5. China Lodging Group, through its subsidiaries, operates economy hotel chains in China. The hotel company has 243 leased-and-operated hotels and 195 franchised-and-managed hotels, as of Dec. 31, 2010. Moreover, as of the same date, it has 9 leased-and-operated hotels and 93 franchised-and-managed hotels under development.
The 10 analysts covering the stock recommend a buy. On average, analysts estimate a 34.7% upside to $25.0 from current levels.
For the latest fourth quarter, the company reported earnings of $5.3 million, or 9 cents per share, as compared to $3.0 million, or 6 cents per share in the year-ago quarter. Also, revenue for the period soared 29.2% to $72.5 million. During the quarter, the company launched 70 hotels, closing 2010 with 438 hotels in 65 cities across China. Earnings for 2010 stood at $32.7 million on revenue of $278.5 million. Meanwhile, RevPar for 2010 increased 12% year-over-year.Heading into first quarter 2011, China Lodging expects net revenue of $62.4 to $65.5 million, up 20%-26% from the first quarter of 2010. Revenue growth for full-year 2011 is expected between 34% and 38%, compared to $278.5 million recorded in 2010. Furthermore, to leverage Chinese consumers growing penchant for travel, the company plans to add 200 new hotels. As per a traveldailynews.com research report China Tourism Industry Forecast to 2012, domestic travel is likely to boom in China during the period 2011-2013. Meanwhile, emarketer.com pegs online travel bookings in China at $15.4 billion in 2011, zooming from $1.5 billion recorded in 2006. China--the world's fourth top destination for tourism--plans to build more hotels and motels across the country to meet rising demand.