3SOF

http://stockcharts.com/h-sc/ui?s=HMIN&p=D&b=5&g=0&id=p59191861522

Watch for earnings after the bell Tuesday.

Home Inns & Hotels Management Inc.
400 Tian Yao Qiao Road
Shanghai,  200030
China - Map
Phone: 86 21 6486 1818
Web Site: http://www.homeinns.com

DETAILS  
Index Membership: N/A
Sector: Services
Industry: Lodging
Full Time Employees: 6,291


BUSINESS SUMMARY  
Home Inns & Hotels Management, Inc. engages in the development, lease, operation, franchise, and management of economy hotel chains in China. It operates its hotels under the brand name Home Inn. As of October 1, 2007, its Home Inns hotel chain consisted of 200 hotels. The company was incorporated in 2001 and is headquartered in Shanghai, the People's Republic of China.

Not good enough for me to consider a buy.
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Home Inns Announces Financial Results for the Third Quarter of 2007
Tuesday November 20, 5:00 pm ET


SHANGHAI, China, Nov. 20 /Xinhua-PRNewswire/ -- Home Inns & Hotels Management Inc. (Nasdaq: HMIN - News), a leading economy hotel chain in China, today announced its unaudited financial results for the quarter ended September 30, 2007.

    Third Quarter 2007 Highlights

    -- Total revenues for the quarter increased by 66.1 % year-over-year to
       RMB266.4 million (US$35.5 million).

    -- Income from operations was RMB39.5 million (US$5.3 million), an
       increase of 172.1% year-over-year.  Excluding share-based compensation
       expenses of RMB4.3 million (US$0.6 million), income from operations
       (non-GAAP) was RMB43.8 million (US$5.8 million), up 55.1% year-over-
       year.

    -- Excluding foreign exchange losses of RMB10.2 million (US$1.4 million)
       and share-based compensation expenses, adjusted net income (non-GAAP)
       was RMB39.8 million (US$5.3 million), up 76.8% year-over-year.  Net
       income (GAAP) for the quarter was RMB25.3 million (US$3.4 million), up
       220% year-over-year.

    -- EBITDA (non-GAAP), defined as earnings before interest, taxes,
       depreciation and amortization, was RMB52.1 million (US$6.9 million),
       representing an 85.4% increase year-over-year.  Excluding foreign
       exchange losses and share-based compensation expenses, adjusted EBITDA
       (non-GAAP) was RMB66.6 million (US$8.9 million), up 56.0% year-over-
       year.

    -- Excluding foreign exchange losses and share-based compensation expenses,
       adjusted diluted earnings per share (non-GAAP) were RMB0.55 (US$0.07),
       and adjusted diluted earnings per ADS (non-GAAP) were RMB1.10 (US$0.15).
       Diluted earnings per share (GAAP) were RMB0.35 (US$0.05), and diluted
       earnings per ADS (GAAP) were RMB0.70 (US$0.09).  Each ADS represents
       two ordinary shares.

    -- During the third quarter of 2007, Home Inns opened 30 new hotels.  As
       of September 30, 2007, the Home Inns hotel chain consisted of 201
       hotels in operation with an additional 96 hotels under development,
       covering 77 cities in China.

    -- The occupancy rate for the Home Inns hotel chain was 95% in the third
       quarter of 2007, compared with 94% during the same period in 2006 and
       95% in the previous quarter.

    -- RevPAR, defined as revenue per available room, was RMB174 in the third
       quarter of 2007, compared with RMB172 in the same period in 2006 and
       RMB174 in the previous quarter.

''We had another strong quarter,'' said Mr. David Sun, Home Inn's Chief Executive Officer. ''We continue to successfully grow the Home Inns hotel chain by adding more hotels and entering more cities while maintaining steady hotel performance, and we are able to do so in both first and second tier cities.''

As of September 30, 2007, the Home Inns hotel chain consisted of 143 leased-and-operated hotels and 58 franchised-and-managed hotels in operation, with an additional 69 leased-and-operated hotels and 27 franchised-and-managed hotels under development, covering 77 cities in China. The average number of rooms per hotel in operation was 119.

