China Lodging Group (NASDAQ: HTHT) reported Q3 EPS of $0.24, $0.03 worse than the analyst estimate of $0.27. Revenue for the quarter came in at $402.97 million versus the consensus estimate of $383.77 million.

• A total of 4,055 hotels or 409,516 hotel rooms in operation as of September 30, 2018.
• Net revenues increased 15.9% year-over-year from RMB2,387.3 million to RMB2,767.6 million (US$403.0 million) 1 for the third quarter of 2018, exceeding high-end of Q3 revenue guidance (10.5%-12.5%).
• Income from operations increased 32.9% year-over-year from RMB583.1 million to RMB774.8 million (US$112.8 million) for the third quarter of 2018. The operating margin year-over-year improved from 24.4% to 28.0%.
• Net income attributable to Huazhu Group Limited increased 44.0% year-over-year from RMB463.8 million to RMB667.8 million (US$97.2 million) for the third quarter of 2018.
• EBITDA increased 38.5% year-over-year from RMB841.3 million to RMB1,165.6 million for the third quarter of 2018. Excluding unrealized gains (losses) from fair value changes of equity securities and share based compensation, adjusted EBITDA (non-GAAP) increased 19.1% year-over-year from RMB845.2 million to RMB1,006.8 million (US$146.6 million) for the third quarter of 2018.
• The Company provides guidance for Q4 2018 net revenues growth of 17%-19% year over year, and anticipates the full year net revenues growth at the high-end of guidance (18%-22%).

“We are excited to deliver another quarter with strong growth in both hotel openings and revenue growth. In the third quarter, we added a net of 152 hotels, bringing our total number of hotels in operation to 4,055. Our hotels in the pipeline had grown to a historical high of 924 at the end of the third quarter. This shows that our brands and products are well received by our customers and hotel owners. We are well on track for the hotel opening target for this year, and we are confident to further accelerate our new hotel opening in the coming 2019. We are also happy to announce that our flagship midscale hotel brand, the JI brand had exceeded the 500 hotels milestone for hotel in operations, and also recorded a historical high hotel in pipeline of 250 at the end of this quarter. Given JI brand’s characteristic design and superior profitability, we believe the JI brand will continue to accelerate its growth momentum in years to come. Huazhu’s other relatively younger and newly-acquired midscale brands have also started to build their own momentum for fast expansion, supported by our strong direct sales channels and centralized operating platform. We believe a number of these brands will follow JI brand’s growth trajectory to become a much bigger brand in the years to come,” commented Ms. Jenny Zhang, Chief Executive Officer of Huazhu.

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