Chinese economy hotel chain Home Inns & Hotels Management released its unaudited financial results for the quarter ended September 30, 2006 and showed total revenues increased 106.3% year-over-year and 15.9% sequentially US$20.3 million.

Net income for the quarter was US$ 1.0 million. Net income available to ordinary shareholders was US$0.6 million.

"We are pleased to report strong results for the third quarter of 2006," said David Sun, Home Inn's Chief Executive Officer. "We continued our revenue growth momentum and executed on our expansion plan while maintaining high occupancy and profitability. In the quarters ahead, we will continue to leverage our widely recognized brand name, nationwide scale and early mover advantage in China's economy hotel market to expand our network and provide a comfortable and consistent lodging experience to a rapidly growing number of business and leisure travelers."

As of September 30, 2006, the Home Inns hotel chain consisted of 78 leased-and-operated hotels and 29 franchised-and-managed hotels in operation, with an additional 33 leased-and-operated hotels and 23 franchised-and-managed hotels under development, covering 45 cities in China. The average number of rooms per hotel in operation was 119.

Total revenues from leased-and-operated hotels for the third quarter of 2006 were US$19.4 million, representing a 101.4% increase year-over-year and a 13.5% increase sequentially. The company opened 15 new lease-and-operated hotels during the quarter.

Total revenues from franchised-and-managed hotels for the third quarter of 2006 were US$0.9 million, representing a 312.2% increase year-over-year and a 106.8% increase sequentially. The company opened 10 new franchised-and-managed hotels during the quarter.

Occupancy rate for the entire Home Inns hotel chain was 94.0% in the third quarter of 2006, compared with 93.1% in the same period in 2005 and 97.7% in the previous quarter. RevPAR in the third quarter of 2006 was RMB172, compared with RevPAR of RMB169 in the same period in 2005 and RMB182 in the previous quarter. The decrease in occupancy rate and RevPAR from the second quarter of 2006 was primarily due to the 25 new hotels opened in the third quarter of 2006.

Total operating expenses for the quarter were US$17.4 million. Total leased-and-operated hotel costs were US$13.3 million, representing an 85.5% increase over the same period in 2005 and a 19.9% increase over the second quarter of 2006. The increase was primarily due to the new leased-and-operated hotels opened during the quarter.

As of September 30, 2006, Home Inns had cash and cash equivalents of US$20.4 million. Net operating cash flow for the third quarter of 2006 was US$5.9 million. Home Inns completed its Nasdaq IPO in October 2006, receiving approximately US$72.8 million net proceeds from the offering.

Home Inns expects its total revenues in the fourth quarter of 2006 to be in the range of US$20.5 million to US$22.5 million.