Home Inns & Hotels (NASDAQ:HMIN)

First Quarter of 2012 Financial Highlights

• Total revenues increased 66.0% year over year to RMB 1,255.7 million (US$199.4 million). Excluding Motel 168 (acquired and fully consolidated starting October 1, 2011) total revenue increased 22.7% year over year to RMB 928.4 million.
  
• Loss from operations was RMB 36.9 million (US$5.9 million). Adjusted income from operations was RMB 9.7 million (US$1.5 million), compared to RMB 60.0 million in the same period of 2011.
  
• Net loss attributable to Home Inns' shareholders was RMB 103.2 million (US$16.4 million) which includes a net loss of RMB 53.2 million (US$8.4 million) from Motel 168, compared to a net income of RMB 32.5 millionin the first quarter of 2011.
  
• EBITDA (non-GAAP) was RMB 93.1 million (US$14.8 million), compared to RMB 137.5 million in the same period of 2011. Excluding non-operating items and one-time charges, adjusted EBITDA (non-GAAP) increased to RMB 165.9 million (US$26.3 million) from RMB 152.5 million in the first quarter of 2011.
  
• Diluted losses per ADS for the first quarter of 2012 were RMB 2.28 (US$0.36); adjusted diluted losses per ADS (non-GAAP) for the first quarter were RMB 0.54 (US$0.09).

"Despite seasonality and relatively lethargic market environment, our core mature hotels maintained stable performance during the past quarter," said Mr. David Sun, Home Inns' Chief Executive Officer. "Due to margin impact by new hotels opened in the late fourth quarter of 2011, higher pre-opening costs, near-term profitability dilution by Motel 168 and non-recurring acquisition-related charges, we experienced an overall net loss in the first quarter. This was, however, within our expectations and there were no surprises."

"Based on what we are experiencing in current operations and the integration results we achieved so far, we remain optimistic about the full year's outlook. As new hotels ramp up, Motel 168 further improves its operations and our control mechanisms continue to address rising costs, we are confident of the Company's ability to generate profitable growth and sustained return for our shareholders."

Home Inns completed its acquisition of 100% equity interest in Motel 168, and took control of Motel 168 effective on October 1, 2011. The Company has consolidated Motel 168's operating and financial results since October 1, 2011. Home Inns presents certain separated financial data of Motel 168 in this earning release, for the purpose of providing more information to investors, and will continue to provide separated financial data of Motel 168 through the 2012 fiscal year.

Outlook for Second Quarter 2012

Home Inns expects total revenues for the group in the second quarter of 2012 to be in the range of RMB 1,430 million to (US$227.1 million) to RMB 1,460 million (US$231.8 million).

Total revenues for Motel 168 brand in the second quarter of 2012 are expected to be in the range of RMB 390 million (US$61.9 million) to RMB 400 million (US$63.5 million).

Excluding Motel 168, total revenues in the second quarter of 2012 are expected to be in the range of RMB 1,040 million (US$165.1 million) to RMB 1,060 million (US$168.3 million).

This forecast reflects Home Inns' current and preliminary view, which is subject to change. Our revenue and new hotel openings guidance for the full year 2012 remains unchanged.

Fourth Quarter 2011 Financial Highlights

• Home Inns began to consolidate Motel 168 results starting October 1, 2011. Integration of Motel 168 is on track.
• Total revenues increased 64.2% year over year to RMB 1,309.9 million (US$208.1 million).
• Net income attributable to Home Inns' shareholders was RMB 32.7 million (US$5.2 million) which includes a net loss of RMB 17.5 million (US$2.8 million) from Motel 168, compared to RMB 33.0 million in 2010.
• Income from operations was RMB 33.2 million (US$5.3 million). Adjusted income from operations was RMB 78.5 million (US$12.5 million), compared to RMB 116.1 million in the same period of 2010. The operating cost structure of the core business remained stable and profitability remained in line after taking into account the one-time benefit of Shanghai World Expo in 2010 and higher pre-opening expenses.
• EBITDA (non-GAAP) increased to RMB 229.2 million (US$36.4 million) from RMB 132.2 million year over year. Excluding non-operating items and one-time charges, adjusted EBITDA (non-GAAP) was RMB 227.4 million (US$36.1 million), compared to RMB 201.3 million in 2010 which was boosted by 2010 Shanghai World Expo.
• Diluted losses per ADS for the fourth quarter of 2011 were RMB 0.12 (US$0.02); adjusted diluted earnings per ADS (non-GAAP) for the current quarter were RMB 0.73 (US$0.12).

