China’s slowing economy is taking a toll on the nation’s hotel sector, where growth has dipped solidly into the single digit percentage range in the latest preliminary results for China Lodging Group (Nasdaq: HTHT), operator of the Hanting and Starway brands. Investors were clearly unhappy about these latest results, which are likely to be reflected throughout the industry when China Lodging and its 2 main listed rivals, Home Inns (Nasdaq: HMIN) and 7 Days (NYSE: SVN), report their results in the weeks ahead.
Tag Archives: Home Inns
Carlyle, Home Inns Drive Hotel Consolidation 酒店业整合加速：如家快捷和凯雷投资的并购
Consolidation is accelerating the budget hotel space with new acquisitions by industry leader Home Inns (Nasdaq: HMIN) and private equity giant Carlyle (Nasdaq: CG), as China’s top operators look for ways to maintain their growth going amid a slowing market. This growing string of smaller deals is building up to the big story that’s likely to come in the next 2 years, when we could see a Chinese player make a global acquisition or one of the big foreign operators buy up a Chinese brand.
News Digest: July 3, 2012 报摘： 2012年7月3日
The following press releases and media reports about Chinese companies were carried on July 3. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
◙ Apple (Nasdaq: AAPL) Pays $60 Million to Settle China iPad Trademark Dispute (English article)
◙ Youku-Tudou Online Video Market Share Drops to 32.4 Pct in Q1 – Analysys (Chinese article)
◙ Youku (NYSE: YOKU) Announces Senior Management Promotions (PRNewswire)
◙ Sohu (Nasdaq: SOHU) Buys Back 10 Pct of Sogou Search Engine Held by Alibaba (Chinese article)
◙ Home Inns (Nasdaq: HMIN) Announces Acquisition of eJia Express Hotels (PRNewswire)
News Digest: May 12-14, 2012 报摘： 2012年5月12-14日
The following press releases and media reports about Chinese companies were carried on May 12-14. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
◙ US Senator Questions Fed on Chinese Bank Decision (English article)
◙ Perfect World (Nasdaq: PWRD) Announces Findings of Internal Investigation (PRNewswire)
◙ Baidu’s (Nasdaq: BIDU) Qunar Sues Ctrip (Nasdaq: CTRP) for Defamation (English article)
◙ Xueda Education (NYSE: XUE) Buys 60 Pct of Weilan Int’l for 18.9 Mln Yuan (Chinese article)
◙ Home Inns (Nasdaq: HMIN) Reports Q1 Financial Results (PRNewswire)
◙ Latest calendar for Q1 earnings reports (Earnings calendar)
Hotels: Room for Consolidation 经济型酒店行业或加速整合
China’s second and third biggest US-listed hotel firms, 7 Days (NYSE: SVN) and China Lodging (Nasdaq: HTHT), have just released their latest quarterly results, showing that growth has returned to the industry after a difficult 2011, but that competition remains stiff with room for more consolidation. The results are really quite a mixed bag, but both companies showed healthy revenue growth, with Seven Days’ top line up 30 percent and China Lodging, operator of the Hanting hotel chain, up an even stronger 53 percent. (7 Days announcement; China Lodging announcement) But their bottom lines both looked quite weak, with 7 Days reporting a small profit of about $3 million while China Lodging slipped into the red with a loss of about $1.5 million. In terms of outlook, both companies saw revenue growth continuing at about 30 percent, the result of aggressive expansion and growing demand from newly affluent Chinese consumers with extra money to spend on traveling. In terms of broader context, the budget hotel industry is clearly not a very profitable one, as reflected by China Lodging’s reporting of a loss and the fact that 7 Days’ profit was just 3.5 percent of total revenues. Shareholders seem to have liked the 7 Days results a bit more, bidding up the company’s shares 4 percent after it announced the figures while China Lodging’s shares were unchanged. Still, shares of both companies now trade near 52-week lows, reflecting the challenging environment for a sector that is both promising in terms of growth but also quite competitive and in need of consolidation. The sector turned in a disappointing 2011 after a boom the previous year when occupancy and room rates soared largely due to a big jump in business in Shanghai during the city’s World Expo. We started to see some consolidation after that, with industry leader Home Inns (Nasdaq: HMIN) buying smaller chain Motel 168 for about $500 million last year, and 7 Days buying another small chain called Huatian for a more modest $20 million. (previous post) But with many of the big global names like France’s Accor (Paris: AC) and Britain’s InterContinental (London: IHG) also getting into the budget space, competition is likely to remain intense. Accordingly, look for more consolidation to occur, with smaller money-losing chains the likeliest targets and even a bigger name like China Lodging potentially getting purchased over the next 2 years.
Bottom line: The latest results from 7 Days and China Lodging show a growing but highly competitive budget hotel sector, with accelerating consolidation likely in the next 2 years.