Third Quarter 2007 Financial Results

For the third quarter of 2007, Home Inns had total revenues of RMB266.4 million (US$35.5 million), compared with total revenues of RMB160.4 million for the third quarter of 2006, representing a 66.1% increase year-over-year.

Total revenues from leased-and-operated hotels for the third quarter of 2007 were RMB254.2 million (US$33.9 million), compared with RMB153.0 million for the third quarter of 2006, representing a 66.2% increase year-over-year. Home Inns opened 26 new lease-and-operated hotels during the third quarter of 2007.

Total revenues from franchised-and-managed hotels for the third quarter of 2007 were RMB12.2 million (US$1.6 million), compared with RMB7.4 million for the third quarter of 2006, representing a 64.7% increase year-over-year. Home Inns opened four new franchised-and-managed hotels during the third quarter of 2007.

Occupancy rate for the entire Home Inns hotel chain was 95% in the third quarter of 2007, compared with 94% in the same period in 2006 and 95% in the previous quarter. Revenue per available room, or RevPAR in the third quarter of 2007 was RMB174, compared with RevPAR of RMB172 in the same period in 2006 and RMB174 in the previous quarter.

Total operating costs and expenses for the third quarter of 2007 were RMB211.2 million (US$28.2 million). Total operating costs and expenses excluding share-based compensation expenses (non-GAAP) for the third quarter of 2007 were RMB207.0 million (US$27.6 million), or 77.7% of total revenues, compared to 76.7% in the third quarter of 2006 and 76.1% in the previous quarter. Factors that led to these changes are discussed below.

Total leased-and-operated hotel costs were RMB180.9 million (US$24.1 million), representing 71.2% of the leased-and-operated hotel revenues. Total leased-and-operated hotel costs represented 68.9% of the leased-and-operated hotel revenues for the same quarter in 2006 and 69.8% for the previous quarter. The increase in percentage compared to the previous quarter was primarily due to the increase in rent and utility costs as a percentage of lease-and- operated hotel revenues due to the large number of hotels under construction. As required under US GAAP, we account for rental expenses on a straight line basis as our cost once a lease contract becomes effective, even though in most cases we receive a rent-free period of a few months during the construction stage. The increase in percentage compared to the third quarter of 2006 was primarily due to (1) higher depreciation costs as a percentage of leased-and- operated hotel revenues and (2) lower food and beverage margin resulting from the rapid increase in food costs. Our higher depreciation costs as a percentage of leased-and-operated hotel revenues were a result of our increased mix of hotels in second tier cities because in these cities, we achieved lower revenues per hotel while construction costs were similar across all cities.

Selling and marketing expenses were RMB6.3 million (US$0.8 million), an increase of 93.4% year-over-year and 44.1% sequentially. The increase was primarily attributable to increased advertising and marketing activities in new geographic markets as Home Inns continued to expand into new regions and cities, and promote its brand. Overall, sales and marketing expenses represented 2.4% of total revenues.

General and administrative expenses were RMB24.0 million (US$3.2 million). General and administrative expenses excluding share-based compensation expenses of RMB4.3 million (US$0.6 million) (non-GAAP) were RMB19.7 million (US$2.6 million), or 7.4% of the total revenues, compared with 9.0% of the total revenues in the same period of 2006 and 7.5% in the previous quarter. The decrease in percentage this year versus the same period last year resulted from our operating leverage as our revenues grew.

Income from operations for the quarter was RMB39.5 million (US$5.3 million). Income from operations excluding share-based compensation expenses (non-GAAP) was RMB43.8 million (US$5.8 million) or 16.4% of total revenues, compared to 17.6% in the same period of 2006 and 18.0% in the previous quarter. The decrease in operating margin from the same period last year was caused by higher leased-and-operated costs as a percentage of leased-and-operated hotel revenues as described above.

EBITDA (non-GAAP) for the third quarter of 2007 was RMB52.1 million (US$6.9 million), up 85.37% year-over-year and 17.35% sequentially. Excluding foreign exchange losses and share-based compensation expenses, adjusted EBITDA (non-GAAP) was RMB66.6 million (US$8.9 million), up 56.0% year-over-year and 8.1% from the previous quarter.