"In 2011, Home Inns accomplished several important milestones. Not only did we build a portfolio of over 1,000 hotels by 2011, a goal we set 5 years ago, we exceeded our target of new hotel openings for the year with 306 new hotels, we launched and expanded our mid-scale Yitel brand, we furthered our multi-brand strategy and acquired Motel 168," said Mr. David Sun, Home Inns' Chief Executive Officer. "Across a total of 1,426 hotels across 212 cities in China, we delivered solid operating performance with consistent year-over-year revenue growth and maintained strong profitability even when the macroeconomic environment softened in the latter part of the year."

Mr. Sun continued, "As we move into our tenth year of operation, we will continue to concentrate on growing a healthy portfolio and developing our multi-brand strategy. The integration of Motel 168 is on track, and we are already seeing operational improvements. We are confident that Motel 168 will contribute significantly to the long-term performance of the company. In 2012 we plan to open 330 to 360 new hotels spread across our three brands, while at the same time implementing initiatives to improve productivity and efficiency across our network of hotels. Overall, we are pleased with the evolution of the business and believe our clearly-defined growth strategy, proven execution and sound investments well position Home Inns to capture the growth opportunities in the Chinese travel industry in 2012 and beyond."

Outlook for First Quarter and Full Year 2012

Home Inns expects to open 330 to 360 new hotels in 2012, including approximately 105-125 leased-and-operated hotels (including three to five Motel 168 hotels) and 225-235 franchised-and-managed hotels (including 27 to 35 Motel 168 hotels).

Home Inns expects total revenues for the group for 2012 to be in the range of RMB 5,815 million (US$923.9 million) to RMB 5,910 million (US$939.0 million), representing a growth of 46.9% to 49.3% over 2011. Total revenues for the group in the first quarter of 2012 are expected to be in the range of RMB 1,210 million (US$192.2 million) to RMB 1,240 million (US$197.0 million).

Total revenues for Motel 168 brand for 2012 are expected to be in the range of RMB 1,575 million (US$250.2 million) to 1,600 million (US$254.2 million). Total revenues for Motel 168 brand in the first quarter of 2012 are expected to be in the range of RMB 320 million (US$50.8 million) to RMB 330 million (US$52.4 million).

Excluding Motel 168, total revenues for 2012 are expected to be in the range of RMB 4,240 million (US$673.7 million) to RMB 4,310 million (US$684.8 million). Excluding Motel 168, total revenues in the first quarter of 2012 are expected to be in the range of RMB 890 million (US$141.4 million) to RMB 910 million (144.6 million).

This forecast reflects Home Inns' current and preliminary view, which is subject to change

Third Quarter 2011 Financial Highlights

• Total revenue for the third quarter of 2011 was RMB 988.0 million (US$154.9 million) representing a 12.3% year-over-year increase, exceeding the guidance range of RMB 955 million to RMB 975 million, with most of the mature hotels outside of Shanghai achieved better than expected revenue performance through moderate price increases.
• Net income attributable to Home Inns' shareholders for the third quarter of 2011 was RMB 164.3 million (US$25.8 million). Net income was reduced by share-based compensation expenses of RMB 20.1 million (US$3.1 million), foreign exchange loss of RMB 0.8 million (US$0.1 million), corporate spending related to the concluded acquisition of Motel 168 International Holdings Limited ("Motel 168") of RMB 41.4 million (US$6.5 million) and the withholding tax for distributable earnings from previous periods of RMB 26.7 million (US$4.2 million), and increased by gain from fair value change of convertible notes of RMB 121.2 million (US$19.0 million). This compared to a net income attributable to Home Inns' shareholders of RMB 144.6 million in the third quarter of 2010, which was reduced by share-based compensation expenses of RMB 14.2 million and foreign exchange loss of RMB 1.7 million. Given considerations for non-operational accounting charges and one-time items, overall profit margin is in line with normal historical performance level.
• Diluted earnings per ADS for the third quarter of 2011 were RMB 0.61 (US$0.10); adjusted diluted earnings per ADS (non-GAAP) for the current quarter were RMB 2.86 (US$0.45) vs US$0.57