Related postings 相关文章:
◙ China Lodging: Rebound Ahead 中国经济型酒店业绩回升在望
◙ Hotel Consolidation Moves Ahead With 7 Days Deal 七天连锁酒店收购表明酒店业整合继续
News Digest: March 10-12, 2012 报摘： 2012年3月10-12日
The following press releases and media reports about Chinese companies were carried on March 10-12. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
◙ MIIT to Allow Private-sector Investment in Telecom Infrastructure (English article)
◙ Zhejiang Geely, Volvo in Technology Transfer MOU (HKEx announcement)
◙ Home Inns (Nasdaq: HMIN) Reports Q4 and Full Year 2011 Results (PRNewswire)
◙ China Car Sales Have Worst Start Since 2005 as Economy Slows (English article)
◙ Vipshop Sets IPO Share Price Range at $8.5 to $10.5, to Raise Maximum $120 Mln (Chinese article)
◙ Latest calendar for Q4 earnings reports (Earnings calendar)
Hotels: Expo Hangover Set to Linger into 2012
China’s hotel operators have been suffering from an “Expo hangover” for much of this year, as room prices dip sharply in the key Shanghai market after business returned to more normal from inflated levels during the city’s 6-month-long mega-event in 2010. Most were expecting the hangover to start easing in the fourth quarter of this year as the Expo effect faded, though early signals from 7 Days (NYSE: SVN), the first operator to report third-quarter results, seem to indicate the headache could continue a while longer. The company, based in Guangzhou and therefore less exposed to the Expo effect than peers like Shanghai-based Home Inns (Nasdaq: HMIN), saw its third-quarter total net revenue jump 33 percent year-on-year, even as its profit dipped 26 percent on lower occupancy and room rates and higher expenses. (company announcement) The company blamed the Expo for the profit decline, but perhaps more worrisome was its fourth-quarter forecast for revenue to grow just 22 percent, a sharp slowdown from the third-quarter’s 33 percent growth rate. In fact, I would have expected just the opposite, for revenue growth to accelerate in the fourth-quarter with the fading of the difficult comparisons from 2010, since the Expo officially closed in October that year. Thus the fact that revenue growth is slowing may reflect broader problems for the industry, possibly due to a slowdown in travel resulting from the government’s efforts to cool the economy. It’s hard to say if this is a company- or industry-specific issue until we see more results. But in the meantime, investors are also worried, with 7 Days shares dipping 4 percent on Wednesday in New York and Home Inns down an even sharper 7 percent, amid a broader market sell-off. It seems the hangover may linger for a while still.
Bottom line: New results and guidance from 7 Days hint that the hotel industry’s Expo hangover could extend into 2012.
Related postings 相关文章:
◙ China Hotels: Is the Holiday Over?
◙ Ctrip’s Latest Initiative: Insurance 携程新举动：保险
◙ Hotel Consolidation Moves Ahead With 7 Days Deal 七天连锁酒店收购表明酒店业整合继续
China Hotels: Is the Holiday Over?
7 Days (NYSE: SVN) has just reported its second-quarter results, becoming the last of China’s top 3 budget hotel operators to report on a landscape that looks like the holiday may be over for these former high-flyers. Among the trio, which also includes Home Inns (Nasdaq: HMIN) and Hanting hotels operator China Lodging Group (Nasdaq: HTHT), only 7 Days reported respectable revenue growth of 42 percent for the quarter, with China Lodging reporting 25 percent growth and Home Inns reporting 12 percent. But more worrisome, all 3 said they expect the growth rate to slow in the third quarter, and both Home Inns and China Lodging lowered their 2011 revenue outlook by about 16 percent. (7 Days results; Home Inn results; China Lodging results) It’s probably too soon to say the big-growth days are finished for the budget hotel sector, which expanded rapidly in the last 5 years as millions of newly mobile Chinese took to the roads for both business and leisure travel. All 3 companies saw especially strong growth in last year’s second and third quarters during the Shanghai Expo, and cited the “Expo effect” as partly responsible for this year’s slowdown as business returns to more normal levels. (previous post) Still, the fact that 2 of the 3 companies lowered their full-year guidance means the post-Expo slowdown is worse than expected, possibly due to Beijing’s ongoing efforts to try and slow its racing economy. Consolidation in the sector seems inevitable, with both Home Inns and 7 Days announcing recent acquisitions to improve their scale and performance. (previous post) That said, a return to better growth for all 3 looks inevitable starting in the fourth quarter, when both Home Inns and 7 Days will start to include their acquisitions in their results and when the Expo hangover effect will finally be in the past.
Bottom line: China’s budget hotel operators will post weak results through the third quarter, but will return to more robust growth by year end as the Expo effect fades.
Related postings 相关文章:
◙ Hotel Consolidation Moves Ahead With 7 Days Deal 七天连锁酒店收购表明酒店业整合继续
