Home Inns Q3 Net Gains 6% QoQ on 9% Rev Growth

Home Inns & Hotels Management (Nasdaq:HMIN) recorded RMB 144.56 million in net income in the third quarter of 2010, or diluted earnings per ADS for the quarter of RMB 3.42, the company reported November 11. Total revenues for the third quarter increased 20.9% y-o-y to RMB 879.52 million, within previous guidance of RMB 875 million to RMB 895 million. Home Inns recorded an occupancy rate of 96.7% in the quarter, down from 97% in the year-ago period but up from 96.4% on a quarterly basis, while revenue per available room RevPAR rose annually and sequentially to RMB 183 in the quarter due to increased average daily rates coinciding with the Shanghai Expo, the report said. During the three-month period, Home Inns opened 55 new hotels, 15 of which are directly operated, bringing the company's total network by the end of September to 728 hotels.

Home Inns expects total revenues for the fourth quarter of RMB 795 million to RMB 815 million, representing a 14-17% y-o-y increase. The company reiterated predicted full year revenue growth of 20-24% y-o-y, and said it also expects to meet its 2010 target of opening 65-70 directly operated hotels and 130-135 franchises, and aims to open at least 250 new hotels in 2011, according to the report.

In a separate statement the same day, Home Inns announced that it will launch a new mid-range hotels chain under the brand Yitel, or "Heyi" in Chinese, led by Chief Strategy Officer May Wu. The company expects to open three to four Yitel hotels in 2011 and targets 50 hotels in the next four to five years, the report said.