"We are pleased to report higher than expected revenue results for the third quarter, due primarily to better than expected performance and continued operational improvements from our mature hotels outside of Shanghai," said Mr. David Sun, Home Inns' Chief Executive Officer. "We opened our 1,000th Home Inn hotel during the third quarter which is a significant milestone in our growth history. The addition of Motel 168 and its more than 290 hotels solidifies our leadership position in the economy hotel industry in China, as well as further strengthens our diverse growth plans and multi-brand strategy. We are optimistic about the steady growth trend in the overall business and leisure travel in China despite uncertainties that may exist in the macroeconomic environment. With our operational know-how, discipline and agility in our investment and development plans, Home Inns is well-positioned to take advantage of the vast opportunities across Chinese market over the long term."

Outlook for the Fourth Quarter 2011

Home Inns expects its total revenues on a comparable basis in the fourth quarter of 2011 to be in the range of RMB 995 million (US$156.0 million) to RMB 1,015 million (US$159.1 million), representing a 25%-27% year-over-year increase without taking into account the revenue contribution by Motel 168.

Home Inns will consolidate Motel 168's financial results starting October 1, 2011. Home Inns expects the revenue contribution from Motel 168 to be in the range of RMB 355 million to RMB 375 million for the fourth quarter of 2011. The consolidated total revenues in the fourth quarter of 2011 are expected to be in the range of RMB 1,350 million (US$211.7 million) to RMB 1,390 million (US$217.9 million). This forecast reflects Home Inns' current and preliminary view, which is subject to change.

SHANGHAI, Sept. 2, 2011 /PRNewswire-Asia/ -- Home Inns & Hotels Management Inc. ("Home Inns", Nasdaq: HMIN), a leading economy hotel chain in China, today announced that it has received anti-trust approval from the Ministry of Commerce of the People's Republic of China for its proposed acquisition of Motel 168 International Holdings Limited ("Motel 168"), one of the major branded economy hotel operators in China. With this development, Home Inns now expects to close the acquisition by the end of the third quarter of 2011, subject to all other closing conditions being satisfied.

Home Inns announced on May 27, 2011 that it had entered into a definitive agreement to acquire 100% ownership interest in Motel 168 for a total of US$470 million, consisting of approximately US$305 million in cash, and 8.15 million Home Inns' ordinary shares at a price equivalent to a per-ADS price of7  US$40.3(each Nasdaq-traded Home Inns' ADS represents two ordinary shares) to be issued at the time of closing. The cash portion will be funded with Home Inns' cash on hand, as well as a new US$250 million four-year senior secured term loan. Credit Suisse and J.P. Morgan acted as financial advisors to Home Inns and mandated lead arrangers for the new term loan.

"We experienced a smooth and timely anti-trust approval process for the Motel 168 acquisition, and now expect the transaction to close earlier than the originally estimated fourth quarter," said Mr. David Sun, Chief Executive Officer of Home Inns. "We are very excited about this development, and look forward to a prompt closing and the addition of the Motel 168 business to our Company in the near future."

Second Quarter 2011 Results

Total revenue for the second quarter was RMB 905.2 million (US$140.1 million) representing a 12.2% year-over-year increase.

Diluted earnings per ADS for the quarter were RMB 1.71 (US$0.26); adjusted diluted earnings per ADS (non-GAAP) for the quarter were RMB 2.48 (US$0.38).

We expect to incur an additional RMB 167.3 million (US$25.3 million) in capital expenditures in connection with the completion of the leasehold improvements of these hotels. We intend to fund this planned expansion with our operating cash flow, our existing cash balance and bank credit facilities.

We have been able to meet our working capital needs, and we believe that we will be able to meet our working capital needs in the foreseeable future, with our operating cash flow, existing cash balance and bank credit facilities.

