NEW IPO FROM CHINA - 7 DAYS INN ECONOMY HOTEL CHAIN

Chinese budget hotel chain 7 DAYS GROUP HOLDINGS LTD. filed to the U.S. Securities and Exchange Commission for listing on the New York Stock Exchange and to go public in November via an Initial Public Offering (IPO) following the example of its main competitor, HOME INNS & HOTELS MANAGEMENT listed on the NASDAQ from October 2006. It is previewed to sell up to 100 million US$ in common stocks via ADRs and proposed NYSE ticker is “SVN”. It is announced that the Wall Street debut will happen before the weekend. Proposed offer price is between 9.00 US$ and 11.00 US$ for 10.10 million of offered shares reaching offering amount of 101.00 million US$. The share offering will be used for expansion of its hotel network and to take advantage of China's rapidly growing and very fragmented economy lodging industry. Underwriters are CITIGROUP GLOBAL MARKETS INC., J.P. MORGAN SECURITIES INC. and OPPENHEIMER & CO., INC.

7 DAYS GROUP HOLDINGS LTD. is completely privately owned company founded in Guangzhou in 2005, is one of the leading lodging economy hotel chains in China. The company operates the budget hotel chain under the 7 DAYS INN brand. The lack of economical hotels and the continuously increasing number of budget leisure and corporate travelers in China pushed 7 Days Inn to build a national franchise hotel network capable to offer affordable but quality accommodations for the cost-conscious travelers. Since then, the 7 DAYS GROUP HOLDINGS LTD. has developed a wide hotel network with 283 hotels in operation in 41 cities being the third largest budget hotel chain in China. Among them, 48 are managed hotels with 28,266 hotel rooms. There are 77 hotels more with 7,476 hotel rooms under conversion to cover up to 59 cities in China. It seems that the 7 DAYS INN was the fastest growing Chinese economy hotel chain during the last three years, regarding the number of newly opened hotels. The business model is quite similar to the well-known and successful model of HOME INNS & HOTELS. The group leases existing real estate properties to develop and operate hotels and franchise the 7 DAYS INN to third parties and manage these hotel properties. Still, there are some particular characteristics in the case of the 7 DAYS INN. It’s 7 DAYS INN CLUB with more then 5 million of members and the eCommerce platform, the first one in the industry, are powerful and very important supports for its business. Also, the company is the first economy hotel chain to create a cross-border alliance within the "STAR MOON ALLIANCE".

The company sales in 2008 reached 105.3 million US$ while, for a comparison, HOME INNS & HOTELS generated 257.9 million US$ in the same year. The net income was 30.6 million US$ representing 204.6% 1-Year sales growth. There were 316 employees in 2008 with 9.2% 1-Year employee growth. The revenues for the first three quarters of 2009 reached 121.7 million US$. Thanks to its fast growth and high profitability, 7 DAYS INN was able to obtain more then 200 million US$ funding from Merrill Lynch, Deutsche Bank, Warburg Pincus and Actis.

LINKS:
7 DAYS GROUP HOLDINGS LTD.: http://www.7daysinn.cn/; http://en.7daysinn.cn/

HOME INNS & HOTELS MANAGEMENT: http://www.homeinns.com/

TICKERS:

7 DAYS GROUP HOLDINGS LTD.: NYSE: SVN Proposed

HOME INNS & HOTELS MANAGEMENT: NASDAQ: HMIN