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The capital expenditure.
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Alex S. Xu, GreenTree Hospitality Group Ltd. - Founder, Chairman & CEO [26]
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David, that -- can you repeat the question?
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David Li, [27]
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Yes. When are you going to see -- because I understand the CapEx is due to an opportunistic purchase of a property, right? And -- just kind of curious when is that -- when is the CapEx going to come down sharply? Is it in the next -- in the second half or next year?
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Alex S. Xu, GreenTree Hospitality Group Ltd. - Founder, Chairman & CEO [28]
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The CapEx will come down -- I wasn't -- the capital expenditures in those kind of opportunity -- opportunistic investment purchases may or may not come down, David. Because those kind of purchases, I think, are concurrent with our L&O model direct leases, which provide really a very, very favorable returns to our shareholders and can weather also the kind of -- there are some concerns, there's foreign currency, the exchange rate changes. So we believe those properties will -- first of all, will financially perform well. Secondly, the -- they are in a very -- a transportation hub that provide great advertising for the company. And thirdly, those assets will appreciate -- we believe those assets will appreciate very nicely in the future. So when we see those opportunities in the future, I think we'll continue to see those for our shareholders. And you are referring to a couple of properties we purchased at -- near second-tier city, it's important, like, in the transportation hub, which overall cost, I think, roughly less than, I believe, the first-floor commercial space is less than RMB 5,000 per square meters in a great location. So it is just a rare opportunity. So we do not know, but we strongly recommend. I even recommend to the board and shareholders when we see those opportunities, we should seek those.
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David Li, [29]
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Okay. And one last one, sorry I didn't mean to hold the line. You have total about 8 brands now. Sort of medium term, do you feel like 8 brands are enough for you to keep growing or for you to double? At what point of the size of the business in terms of units would you need more than 8 brands?
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Alex S. Xu, GreenTree Hospitality Group Ltd. - Founder, Chairman & CEO [30]
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We believe, we should have 15 brands. So we still have 7 more to go in the past. So because the -- we -- as a brand, we should really target different price range, and then we're not even talking about decor just like Selina said. But if we combine the basically the brand that should consist of 2 major components, I think one is the price range, exactly what our travelers and customers can afford; secondly, what kind of taste. So there are 2 dimensions to the brand. So with 2 dimensions, there may be even more variety and -- but we will -- and the M&A will take that into consideration, David. So as our team internally we all know, the M&A target would have to be both brands as well as a geographic coverage. They have to be complementary to GreenTree and the existing brand and portfolio. We do not want to do something that cannibalize each other.
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Operator [31]
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The last question comes from Xin Chen with UBS.
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Xin Chen, UBS Investment Bank, Research Division - Director and Research Analyst [32]
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I have a question. My question is about, may I know the second quarter RevPAR growth Tier 1, Tier 2 and lower cities separately, and trend in the second half of this year?
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Alex S. Xu, GreenTree Hospitality Group Ltd. - Founder, Chairman & CEO [33]
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Do you have the number? No, the past -- the current quarter. Do you have the number? Selina Jasmine. Jasmine will have the second quarter, Tier 1, Tier 2, Tier 3 cities RevPAR growth.
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Yiping Yang, GreenTree Hospitality Group Ltd. - VP of Operations & Director [34]
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Yes. In our second quarter 2018, our Tier 1 cities the RevPAR growth is low double digit, primarily driven by ADR growth. Our Tier 2 -- Tier 2 cities is in -- around 7% in Tier 2 cities; in Tier 3 and lower cities, is in low single digit. Does that answer your question?
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Xin Chen, UBS Investment Bank, Research Division - Director and Research Analyst [35]
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Yes. May I know the trend in the second half of this year?
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Alex S. Xu, GreenTree Hospitality Group Ltd. - Founder, Chairman & CEO [36]
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Trending forward. We have -- we believe, the trend will continue to be consistent with what we have reported and planned earlier. So in the past that I believe we said full year, we will anticipate our RevPAR growth is between 4% to 6%. And so we continue to see the trend in that regard in light of even -- in light of some of the investors concerned of the current economy.
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Yiping Yang, GreenTree Hospitality Group Ltd. - VP of Operations & Director [37]
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And as you can see, we're also seeing Chinese government is trying to (inaudible) in order to revitalize smaller cities. So we believe, eventually leisure travel growth -- we see a lot of opportunities to grow RevPAR since our (inaudible) can with brand positioning.
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Alex S. Xu, GreenTree Hospitality Group Ltd. - Founder, Chairman & CEO [38]
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Good comment, Selina. The first -- I think the last couple of years you can see some RevPAR increase in the first-tier cities and then spread in second-tier cities. I think that the next catch-up, I think, should be in more third or fourth tier cities, because once we have a dramatic growth then the growth rate tends to slow down. And then, it is like a wave spreading into the other cities eventually evenly. So the -- it's like that our current [CPI]. So that -- we believe our current mix and the -- current mix of the portfolio will ensure that we'll have a very healthy growth in the RevPAR.
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Operator [39]
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This concludes our question-and-answer session. I would like to turn the conference back over to Selina Yang for any closing remarks.
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Yiping Yang, GreenTree Hospitality Group Ltd. - VP of Operations & Director [40]
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Thank you, operator. In closing, on behalf of the entire GreenTree management team, we'd like to thank you for your interest and participation in today's call. If you require any further information or have any interest in visiting us in China, please don't hesitate to contact us. This concludes the call. Thank you all.
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Alex S. Xu, GreenTree Hospitality Group Ltd. - Founder, Chairman & CEO [41]
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Thank you.
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Operator [42]
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This conference has now concluded. Thank you for attending today's presentation, you may now disconnect.