SHANGHAI, May 27, 2011 /PRNewswire-Asia/ -- Home Inns & Hotels Management Inc. ("Home Inns", Nasdaq: HMIN) today announced that it has entered into a definitive agreement to acquire 100% ownership interest in Motel 168 International Holdings Limited ("Motel 168") for a total of US$470 million with approximately US$305 million in cash, and 8.15 million Home Inns' ordinary shares at a price equivalent to a per-ADS price of US$40.37 (each Nasdaq traded Home Inns' ADS represents two ordinary shares) to be issued at the time of closing (the "Transaction"). Home Inns will grant customary registration rights to the sellers in connection with the Home Inns ordinary shares issuance.

Motel 168 is one of the major branded economy hotel operators with 144 leased-and-operated locations and 137 franchised-and-managed hotels, with a total of 45,669 rooms in 81 cities across China as of today. The majority of Motel 168's portfolio is operated under the flagship Motel 168 brand, which is well-known among domestic business and leisure travelers, particularly in Shanghai and the eastern coastal regions. A selected number of locations are operated or co-operated under Motel 168's Motel 268 and Yotel QQ brands. Motel 168 generated gross revenue of $262 million in the financial year ending December 31, 2010.

The Transaction represents a unique strategic combination of the portfolios of Home Inns and Motel 168, and will create the most geographically diverse economy hotel operation in China. Consistent with Home Inns' strategy of developing multi-brands, Motel 168 will provide an attractive and complementary brand portfolio for Home Inns to increase its scale and expand its scope.

Home Inns plans to retain and operate the Motel 168 brand and leverage its proven operational expertise to enhance existing Motel 168 hotels' performance, as well as to further develop and expand the Motel 168 hotel portfolio. Home Inns does not expect this Transaction to cause any deviation from its existing business development and operational plans for the Home Inns or Yitel brands.

"We are excited to have the opportunity to bring Motel 168, a well-established domestic economy hotel chain, into Home Inns' portfolio, and look forward to working with the Motel 168 management team to ensure timely closing of the transaction, smooth post closing integration, and future growth of the business," said Mr. David Sun, Home Inns' Chief Executive Officer. "We are confident that through this Transaction, we will create long term value for our shareholders, who will include funds managed by Morgan Stanley Real Estate Investing (MSREI) and other previous shareholders of Motel 168."

"We believe in the attractiveness of the China economy hotel industry and Home Inns' long term leadership position," commented Mr. Hoke Slaughter, Managing Director and Head of Morgan Stanley's Real Estate Investment Business in Asia.

NEW YORK, May 20, 2011 /PRNewswire-Asia/ -- Home Inns & Hotels Management Inc. (NASDAQ: HMIN) today announced that it has filed an automatic shelf registration statement on Form F-3 under the United States Securities Act of 1933, as amended, with the U.S. Securities and Exchange Commission. The registration statement registers resales by persons named therein of the Company's 2.00% convertible senior notes due 2015 and the Company's ordinary shares represented by American Depositary Shares (ADSs) issuable upon conversion of the notes.  The registration statement also registers resales of ordinary shares represented by ADSs by shareholders named in the registration statement. The registration statement became effective upon filing.

First Quarter Results:

• Total revenues for the first quarter increased 10.8% year over year to RMB 756.6 million (US$115.5 million).
• Net income attributable to Home Inns' shareholders for the quarter was RMB 32.5 million (US$5.0 million).  Net income was reduced by share-based compensation expenses of RMB 17.0 million (US$2.6 million), foreign exchange loss of RMB 1.6 million (US$0.2 million), one-time corporate spending of RMB11.5 million (US$1.8 million) and, increased by gain from fair value change of convertible notes of RMB 15.1 million (US$2.3 million). This compared to a net income attributable to Home Inns' shareholders of RMB 46.1 million in the first quarter of 2010, which was reduced by share-based compensation expenses of RMB 9.4 million, foreign exchange loss of RMB 0.3 million and, increased by gain on buy-back of convertible bonds of RMB 0.5 million.
• Income from operations for the quarter was RMB 31.5 million (US$4.8 million), compared to that of RMB 61.6 million in the same period of 2010.  Income from operations excluding share-based compensation expenses (non-GAAP) was RMB 48.5 million (US$7.4 million) for the quarter, compared to RMB 71.0 million in the same period of 2010.  The anticipated new hotels' dilutive impact, high pre-opening costs and one-time spending gave rise to unfavorable impact on overall income from operations.  
• EBITDA (non-GAAP) for the quarter was RMB 137.5 million (US$21.0 million).  Excluding any share-based compensation expenses, foreign exchange loss, gain on buy-back of convertible bonds and gain from fair value change of convertible notes, adjusted EBITDA (non-GAAP) for the quarter was RMB 141.0 million (US$21.5 million), compared to RMB 154.9 million for the same period of 2010.
• Diluted earnings per ADS for the quarter were RMB 0.11 (US$0.02); adjusted diluted earnings per ADS (non-GAAP) for the quarter were RMB 0.79 (US$0.12).