Excluding foreign exchange losses and share-based compensation expenses, adjusted net income (non-GAAP) was RMB39.8 million (US$5.3 million), up 76.8% year-over-year. Net income (GAAP) for the quarter was RMB25.3 million (US$3.4 million), up 220% year-over-year.

Excluding foreign exchange losses and share-based compensation expenses, adjusted basic and diluted earnings per share (non-GAAP) were RMB 0.57(US$0.08) and RMB0.55 (US$0.07), respectively, and adjusted basic and diluted earnings per ADS (non-GAAP) were RMB 1.15(US$0.15) and RMB1.10 (US$0.15), respectively. Basic and diluted earnings per share (GAAP) were RMB0.36 (US$0.05) and RMB0.35 (US$0.05), respectively, and basic and diluted earnings per ADS (GAAP) were RMB0.73 (US$0.10) and RMB0.70 (US$0.09), respectively.

Net operating cash flow for the third quarter of 2007 was RMB72.5 million (US$9.7 million). Capital expenditures for the quarter were RMB171.6 million (US$22.9 million).

As of September 30, 2007, Home Inns had cash and cash equivalents of RMB452.7 million (US$60.4 million).

Home Inns completed the acquisition of the remaining 4.412% stake in its majority owned subsidiary, Home Inns & Hotels Management (Beijing) Ltd. in July 2007. The total acquisition consideration consisted of RMB60 million and 441,669 ordinary shares of Home Inns.

Recent Developments

Home Inns has agreed in October 2007 to acquire the Top Star hotel chain, which consists of 26 economy hotels with approximately 4,200 rooms across 18 cities in China. Home Inns' consideration for the acquisition will consist of the assumption of approximately RMB 172 million in debt, the issuance of up to 655,831 Home Inns' ordinary shares (which equals 327,916 of Home Inns' American depositary shares), as well as cash payment of up to RMB 88 million, if all conditions and targets are met by Top Star.

Home Inns has taken control of the operation of the Top Star hotels on November 1, 2007, and the closing of the acquisition is expected to occur around the end of 2007.

Established in 2005, Top Star is a popular economy hotel brand among domestic business and leisure travelers in China. The addition of these hotels will allow Home Inns hotel chain to further expand to more than 320 hotels in more than 80 cities, and to leverage both Home Inns' and Top Star's customer bases.

Outlook for Fourth Quarter 2007

Home Inns expects its total revenues in the fourth quarter of 2007 to be in the range of RMB 320 million (US$42.7 million) to RMB 335 million (US$44.7 million), including revenue from the Top Star hotels beginning November 1, 2007. This forecast reflects Home Inns' current and preliminary view, which is subject to change.

Conference Call Information

Home Inns' management will hold an earnings conference call at 8 PM on November 20th, 2007 U.S. Eastern Standard Time (9 AM on November 21, 2007 Beijing/Hong Kong time).


    Dial-in details for the earnings conference call are as follows:

    China Mainland (toll free):  10.800.130.0399
    Hong Kong:                   +852.3002.1672
    U.S. and International:      +1.866.356.4281 / +1.617.597.5395

    Pass code for all regions:   HOME INNS

A replay of the conference call may be accessed by phone at the following number until 9 PM on November 27th, 2007 U.S. Eastern Standard Time.



    International:               +1.617.801.6888
    Pass code:                   93247342


Additionally, a live and archived webcast of this conference call will be available at http://english.homeinns.com .

About Home Inns

Home Inns is a leading economy hotel chain in China based on the number of hotels and hotel rooms, as well as the geographic coverage of the hotel chain. Since Home Inns commenced operations in 2002, it has become one of the best- known economy hotel brands in China. Home Inns offers a consistent product and high-quality services to primarily serve the fast growing population of value-conscious individual business and leisure travelers who demand clean, comfortable and convenient lodging. Home Inns' ADSs, each of which represents two ordinary shares, are currently trading on the NASDAQ Global Market under the symbol ''HMIN.'' For more information about Home Inns, please visit http://english.homeinns.com .

