United States securities and exchange commission logo
September 11, 2023
Yiping Yang
Chief Financial Officer
GreenTree Hospitality Group Ltd.
1228 Zhongshan North Road, Putuo District
Shanghai 200065
People's Republic of China
Re: GreenTree
Hospitality Group Ltd.
Form 20-F for the
Year Ended December 31, 2022
Filed on April 28,
2023
File No. 001-38425
Dear Yiping Yang:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F filed April 28, 2023
We face various legal and operational risks and uncertainties..., page 5
1. We note you face risks
associated with regulatory approvals of offshore offerings, anti-
monopoly regulatory
actions, cybersecurity and data privacy in China. Please state
affirmatively whether
you have received all requisite permissions or approvals and
whether any permissions
or approvals have been denied by the China Securities
Regulatory Commission
(CSRC), Cyberspace Administration of China (CAC) or any
other governmental
agency that is required to approve your subsidiaries operations in
China. Please also
describe the consequences to you and your investors if you or your
subsidiaries: (i) do
not receive or maintain such permissions or approvals or (ii)
inadvertently conclude
that such permissions or approvals are not required.
Uncertainties with respect to the Chinese legal system could adversely
affect us, page 6
Yiping Yang
FirstName
GreenTree LastNameYiping
Hospitality GroupYang
Ltd.
Comapany 11,
September NameGreenTree
2023 Hospitality Group Ltd.
September
Page 2 11, 2023 Page 2
FirstName LastName
2. Please revise to clarify that the rules and regulations in China can
change quickly with
little advance notice.
We may not pay further dividends to our public shareholders. . ., page 35
3. We note that you declared cash dividends in 2019 and 2021. Since you
are a holding
company that relies principally on your operating subsidiaries in
China for your cash
requirements, please quantify any cash flows and transfers of other
assets by type that
have occurred between you and your subsidiaries, and direction of
transfer.
Item 4. Information on the Company
C. Organizational Structure, page 85
4. Please provide a legible corporate structures diagram since your
current diagram is too
small to be legible. Please ensure that the company s parent and
subsidiaries, including
name, country of incorporation or residence, proportion of ownership
interest and, if
different, proportion of voting power held are clearly legible in your
diagram.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections,
page 128
5. Please supplementally describe any materials that were reviewed in
connection with your
required submission under paragraph (a) and tell us whether you relied
upon any legal
opinions or third party certifications such as affidavits as the basis
for your submission. In
your response, please provide a similarly detailed discussion of the
materials reviewed and
legal opinions or third party certifications relied upon in connection
with the required
disclosures under paragraphs (b)(2) and (3).
6. In order to clarify the scope of your review, please supplementally
describe the steps you
have taken to confirm that none of the members of your board or the
boards of your
consolidated foreign operating entities are officials of the Chinese
Communist Party. For
instance, please tell us how the board members current or prior
memberships on, or
affiliations with, committees of the Chinese Communist Party factored
into your
determination. In addition, please tell us whether you have relied
upon third party
certifications such as affidavits as the basis for your disclosure.
7. We note that your disclosures pursuant to Item 16I(b) refers to our
company. It is
unclear from the context of these disclosures whether these terms are
meant to encompass
you and all of your consolidated foreign operating entities or whether
in some instances
these terms refer solely to GreenTree Hospitality Group Ltd. Please
note that Item 16I(b)
requires that you provide each disclosure for yourself and your
consolidated foreign
operating entities, including variable interest entities or similar
structures. To clarify this
matter, please provide the information required by each subsection of
Item 16I(b) for you
and all of your consolidated foreign operating entities in your
supplemental response.
4. Deconsolidations, page F-31
Yiping Yang
GreenTree Hospitality Group Ltd.
September 11, 2023
Page 3
8. We note your disclosure that starting in late May 2022, the group had
been in dispute with
the minority shareholder of Argyle as to the performance of relevant
transaction
documents and/or compliance with local laws and regulations by the
minority shareholder
and that as a result, the group no longer has the power and ability to
direct the relevant
activities of Argyle, and therefore, deconsolidated it beginning in
June 2022. Please
further elaborate on the facts and circumstances that resulted in the
group losing its ability
to control Argyle and consolidate it as a result of a minority
shareholder's action or
inaction. In providing your response, please explain how the Company
applied the
guidance in ASC 810-10-40-4 and ASC 810-10-55-4A to its facts and
circumstances.
Finally, given the fact that the minority shareholder's action or
inaction resulted in the
group's determination that it no longer controlled Argyle, please tell
us how the Company
originally determined that it had a controlling financial interest in
Argyle such that it
resulted in it consolidating Argyle. In that regard, please tell us
how the Company
considered the variable interest and voting interest models in its
application of ASC 810 in
reaching its conclusion.
6. Loans Receivable, Net, page F-34
9. We note that the provisions for the allowance for loans receivable was
RMB
279 million and RMB 118 million for fiscal years 2022 and 2021,
respectively. Please tell
us more about the factors that led to the significant increase in the
provision recognized
during fiscal year 2022. Please ensure that the Company s MD&A
disclosures fully
address the facts and circumstances that drove the change and whether
the
disproportionate fluctuations and increase in trends are expected to
recur. See Item
303(a)(3)(3)(i) and (ii) of Regulation S-K.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Ameen Hamady at 202-551-3891 or Shannon Menjivar at
202-551-
3856 if you have questions regarding comments on the financial statements and
related matters.
Contact Austin Pattan at (202) 551-6756 or Andrew Mew at (202) 551-3377 if you
have any
questions about comments related to your status as a Commission-Identified
Issuer during your
most recently completed fiscal year. Please contact Kibum Park at 202-551-6836
or David
Link at 202-551-3356 with any other questions.
FirstName LastNameYiping Yang Sincerely,
Comapany NameGreenTree Hospitality Group Ltd.
Division of
Corporation Finance
September 11, 2023 Page 3 Office of Real
Estate & Construction
FirstName LastName