"Despite seasonality and dilutive impact of new hotels, we achieved our operational targets as business and leisure travel volume trended up and returning to normal after the Chinese New Year's holiday.  More importantly, our development pipeline strengthened significantly, positioning us well to deliver on our growth commitment for the year and the longer term." said Mr. David Sun, Home Inns' Chief Executive Officer.  

Home Inns expects its total revenues in the second quarter of 2011 to be in the range of RMB 905 million (US$138.2 million) to RMB 925 million (US$141.3 million), representing a 12-15% year-over-year increase. This forecast reflects Home Inns' current and preliminary view, which is subject to change.  Our revenue guidance for the full year 2011 remains unchanged.

Fourth Quarter 2010 Financial Highlights

• Total revenues for the fourth quarter increased 14.2% year over year to RMB 797.9 million (US$120.9 million), within the guidance range of RMB 795 million to RMB 815 million.
• Net income attributable to Home Inns' shareholders for the quarter was RMB 33.0 million (US$5.0 million). Net income was reduced by share-based compensation expenses of RMB 15.7 million (US$2.4 million), foreign exchange loss of RMB 1.9 million (US$0.3 million), loss from fair value change of convertible bond of RMB 9.0 million (US$1.4 million) and one-time charge of issuance costs for convertible bond of RMB 42.6 million (US$6.4 million). This compared to a net income attributable to Home Inns' shareholders of RMB 68.4 million in the fourth quarter of 2009, which was reduced by share-based compensation expenses of RMB 9.8 million and gain on buy-back of convertible bond of RMB 2.1 million.
• Income from operations for the quarter was RMB 100.4 million (US$15.2 million), compared to that of RMB 83.1 million in the same period of 2009. Income from operations excluding share-based compensation expenses (non-GAAP) increased 25% to RMB 116.1 million (US$17.6 million) for the quarter, compared to RMB 92.9 million in the same period of 2009.
• EBITDA (non-GAAP) for the quarter was RMB 132.2 million (US$20.0 million). Excluding any share-based compensation expenses, foreign exchange loss, issuance costs for convertible bond and loss from fair value change of convertible bond, adjusted EBITDA (non-GAAP) for the quarter was RMB 201.3 million (US$30.5 million), compared to RMB 177.0 million for the same period of 2009, representing a year-over-year increase of 13.7%.
• Diluted earnings per ADS for the quarter were RMB 0.78 (US$0.12); adjusted diluted earnings per ADS (non-GAAP) for the quarter were RMB 2.40 (US$0.36).

This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.6000 to US$1.00, the effective noon buying rate as of December 31, 2010 in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York.

Diluted earnings per ADS and adjusted diluted earnings per ADS (non-GAAP) exclude gain on buy-back of convertible bond and interest expenses related to the convertible bond issued in December 2007. Adjusted diluted earnings per ADS (non-GAAP) also exclude foreign exchange loss, share-based compensation expenses, issuance costs for convertible bond and loss from fair value change of convertible bond. Please refer to "Reconciliations of GAAP and Non-GAAP Results" at the end of this press release.