Safe Harbor

This announcement contains forward-looking statements. These statements are made under the ''safe harbor'' provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as ''will,'' ''expects,'' ''anticipates,'' ''future,'' ''intends,'' ''plans,'' ''believes,'' ''estimates'' and similar statements. Among other things, the outlook for the fourth quarter of 2007 and quotations from management in this announcement, as well as Home Inns' strategic and operational plans, contain forward-looking statements. Home Inns may also make written or oral forward-looking statements in its periodic reports to the Securities and Exchange Commission (the ''SEC''), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to first parties. Statements that are not historical facts, including statements about Home Inns' beliefs and expectations, are forward-looking statements. Forward- looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our anticipated growth strategies; our future business development, results of operations and financial condition; expected changes in our revenues and certain cost or expense items; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; our ability to hire, train and retain qualified managerial and other employees; our ability to develop new hotels at desirable locations in a timely and cost-effective manner; the expected growth of the Chinese economy hotel market; and Chinese governmental policies relating to private managers and operators of hotels and applicable tax rates.

Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the SEC. Home Inns does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of November 21, 2007, and Home Inns undertakes no duty to update such information, except as required under applicable law.

Non-GAAP Financial Measures

To supplement Home Inns' un-audited consolidated financial results presented in accordance with U.S. GAAP, Home Inns uses the following non-GAAP measures defined as non-GAAP financial measures by the SEC: total operating expenses excluding share-based compensation expenses, general and administrative expenses excluding share-based compensation expenses, income from operations excluding share-based expenses, adjusted net income excluding foreign exchange losses and share-based compensation, adjusted basic and diluted earnings and ADS per share excluding foreign exchange losses and share-based compensation, EBITDA and adjusted EBITDA excluding foreign exchange losses and share-based compensation. The presentation of these non- GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned ''Reconciliations of GAAP and non-GAAP results'' set forth at the end of this release.

Home Inns believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective and by excluding foreign exchange losses which may not be indicative of its operating performance. Home Inns believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to Home Inns' historical performance and liquidity. Home Inns computes its non-GAAP financial measures using the same consistent method from quarter to quarter. Home Inns believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP financial measures excluding share-based compensation expenses is that share- based compensation expenses have been and will continue to be a significant recurring expense in our business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

Home Inns' management also believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization is a useful financial metric to assess our operating and financial performance before the impact of investing and financing transactions and income taxes. In addition, Home Inns' management believes that EBITDA is widely used by other companies in the lodging industry and may be used by investors as a measure of our financial performance. Given the significant investments that Home Inns has made in property, plant and equipment, depreciation and amortization expense comprises a meaningful portion of our cost structure. Home Inns' management believes that EBITDA will provide investors with a useful tool for comparability between periods because it eliminates depreciation and amortization expense attributable to capital expenditures. The presentation of EBITDA should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.

The use of EBITDA and adjusted EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets, income tax expense, interest expense and interest income have been and will be incurred and are not reflected in the presentation of EBITDA. Further, foreign exchange losses and share-based compensation expenses have been and will be incurred and are not reflected in the presentation of adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our financial results. Additionally, EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. Home Inns compensates for these limitations by providing the relevant disclosure of our depreciation and amortization, interest expense and interest income, income tax expense, capital expenditures and other relevant items both in our reconciliations to the U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance. The term EBITDA or adjusted EBITDA is not defined under U.S. GAAP, and EBITDA or adjusted EBITDA is not a measure of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider this data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, our EBITDA and adjusted EDITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as we do.

Reconciliations of Home Inns' non-GAAP financial measures, including EBITDA and adjusted EBITDA, to consolidated statement of operations information are included at the end of this press release.




