The hotel industry has now firmly entered an era of competition over existing stock, with the sector's development focus shifting from simply pursuing the expansion of new store counts to the refined operation of existing assets. The depth and quality of existing asset management directly determine a company's performance throughout the industry cycle. In the first half of 2026, amid a pressured industry environment, listed company Shanghai Jin Jiang International Hotels Co., Ltd. stood out with its refined operational capabilities for existing assets, delivering a resilient half-year performance with notable improvements across several core financial metrics.

Data shows that in the first half of 2026, the company achieved operating revenue of RMB 6.801 billion, a year-on-year increase of 4.21%; net profit attributable to shareholders reached RMB 545 million, up 47.05% year-on-year; and net profit attributable to shareholders excluding non-recurring items hit RMB 593 million, a 45.16% increase year-on-year. On the financial side, operating cash flow grew 57.95% year-on-year, while finance costs declined 16.36%, further solidifying the company's overall financial safety margin. What drove these results? A closer look at the company's adjustments in recent years and the operating data reflected in its financial reports reveals that the revenue turnaround is not a numbers game powered by industry cycle tailwinds or terminal price hikes. Instead, it stems from "internal discipline" — specifically, endogenous growth generated through internal management optimization, revitalization of existing assets, and upgrades to the product structure.

Refined Control: Precision Efficiency in the Direct-Operated System, with Model Capabilities Empowered to the Franchise Network

During the industry's previous phase of rapid expansion, many enterprises allocated most of their resources to store expansion, with direct-operated stores largely serving demonstration purposes. As a result, cost management in areas such as rent, labor, and energy consumption was relatively loose at some locations. Now entering the new cycle of stock competition, and facing the reality of divergent performance among existing stores, industry players are gradually abandoning simplistic closures and instead attempting to unlock operating potential through systematic management reforms. Polishing the operational capabilities of direct-operated stores has become a common industry challenge.

Against this backdrop, Shanghai Jin Jiang International Hotels Co., Ltd. has developed its own approach: positioning direct-operated stores as testbeds for operational reform and treating single-store management refinement as a key lever for change. Beginning in 2025, the company's domestic limited-service hotel segment launched a new round of organizational restructuring, implementing the reform direction of "streamlining headquarters, strengthening regions, and solidifying provincial operations." This involved bolstering frontline business capabilities, shortening decision-making chains, and pushing operational authority and accountability down to regional and store levels. With the organizational structure streamlined, the company has since implemented penetrating operational control over its direct-operated stores this year: vertical management from headquarters, with some major regions establishing independent direct-operated provincial units, and assessment mechanisms cascaded down to the individual store level. A comprehensive set of refined management measures has been deployed around daily store operations, rent negotiations, labor and energy optimization, and single-store business model refinement. This reform does not rely on a simple shift in asset models; its core focus is on improving single-store operational quality.

Ultimately, these adjustments are reflected in the operating data. In the first half of 2026, the company's domestic direct-operated limited-service hotels saw RevPAR increase 10.7% year-on-year and occupancy rise 7.2 percentage points, with profitability in the direct-operated segment steadily climbing — the effects of control measures are tangibly visible on the balance sheet. Overseas direct-operated limited-service hotels also recorded a RevPAR increase of 7.26% compared with the same period last year. More notably, the value of the recovery in the direct-operated system's fundamentals extends beyond the segment itself. The headquarters has also distilled and consolidated the operating standards, cost models, and on-site management experience proven at direct-operated stores, feeding this knowledge back into the vast franchise business base. This model of "direct-operated stores as benchmarks, with experience reused across the entire network" directly amplifies the returns from reform. Reflected in overall financials, comprehensive calculations show that in the first half of 2026, the company maintained a gross profit margin of 36.93%, while costs were effectively contained, with the dividends of internal optimization continuing to be released.

Driving Revitalization: Revaluing Existing Assets, Combined with Digital Platform Operations to Unlock Profit Headroom

Running in parallel with refined control is the upgrade and revitalization of existing properties. Of course, this is not an exclusive strategy of Shanghai Jin Jiang International Hotels Co., Ltd. but rather a consensus across the industry. So-called revitalization and upgrading involves two approaches: one is large-scale brand conversion, where older properties are directly re-branded; the other is flexible, light-touch renovations that keep conversion costs in check. After such renovations, store RevPAR generally recovers to varying degrees. In the first half of 2026, the company completed upgrades at over 380 existing domestic limited-service hotels, eliminating low-efficiency assets and renovating older stores with aging hardware and weakened product competitiveness. Following these renovations, many older stores saw repairs in occupancy rates and per-store revenue, reactivating the value of existing assets. Meanwhile, overseas limited-service hotels also completed renovations at over 40 properties, comprehensively upgrading hardware quality. For direct-operated stores that completed renovation between 2023 and 2025, RevPAR improved by 9% compared with pre-renovation levels, and RGI grew 7 points to 105. Drawing on the operational improvements seen from past existing-store renovations, the projects delivered this year are also expected to gradually release operating momentum, providing support for subsequent performance recovery in the overseas segment.

