It is un-justifiable that CEO has such a low P/E vs XOM. In fact CEO will be growing faster with much more then it did. I also project to see the dividend increase and share buy back. so it will ride high in next few months
HTHT mainly run serviceable business hotel in China, but it growth will be significantly slowed in next few years unless they can figure out different business model.
1) They run out of members to join in. In past, they hand out $20-$40 membership to target business traveler, the strategy is successful. But the hotel is running out of gas on their capability of attract new members as most people who want it already has it. It will cut the growth significantly.
2) The management has expanded their business to both high end and low end of the market by adding some 4 star or 2 star like hotels. This diluted their brand and the number of expansion will be slowed to many level since most top tier business spot has already been taken.
3) The hotel service is deteriorating, trust me on this since I have stopped use their service. Some facilities I have stayed are really in bad shape. Their Service is still good though, but so is their competitor's.
4) Chinese Government has started cracking down on the excess wast of traveling, and many business traveler will face cutting down their spending. The hotel customer group is moving towards more casual traveler.
5) Find a hotel business analysis. The best hotel fill-in rate is highest in 4 star, with 72%. both 5 stars and 3 stars are declining. Hanting's hotels are mainly in 3 star range.
6) this hotel chain is over valued because they do not own a lot of their facilities. those facilities are mainly joined in like franchised business, so Hanting does not own land and building, which is typically a reason a hotel chain is high on P/E.