                      Home Inns & Hotels Management Inc.
                    Consolidated Balance Sheet Information

                                  December 31, 2006    September 30, 2007
                                          RMB           RMB          US$
                                     (unaudited)     (unaudited)  (unaudited)
    ASSETS
    Current assets:
    Cash and cash equivalents         758,003,839    452,697,298   60,417,641
    Restricted cash                            --    238,843,440   31,876,393
    Accounts receivable                 8,902,565     10,375,023    1,384,666
    Receivables from related
     parties                              197,788             --           --
    Consumables                        12,131,304     12,501,292    1,668,441
    Prepayments and other current
     assets                            10,529,624     34,851,235    4,651,297
    Deferred tax assets, current        5,670,939      6,640,642      886,270

    Total current assets              795,436,059    755,908,930  100,884,708

    Property and equipment, net       458,058,608    754,148,511  100,649,759
    Goodwill                           32,906,112    199,514,065   26,627,438
    Intangible assets, net              3,021,795     29,233,168    3,901,501
    Other assets                        4,175,804     12,426,017    1,658,394
    Deferred tax assets, non-
     current                           26,420,799     31,881,904    4,255,005

    Total assets                    1,320,019,177  1,783,112,595  237,976,805

    LIABILITIES
    Current liabilities:
    Accounts payable                    8,919,148      9,991,038    1,333,418
    Payables to related parties         7,389,990      6,831,628      911,759
    Short-term borrowings             124,000,000     20,000,000    2,669,229
    Current portion of long-term
     loan from a related party         10,000,000             --           --
    Salaries and welfare payable       22,496,135     29,578,854    3,947,637
    Income tax payable                 18,399,704     25,606,904    3,417,535
    Other taxes payable                 4,548,918      5,816,108      776,226
    Deferred revenues                  18,612,207     32,639,647    4,356,135
    Provisions for customer reward
     program                            2,743,366      4,715,383      629,322
    Other payables                     83,618,354    153,194,477   20,445,558
    Other unpaid and accruals          22,501,485     30,860,231    4,118,652

    Total current liabilities         323,229,307    319,234,270   42,605,471

    Deferred rental                    44,103,281     66,033,691    8,812,953
    Long-term loan from a related
     party                             50,000,000             --           --
    Unfavorable lease liability                --      3,991,216      532,673
    Deferred tax liability, non-
     current                              165,074      4,870,828      650,068

    Total liabilities                 417,497,662    394,130,005   52,601,165

    Minority interest                  12,782,963     10,978,977    1,465,270

    Commitments and contingencies

    Shareholders' equity
    Ordinary shares (US$0.005 par
     value; 177,075,114 and
     200,000,000 shares authorized,
     65,712,839 and 69,624,388
     shares issued and outstanding
     as of December 31, 2006 and
     September 30, 2007,
     respectively)                      2,690,943      2,841,312      379,206

    Additional paid-in capital        813,222,265  1,250,369,464  166,876,130
    Statutory reserves                 23,414,541     23,414,541    3,124,939
    Retained earnings                  50,410,803    101,378,296   13,530,095

    Total shareholders' equity        889,738,552  1,378,003,613  183,910,370

    Total liabilities and
     shareholders' equity           1,320,019,177  1,783,112,595  237,976,805


    Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
            is based on the noon buying rate of US$1.00=RMB7.4928 on September
            30, 2007 in The City of New York for cable transfers of RMB
            as certified for customs purpose by Federal Reserve Bank of New
            York.



                      Home Inns & Hotels Management Inc.
               Consolidated Statement of Operations Information

                                            Quarter Ended
                    September 30, 2006 June 30, 2007    September 30, 2007
                             RMB           RMB           RMB          US$
                         (unaudited)   (unaudited)   (unaudited)  (unaudited)
    Revenues:
         Leased-and-
          operated
          hotels         152,956,058   221,800,557   254,182,195   33,923,526
         Franchised-
          and-managed
          hotels           7,396,171    10,429,286    12,179,199    1,625,454

    Total revenues       160,352,229   232,229,843   266,361,394   35,548,980
         Less: Business
          tax and
          related
          surcharges      (9,087,206)  (13,780,664)  (15,617,991)  (2,084,400)

    Net revenues         151,265,023   218,449,179   250,743,403   33,464,580

    Operating costs and
     expenses:
       Leased-and-
        operated hotel
        costs -
          Rents and
           utilities     (45,253,311)  (61,300,705)  (73,728,804)  (9,839,954)
          Personnel
           costs*        (23,409,437)  (35,057,988)  (39,683,303)  (5,296,191)
          Depreciation
           and
           amortization  (11,320,003)  (18,387,838)  (20,827,363)  (2,779,650)
          Consumables,
           food and
           beverage      (11,077,789)  (18,882,192)  (21,258,758)  (2,837,225)
          Others         (14,347,798)  (21,252,031)  (25,441,722)  (3,395,489)

