31, the company had cash and cash equivalents of $1.0 billion and restricted cash of $7 million.

For the first quarter, the company anticipates revenue growth of 0%-4% and 3%-7% excluding the DH segment.

For 2025, the company projects revenue growth of 2%-6% or 5%-9% excluding DH. 

For 2025, H World anticipates to open around 2,300 hotels and close around 600 hotels.

H World CEO Jin Hui noted that Legacy-Huazhu opened over 2,400 new hotels in 2024. That exceeds the company’s initial target of 1,800 hotels.

”While Legacy-Huazhu’s full-year RevPAR declined slightly year-over-year from a high base last year, Legacy-Huazhu maintained a high occupancy rate of 81.2%, which we believe is encouraging given the speed of our network expansion,” Hui added.

Investors can gain exposure to Alibaba through Invesco Golden Dragon China ETF (NASDAQ:PGJ) and Defiance Hotel, Airline, and Cruise ETF (NYSE:CRUZ).

Price Action: H World Group shares are up 0.80% at $38.36 premarket at the last check Thursday.

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