Full Year Financial 2010 Highlights

• Total revenues for the year increased 21.8% year over year to RMB 3.17 billion (US$ 479.9 million), within the guidance range of 20-24% year-over-year growth.
• Net income attributable to shareholders for the year was RMB 359.5 million (US$ 54.5 million). Net income was reduced by share-based compensation expenses of RMB 53.3 million (US$ 8.1 million), foreign exchange losses of RMB 4.4 million (US$ 0.7 million), issuance costs for convertible bond of RMB 42.6 million (US$6.4 million) and loss from fair value change of convertible bond of RMB 9.0 million (US$1.4 million), and increased by gain on buy-back of convertible bond of RMB 2.5 million (US$ 0.4 million). This compared to a net income attributable to shareholders of RMB 256.0 million in 2009, which was reduced by share based compensation expenses of RMB 32.0 million and foreign exchange losses of RMB 0.3 million and increased by gain on buy-back of convertible bond of RMB 69.3 million.
• Income from operations for the year was RMB 530.4 million (US$ 80.4 million), compared to RMB 241.6 million in the previous year. Income from operations excluding share-based compensation expenses (non-GAAP) increased by 113.3% to RMB 583.7 million (US$ 88.4 million) in 2010 from RMB 273.6 million in the previous year.
• EBITDA (non-GAAP) for the full year was RMB 812.0 million (US$ 123.0 million). Excluding any foreign exchange losses, share-based compensation expenses, gain on buy-back of convertible bond, issuance costs for convertible bond and loss from fair value change of convertible bond, adjusted EBITDA (non-GAAP) was RMB 918.8 million (US$ 139.2 million), compared to RMB 577.5 million for the same period a year ago, representing an increase of 59.1% year over year.
• Diluted earnings per ADS were RMB 8.45 (US$ 1.28); adjusted diluted earnings per ADS (non-GAAP) were RMB 11.00 (US$ 1.67).

"2010 was another year of achievements for Home Inns. The 208 new hotels that we opened in 2010 further solidified our leadership position in the Chinese economy hotel industry. We concluded the year delivering on our commitments to both top line growth and margin expansion," said Mr. David Sun, Home Inns' Chief Executive Officer. "Our total portfolio's strong performance was achieved through effective pricing and cost management, taking advantage of continued Chinese economic growth and stability. During the year, we reaccelerated our development activities; we launched our mid-scale hotel brand Yitel and we raised our target for new hotels to be opened in 2011 to be between 260 and 280."

Outlook for First Quarter and Full Year 2011

• Home Inns expects to open 260 to 280 new hotels in 2011, including approximately 100-110 leased-and-operated hotels and 160-170 franchised-and-managed hotels.
• Home Inns expects total revenues for 2011 to grow 18% to 20% over 2010.
• Total revenues in the first quarter of 2011 are expected to be in the range of RMB 755 million (US$114.4 million) to RMB 775 million (US$117.4 million). This forecast reflects Home Inns' current and preliminary view, which is subject to change.

SHANGHAI, Jan. 7, 2011 /PRNewswire-Asia/ -- Home Inns & Hotels Management Inc. today announced plans to open a total of 260 to 280 new hotels in 2011, of which 100 to 110 will be leased-and-operated hotels and 160 to 170 will be franchised-and-managed hotels.  In addition, as previously announced, Home Inns has set plans to enter into the midscale hotel segment in China with 3 to 4 new hotels in 2011 under a second brand, Yitel.

Third Quarter 2010Financial Highlights

• Total revenues for the third quarter increased 20.9% year over year to RMB 879.5 million (US$131.5 million), within the guidance range of RMB 875 million to RMB 895 million.
• Net income attributable to Home Inns' shareholders for the quarter was RMB 144.6 million (US$21.6 million), including share-based compensation expenses of RMB 14.2 million (US$2.1 million) and foreign exchange loss of RMB 1.7 million (US$0.3 million).  This compared to a net income attributable to Home Inns' shareholders of RMB 86.7 million in the third quarter of 2009, which included share-based compensation expenses of RMB 7.8 million and gain on buy-back of convertible bonds of RMB 4.3 million.
• Diluted earnings per ADS for the quarter were RMB 3.42 (US$0.51), while adjusted diluted earnings per ADS (non-GAAP) for the quarter were RMB 3.79 (US$0.57).