However, completing hardware renovations does not mean the problem is fully solved. Many renovated stores still rely heavily on external OTA channels for customer acquisition, with high channel commissions continuing to erode store profits. This means only the product has been revitalized, not the revenue structure. To address this industry pain point, many peers are building out direct sales systems, but Shanghai Jin Jiang International Hotels Co., Ltd.'s differentiation lies in translating its strategy into a complete, executable operating system that pursues revitalization through a dual-track approach. Specifically, in recent years, the company has leveraged its platform system to integrate membership, booking, and operations back-end functions, continuously optimizing the customer source structure. At the same time, closely aligned with new quality productive forces, it has used smart and digital tools to upgrade front-end and back-end systems. This represents another sustained area of priority investment following multiple rounds of organizational change. The membership system has now become the cornerstone of the company's direct sales channel. In the first half of 2026, the central booking rate for domestic limited-service hotels reached 74.6%, up 11.8 percentage points from the 2025 level; the direct sales share increased 33.9% year-on-year; the membership contribution rate hit 75.57%, up 13% year-on-year; and monthly active users on the membership platform grew 24% year-on-year. The business travel segment also maintained robust growth, with GMV up 31.5% in the first half and GMV from clients with transaction values above ten million up 26%. The combination of a highly sticky membership base and incremental business travel volume has continuously strengthened central booking capabilities, together forming a stable and efficient customer source structure. The company's digital capability building also runs through the entire chain — store operations, guest services, overseas systems, and global supply chain — providing powerful support for business development. Among these, the JINTELL AI voice assistant for domestic limited-service hotels expanded coverage to over 1,200 new stores in the first half, completing a major experience upgrade that reduced response time from 6 seconds to 2 seconds, delivering a virtually imperceptible interaction experience. The Biliangxing APP's employee-facing coverage reached 99%, supporting room status adjustments, cleaning management, and order inquiries to boost frontline efficiency. Overseas limited-service hotels are also advancing the unified deployment of the EMMA CRS system, with ongoing optimization of overseas membership and official website. The Jin Jiang GPP global procurement platform now serves 75 countries and is actively driving the overseas supply chain transition from "Made in China" to "China Supply Chain." In the first half, domestic market GMV reached RMB 5.51 billion, up 11% year-on-year, saving franchisees nearly RMB 100 million in procurement costs cumulatively, thereby thickening the profit margins of existing stores from the supply chain end.

Promoting Iteration: Continuously Upgrading the Product Structure, with a Multi-Tiered Brand Matrix Lifting the Overall Profit Center

Hardware revitalization combined with digital operations is only part of the quality and efficiency improvement effort. Enterprises also need to keep pace with shifting market and consumer demands, advancing product iteration in step with the times — an insight Shanghai Jin Jiang International Hotels Co., Ltd. clearly possesses. With the trend of accommodation consumption stratification and quality upgrades, consumers are no longer satisfied with basic lodging functions alone; their demands for travel experience and value-for-money continue to rise. Over the past few years, the company has responded to market changes by driving upgrades of existing economy hotels to midscale levels, while new signed projects have prioritized the midscale and upper-midscale tracks. Alongside high-quality store expansion, the company has continuously cleaned up its existing store structure, proactively eliminating low-quality legacy projects and consistently improving the overall quality and composition of its store assets. During the reporting period, 75% of new signed projects for domestic limited-service hotels were concentrated in the midscale and upper-midscale tiers, a share that has steadily risen across multiple reporting periods. Simultaneously, the newly opened full-service hotel scale expanded steadily, forming a complementary product matrix with limited-service hotels that covers diverse consumption scenarios from mass business travel to high-end vacations. Economy hotels rely on rigid travel demand to secure a stable customer base, but pricing ceiling constraints limit their profit expansion potential; midscale and above products, by contrast, offer greater revenue and profit elasticity, opening up more substantial earnings growth room. As the share of midscale and upper-midscale products continues to rise, the operating quality and profit headroom of Shanghai Jin Jiang International Hotels Co., Ltd. are further elevated. Segment operating data shows that midscale hotel RevPAR is significantly higher than that of economy hotels. In an environment where industry room rates are under pressure overall, midscale products have demonstrated stronger revenue resilience, becoming the main profit contributor for the domestic limited-service hotel segment. The full-service hotel matrix is also releasing its operational advantages, with net profit attributable to shareholders for domestic full-service hotels growing 27.70% year-on-year in the first half.

In summary, looking back at the development trajectory, after the one-time gains from asset disposals in 2024 faded, Shanghai Jin Jiang International Hotels Co., Ltd. did not resort to external expansion tactics to beautify short-term financials. Instead, it chose a series of deep internal reforms, including organizational transformation and digital upgrades. After multiple rounds of adjustment, the value of the three reform levers — control, revitalization, and iteration — has gradually materialized. The company has thus established a replicable, sustainable endogenous growth model: refined control of direct-operated stores builds a solid management foundation, existing-store revitalization activates dormant assets, and product structure iteration lifts the profit ceiling. Viewed through the lens of first-half 2026 results, growth has not come from scale expansion or terminal price increases alone; rather, it is the combined release of these three endogenous growth drivers that is building the company's long-term operational resilience.