       Total leased-
        and-operated
        hotel costs     (105,408,338) (154,880,753) (180,939,950) (24,148,509)

       Sales and
        marketing
        expenses          (3,260,229)   (4,376,591)   (6,306,364)    (841,657)
       General and
        administrative
        expenses*        (28,079,380)  (21,880,509)  (24,001,642)  (3,203,294)

    Total operating
     costs and expenses (136,747,947) (181,137,853) (211,247,956) (28,193,460)

    Income from
     operations           14,517,075    37,311,325    39,495,446    5,271,120

    Interest income          255,277    10,499,334     8,610,214    1,149,132
    Interest expense      (1,644,689)   (2,240,676)   (1,274,235)    (170,061)
    Other non-operating
     income                3,264,850     3,113,712     2,315,197      308,990
    Foreign exchange
     gain or loss, net      (896,872)  (12,752,395)  (10,238,784)  (1,366,483)

    Income before
     income tax
     expense, minority
     interests and
     share of income of
     affiliated
     companies            15,495,642    35,931,300    38,907,839    5,192,698
    Income tax expense    (6,533,696)  (11,035,634)  (12,517,776)  (1,670,641)
    Minority interests    (1,060,156)   (2,153,110)   (1,122,246)    (149,777)

    Net income             7,901,791    22,742,556    25,267,817    3,372,280

    Amount allocated to
     participating
     preference
     shareholders        (3,360,682)            --            --           --

    Net income
     available to
     ordinary
     shareholders          4,541,109    22,742,556    25,267,817    3,372,280

    Earnings per share
    - Basic                     0.15          0.33          0.36         0.05

    - Diluted                   0.14          0.32          0.35         0.05

    Weighted average
     ordinary shares
     outstanding
    - Basic               30,860,496    67,942,681    69,294,348   69,294,348

    - Diluted             32,283,906    70,875,405    72,165,704   72,165,704

    * Share-based
      compensation
      expense was
      included in the
      statement of
      operations as
      follows:
    Leased-and-operated
     hotel costs -
     Personnel costs           2,986         2,830         2,756          368
    General and
     administrative
     expenses             13,692,504     4,465,490     4,269,891      569,866


    Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
            is based on the noon buying rate of US$1.00=RMB7.4928 on September
            30, 2007 in The City of New York for cable transfers of RMB as
            certified for customs purpose by Federal Reserve Bank of New York.

    Note 2: For the quarter ended September 30, 2006, share-based compensation
            expense included expenses associated with equity issuance of
            RMB 9,564,136 (for the quarter ended June 30, 2007 and the quarter
            ended September 30, 2007: Nil) and expenses associated with
            severance of RMB 3,314,800 (for the quarter ended June 30, 2007
            and the quarter ended September 30, 2007: Nil).



                      Home Inns & Hotels Management Inc.
                 Reconciliation of GAAP and Non-GAAP Results

                              Quarter Ended September 30, 2007

                                        Share-
                               %of      based    %of                  %of
                     GAAP      Total    Compen-  Total   Non-GAAP     Total
                    Result    Revenue   sation  Revenue   Result     Revenue
                     RMB                 RMB                RMB

    Leased-and-
     operated
     hotel costs (180,939,950) 67.9 %    2,756   0.0 %  (180,937,194)   67.9 %
    Sales and
     marketing
     expenses      (6,306,364)  2.4 %       --   0.0 %    (6,306,364)    2.4 %
    General and
     admini-
     strative
     expenses     (24,001,642)  9.0 % 4,269,891  1.6 %   (19,731,751)    7.4 %

    Total
     operating
     costs and
     expenses    (211,247,956) 79.3 % 4,272,647  1.6 %  (206,975,309)   77.7 %

    Income from
     operations    39,495,446  14.8 % 4,272,647  1.6 %    43,768,093    16.4 %