"Continuing with the second quarter momentum, we delivered another strong quarter.  The overall economic growth and market conditions in China remain stable.  This enabled performance enhancements in all Home Inns hotels.  Our system-wide RevPAR increased both year over year and sequentially," said Mr. David Sun, Home Inns' Chief Executive Officer.

 "Throughout the quarter, Shanghai World Expo provided event-driven premium to our hotels in Shanghai.  We are particularly excited to see the average daily rates for hotels outside of Shanghai also increased both year over year and sequentially.  This came as a result of our sound strategy in developing presence across China including lower tier markets with tremendous growth potential."

Outlook for Fourth Quarter of 2010

Home Inns expects its total revenues in the fourth quarter of 2010 to be in the range of RMB 795 million (US$118.8 million) to RMB 815 million (US$121.8 million), representing a 14-17% year-over-year increase.  

Our full year guidance of 20-24% revenue growth remains unchanged.  This forecast reflects Home Inns' current and preliminary view, which is subject to change.

'Home Inns has started to realize the benefits of the strategic decisions we made in response to the financial downturn, which has affected our business since the fourth quarter of 2008. Our prudent development plans and the maturity of the hotels we opened last year, together with higher than expected revenues due to the easing of the economic situation towards the end of the quarter, resulted in our improved overall operational performance and profitability,' remarked Mr. David Sun, Home Inns' Chief Executive Officer.

'We believe our business has entered into a phase of stability and gradual recovery. We are well-positioned to execute on our strategy and we are committed to achieving a balance between growth and profitability. During the second quarter, this balance allowed us to open 25 new hotels and enter six new markets, while still demonstrating improved operational metrics and financial performance,' continued Mr. Sun.

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

'Although we were not immune to the economic downturn, our business is relatively resilient as evidenced by the somewhat modest reduction in our operational metrics, which was within our expectations. As we entered into the seasonally stronger second quarter, we believe the impact from the slower economy will become more manageable,' continued Mr. Sun. 'Although our planned expansion into lower tier cities will continue to put pressure on our RevPAR, especially at an economically challenging time, we see this as a necessary strategy for our long term growth, and believe that as these cities continue to experience economic and population growth, Home Inns will be ideally positioned to benefit as the established leader in economy hotels in China.

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

"Although we were not immune to the economic downturn, our business is relatively resilient as evidenced by the somewhat modest reduction in our operational metrics, which was within our expectations. As we entered into the seasonally stronger second quarter, we believe the impact from the slower economy will become more manageable,' continued Mr. Sun. 'Although our planned expansion into lower tier cities will continue to put pressure on our RevPAR, especially at an economically challenging time, we see this as a necessary strategy for our long term growth, and believe that as these cities continue to experience economic and population growth, Home Inns will be ideally positioned to benefit as the established leader in economy hotels in China."

Source: PR Newswire (May 7, 2009)

 "2008 was a challenging year for us. Although we achieved our revenue and expansion targets, our operational metrics and bottom-line results were negatively impacted by a number of factors, including the recent economic slowdown," remarked Mr. David Sun, Home Inns' Chief Executive Officer. "Although there are still great uncertainties regarding the economic conditions and the demand for travel in China for 2009, we are now the clear leader in the economy hotels industry in China as evidenced by our large number of hotels, broad geographic coverage, and an ever-expanding Home Inns member network. We believe that our product continues to be affordable and appealing to business travelers under the current economic conditions. We will be prudent in our expansion strategy and financial planning at this time, but there is no change in our view on the large growth potential of China's economy hotel industry in the long term."

"We are taking a cautious stance at this time with regards to our near term development plan," concluded Mr. David Sun. "Given our ability to adjust our development plan with a lead time of only four to six months, we have the flexibility to adapt to changes in economic conditions if necessary. We remain keen on maintaining our leadership position in the industry."

Source: PR Newswire (March 5, 2009)

Guidance Report:

"The recent global economic situation has led to reduced business travel activities in China, and as a result, the Company experienced contraction in both chain-wide and like-for-like RevPAR (revenue per available room) during the fourth quarter of 2008.

Due to such challenges, the Company believes that its revenue for the fourth quarter of 2008 will be at the low end of its previously announced forecasted range of RMB 535 - 555 million. ($78 - $81 million) "

Source: PR Newswire (January 9, 2009)