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TheStreet Open House
China Lodging Group Ltd
HTHT : NASDAQ : Services
$25.82 | %
Today's Range: 25.26 - 26.10
Avg. Daily Volume: 123,500
09/19/14 - 3:59 PM ET

Financial Analysis


CHINA LODGING GROUP LTD -ADR's gross profit margin for the second quarter of its fiscal year 2014 has decreased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. CHINA LODGING GROUP LTD -ADR has very weak liquidity. Currently, the Quick Ratio is 0.46 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 14.24% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY14 Q2 FY13
Net Sales ($mil)201.35170.28
EBITDA ($mil)46.739.36
EBIT ($mil)24.5820.95
Net Income ($mil)20.0215.7


Balance Sheet Q2 FY14 Q2 FY13
Cash & Equiv. ($mil)110.5650.77
Total Assets ($mil)936.13744.01
Total Debt ($mil)48.360.2
Equity ($mil)480.31420.41


Profitability Q2 FY14 Q2 FY13
Gross Profit Margin36.4738.54
EBITDA Margin23.1923.11
Operating Margin12.2112.3
Sales Turnover0.80.81
Return on Assets5.174.59
Return on Equity10.078.13
Debt Q2 FY14 Q2 FY13
Current Ratio0.80.78
Debt/Capital0.090.0
Interest Expense0.050.03
Interest Coverage481.86616.12


Share Data Q2 FY14 Q2 FY13
Shares outstanding (mil)61.8961.12
Div / share0.00.0
EPS0.320.25
Book value / share7.766.88
Institutional Own % n/a n/a
Avg Daily Volume122983.0156784.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 53.54 for the Hotels, Restaurants & Leisure industry and a significant premium compared to the S&P 500 average of 19.94. Conducting a second comparison, its price-to-book ratio of 3.33 indicates a premium versus the S&P 500 average of 2.76 and a significant discount versus the industry average of 38.85. The price-to-sales ratio is above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, CHINA LODGING GROUP LTD -ADR proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HTHT 33.56 Peers 53.54   HTHT NA Peers 22.48

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

HTHT is trading at a significant discount to its peers.

 

Neutral. The P/CF ratio is the stock’s price divided by the sum of the company's cash flow from operations. It is useful for comparing companies with different capital requirements or financing structures.

Ratio not available.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HTHT 3.68 Peers 27.08   HTHT 0.05 Peers 0.97

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

HTHT is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HTHT trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HTHT 3.33 Peers 38.85   HTHT 40.00 Peers 40.04

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HTHT is trading at a significant discount to its peers.

 

Average. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

HTHT is expected to keep pace with its peers on the basis of earnings growth.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HTHT 2.14 Peers 2.94   HTHT 24.49 Peers 8.04

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HTHT is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

HTHT has a sales growth rate that significantly exceeds its peers.

 

 

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