                              Quarter Ended September 30, 2007

                                        Share-
                               %of      based    %of                  %of
                     GAAP      Total    Compen-  Total   Non-GAAP     Total
                    Result    Revenue   sation  Revenue   Result     Revenue
                     US$                 US$               US$

    Leased-and-
     operated
     hotel costs (24,148,509)  67.9 %     368    0.0 %  (24,148,141)  67.9 %
    Sales and
     marketing
     expenses       (841,657)   2.4 %      --    0.0 %     (841,657)   2.4 %
    General and
     admini-
     strative
     expenses     (3,203,294)   9.0 % 569,866    1.6 %   (2,633,428)   7.4 %

    Total
     operating
     costs and
     expenses    (28,193,460)  79.3 % 570,234    1.6 %  (27,623,226)  77.7 %

    Income from
     operations    5,271,120  14.8 %  570,234    1.6 %    5,841,354   16.4 %


                                Quarter Ended June 30, 2007

                                        Share-
                               %of      based    %of                  %of
                     GAAP      Total    Compen-  Total   Non-GAAP     Total
                    Result    Revenue   sation  Revenue   Result     Revenue
                     RMB                 RMB                RMB
    Leased-and-
     operated
     hotel costs (154,880,753) 66.7 %     2,830   0.0 % (154,877,923)  66.7 %
    Sales and
     marketing
     expenses      (4,376,591)  1.9 %        --   0.0 %   (4,376,591)   1.9 %
    General and
     admini-
     strative
     expenses     (21,880,509)  9.4 % 4,465,490   1.9 %  (17,415,019)   7.5 %

    Total
     operating
     costs and
     expenses    (181,137,853) 78.0 % 4,468,320   1.9 % (176,669,533)  76.1 %

    Income from
     operations    37,311,325  16.1 % 4,468,320   1.9 %   41,779,645   18.0 %


                              Quarter Ended September 30, 2006

                                        Share-
                               %of      based    %of                   %of
                     GAAP      Total    Compen-  Total    Non-GAAP     Total
                    Result    Revenue   sation  Revenue    Result     Revenue
                     RMB                 RMB                 RMB

    Leased-and-
     operated
     hotel costs (105,408,338) 65.7 %      2,986   0.0 % (105,405,352)  65.7 %
    Sales and
     marketing
     expenses      (3,260,229)  2.0 %         --   0.0 %   (3,260,229)   2.0 %
    General and
     admini-
     strative
     expenses     (28,079,380) 17.5 % 13,692,504   8.5 %  (14,386,876)   9.0 %

    Total
     operating
     costs and
     expenses    (136,747,947) 85.3 % 13,695,490   8.5 % (123,052,457)  76.7 %

    Income from
     operations    14,517,075  9.1 %  13,695,490   8.5 %   28,212,565   17.6 %


   Note 1: The conversion of Renminbi ("RMB") into United States dollars
           ("US$") is based on the noon buying rate of US$1.00=RMB7.4928 on
           September 30, 2007 in The City of New York for cable transfers of
           RMB as certified for customs purpose by Federal Reserve Bank of New
           York.

    Note 2: For the quarter ended September 30, 2006, share-based compensation
            expense included expenses associated with equity issuance of RMB
            9,564,136 (for the quarter ended June 30, 2007 and the quarter
            ended September 30, 2007: Nil) and expenses associated with
            severance of RMB 3,314,800 (for the quarter ended June 30, 2007
            and the quarter ended September 30, 2007: Nil).



                      Home Inns & Hotels Management Inc.
           Reconciliation of GAAP and Non-GAAP Results (continued)

                                           Quarter Ended

                        September 30, 2006 June 30, 2007  September 30, 2007
                                   RMB         RMB         RMB         US$
                               (unaudited) (unaudited) (unaudited) (unaudited)


    Net income (GAAP)           7,901,791  22,742,556  25,267,817   3,372,280
          Foreign exchange
           losses (gains), net    896,872  12,752,395  10,238,784   1,366,483
          Share-based
           compensation        13,695,490   4,468,320   4,272,647     570,234

