China Lodging Profit Rises - Update

(RTTNews) - Hotel chain China Lodging Group Ltd. (HTHT), Tuesday reported an increase in profit for the fourth quarter, helped mainly by a surge in revenues and better margins.

Shanghai-based China Lodging's fourth-quarter profit rose to 58.5 million yuan or 0.93 yuan per ADS from 18.2 million yuan or 0.29 yuan per ADS last year. On a U.S. dollar basis, earnings were $9.7 million or $0.15 per ADS.

Adjusted earnings for the quarter were 1.03 yuan per ADS or $0.17.

On average, three analysts polled by Thomson Reuters estimate earnings of 0.69 yuan per ADS for the quarter. Analysts' estimates typically exclude one-time items.

China Lodging's revenues grew 26.8 percent to 1.12 billion yuan from 883.20 million yuan last year. Analysts expected revenues of 1.11 billion yuan for the quarter. On a US dollar basis, revenues were $185.0 million.

ADR, or the average daily rate for all hotels in operation improved to 178 yuan from 176 yuan last year. Occupancy rate dropped to 90 percent in the fourth quarter from 92.1 percent last year.

Revenue per available room, an important industry metric of occupancies and rates, dropped to 160 yuan from 162 yuan a year ago. The company said it operated a total of 1,425 hotels or 152,879 hotel rooms in as of December 31, 2013.

Operating margin for the fourth quarter advanced to 7.6 percent from 3.3 percent last year.

Looking ahead to the first quarter, the company expects revenues of 1.03 billion yuan to 1.05 billion yuan. Analysts currently expect first quarter revenues of 1.07 billion yuan.

"We remain positive on the growing trend of travel demand in China, especially with a significant growth from leisure travel demand in recent years. Our brand portfolio is well-positioned to meet the diversified needs of customers who seek good value for their money," said Chief Executive Qi Ji said.

The company plans to add 420 to 450 leased and "manachised" hotels in 2014.

China Lodging Group operates a chain of limited-service hotels in China under JI Hotel, Starway Hotel, HanTing Hotel, and Hi Inn chain.

HTHT closed Tuesday's trading at $26.73, down $0.24 or 0.89%, on the Nasdaq. The stock, however gained $0.59 or 2.21%, in after hours trade.