Wall Street to Welcome China Lodging Group IPO

| About: China Lodging (HTHT)
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China Lodging Group (NASDAQ:HTHT), an economy hotel chain in China, is expected to price its IPO this week.

Business Overview (from prospectus)

We operate a leading economy hotel chain in China. We mainly utilize a lease-and-operate model, under which we directly operate hotels that are typically located in prime locations of selected cities. We also employ a franchise-and-manage model, under which we manage franchised hotels, to expand our network coverage. We apply a consistent standard and platform across all of our hotels. As of December 31, 2009, we had 173 leased-and-operated hotels and 63 franchised-and-managed hotels. In addition, as of the same date, we had 21 leased-and-operated hotels and 123 franchised-and-managed hotels under development.

Offering: 9 million shares at $10 - $12 per share. Approximately 90% of the net proceeds will be used for hotel network expansion.

Lead Underwriters: Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS)

Financial Highlights:

Total revenues increased by 64.7% from RMB809.9 million in 2008 to RMB1,333.9 million in 2009...Total operating costs and expenses increased by 29% from RMB917.9 million in 2008 to RMB1,183.8 million in 2009...Income from operations of RMB76.4 million in 2009 compared to a loss from operations of RMB153.7 million in 2008...Net income of RMB42.5 million in 2009 compared to net loss of RMB136.2 million incurred in 2008...


The economy hotel industry in China is highly competitive. We face significant competition from other domestic and international economy hotel operators in China. Our main competitors include Home Inns (NASDAQ:HMIN), Jinjiang Inn, Motel 168, 7 Days Inn, various regional and local economy hotels, and certain international brands. We also compete with other accommodations such as two and three star hotels. In addition, we may face competition from new players in the economy hotel industry in China. We believe that competition is generally based on location, room rates, brand recognition, the quality of accommodations, service levels and the convenience of the central reservation system.

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