    Adjusted net income
     excluding foreign
     exchange losses, share-
     based compensation        22,494,152  39,963,271  39,779,248   5,308,997



                                               Quarter Ended
                        September 30, 2006 June 30, 2007  September 30, 2007
                                   RMB         RMB         RMB         US$
                               (unaudited) (unaudited) (unaudited) (unaudited)

    Earnings per share (GAAP)
    - Basic                          0.15        0.33        0.36        0.05

    - Diluted                        0.14        0.32        0.35        0.05

    Earnings per share
     excluding foreign
     exchange losses, share-
     based compensation
    - Basic                          0.42        0.59        0.57        0.08

    - Diluted                        0.40        0.56        0.55        0.07

    Weighted average ordinary
     shares outstanding
    - Basic                    30,860,496  67,942,681  69,294,348  69,294,348

    - Diluted                  32,283,906  70,875,405  72,165,704  72,165,704



    Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
            is based on the noon buying rate of US$1.00=RMB7.4928 on September
            30, 2007 in The City of New York for cable transfers of RMB as
            certified for customs purpose by Federal Reserve Bank of New York.

    Note 2: For the quarter ended September 30, 2006, share-based compensation
            expense included expenses associated with equity issuance of
            RMB 9,564,136 (for the quarter ended June 30, 2007 and the quarter
            ended September 30, 2007: Nil) and expenses associated with
            severance of RMB 3,314,800 (for the quarter ended June 30, 2007
            and the quarter ended September 30, 2007: Nil).



                      Home Inns & Hotels Management Inc.
           Reconciliation of GAAP and Non-GAAP Results (continued)

                                               Quarter Ended
                       September 30, 2006 June 30, 2007   September 30, 2007
                                  RMB          RMB         RMB         US$
                              (unaudited)  (unaudited) (unaudited) (unaudited)


    Net income (GAAP)          7,901,791   22,742,556  25,267,817   3,372,280
          Interest income       (255,277) (10,499,334) (8,610,214) (1,149,132)
          Interest expenses    1,644,689    2,240,676   1,274,235     170,061
          Income tax expense   6,533,696   11,035,634  12,517,776   1,670,641
          Depreciation and
           amortization       12,266,527   18,854,463  21,622,771   2,885,806

    EBITDA (Non-GAAP)         28,091,425   44,373,996  52,072,385   6,949,656

          Foreign exchange
           losses (gains),
           net                   896,872   12,752,395  10,238,784   1,366,483
          Share-based
           compensation       13,695,490    4,468,320   4,272,647     570,234

    EBITDA excluding foreign
     exchange losses, share-
     based compensation &
     non-recurring provision
     for deferred tax assets  42,683,787   61,594,711  66,583,816   8,886,373

    % of total revenue             26.6%        26.5%       25.0%       25.0%


    Note 1: The conversion of Renminbi (RMB) into United States dollars (US$)
            is based on the noon buying rate of US$1.00=RMB7.4928 on September
            30, 2007 in The City of New York for cable transfers of RMB as
            certified for customs purpose by Federal Reserve Bank of New York.

    Note 2: For the quarter ended September 30, 2006, share-based compensation
            expense included expenses associated with equity issuance of
            RMB 9,564,136 (for the quarter ended June 30, 2007 and the quarter
            ended September 30, 2007: Nil) and expenses associated with
            severance of RMB 3,314,800 (for the quarter ended June 30, 2007
            and the quarter ended September 30, 2007: Nil).



                      Home Inns & Hotels Management Inc.
                                Operating Data

                                             As of and for the quarter ended
                                           September 30, June 30, September 30,
                                               2006        2007        2007

    Total Hotels in operation:
          Lease-and-operated hotels               78         117         143
          Franchised-and-managed hotels           29          54          58

    Total rooms                               12,729      20,485      23,954

    Occupancy rate (as a percentage)           94.0%       95.2%       95.4%

    Average daily rate (in RMB)                  183         183         182

    RevPAR (in RMB)                              172         174         174



    For investor and media inquiries, please contact:

     Angela Li
     Home Inns & Hotels Management Inc.
     Tel:   +86-21-3218-9988 x2004
     Email: [email protected]