Why Shares of Home Inns & Hotels Management Inc. Got Dumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Home Inns & Hotels Management  (NASDAQ: HMIN  ) fell as much as 13%, and finished down 11% today after reporting fourth-quarter earnings last night.

So what: The Chinese motel-operator said revenue grew 9.8%, to $265.9 million, and earnings came in at 1.91 RMB versus estimates at 1.99 RMB. CEO David Sun acknowledged "the weak market environment" and "near term challenges in the macro environment," but said, "We continue to believe in the long-term growth prospects of China's travel and lodging industry." Sun also noted that Home Inns revenue growth has slowed due to a transition from a leasing and operating model to a franchise model, which should be a path to sustained profits.

Now what: Home Inns continues to expand at a rapid pace, adding 139 in the quarter, bringing the total to 2,180, and has 417 more hotel projects in the pipeline. As China's middle class gorws, the demand for budget lodging should increase along with it, and Home Inns' franchise, like that of American motel companies, seems poised to benefit from this organic growth. Revenue guidance, however, was a bit weak, as the company expects 7% to 10.2% increase in the top line, below estimates of 12.6%.

This could be bad news for China
For the first time since the early days of this country, we're in a position to dominate the global manufacturing landscape thanks to a single, revolutionary technology: 3-D printing. Although this sounds like something out of a science fiction novel, the success of 3-D printing is already a foregone conclusion to many manufacturers around the world. The trick now is to identify the companies -- and thereby the stocks -- that will prevail in the battle for market share. To see the three companies that are currently positioned to do so, simply download our invaluable free report on the topic by clicking here now.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2875498, ~/Articles/ArticleHandler.aspx, 8/23/2014 2:07:10 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement