China Lodging Group (NASDAQ: HTHT) reported Q2 EPS of $0.83, $0.14 better than the analyst estimate of $0.69. Revenue for the quarter came in at $293.4 million versus the consensus estimate of $291.16 million.

• A total of 3,541 hotels or 359,530 hotel rooms in operation as of June 30, 2017.
• Net revenues increased 20.1% year-over-year to RMB1,989.2 million (US$293.4 million) 1 for the second quarter of 2017, above the previously-announced guidance without the acquisition of Crystal Orange
• EBITDA (non-GAAP) increased 26.5% year-over-year to RMB703.1 million (US$103.7 million) for the second quarter of 2017, or 47.8% excluding investment gain.
• Net income attributable to China Lodging Group, Limited increased 23.5% year-over-year to RMB389.6 million (US$57.5 million) for the second quarter of 2017, or 67.8% excluding investment gain.
• Basic earnings per ADS2 were RMB5.58 (US$0.82) and diluted earnings per ADS were RMB5.41 (US$0.80) for the second quarter of 2017. Excluding share-based compensation expenses, adjusted basic earnings per ADS (non-GAAP) were RMB5.81 (US$0.86) and adjusted diluted earnings per ADS (non-GAAP) were RMB5.63 (US$0.83) for the second quarter of 2017.
• The Company expects the Q3 2017 net revenues growth of 30% to 34% (or 13% to 16% excluding the impact of Crystal Orange) year-over-year ; and revises up the full year 2017 net revenues growth to 23% to 26% (or 12% to 15% excluding the impact of Crystal Orange, from 10% to 13%)

Guidance

For the third quarter of 2017, the Company expects net revenues to grow 30% to 34% year-over-year. For the full year of 2017, the Company raises its net revenues growth range to 23% to 26%, given the consolidation of Crystal Orange and better-than-expected performance. Excluding the impact of the Crystal Orange acquisition, the net revenues is expected to grow 13%-16% and 12%-15% for the third quarter and the full year of 2017, respectively, up from the previous guidance of 10%-13% for the full year of 2017.

Considering the interest expense and amortization of intangible assets related to the acquisition, the financial impact from Crystal Orange is expected to be negligible in 2017, and will start to contribute to the bottom line in 2018

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