Goldman Sachs Reports That, While M&A May Shift Positions, Econ Hotel Penetration Remains Low (SVN, HTHT, HMIN)

Goldman Sachs Reports That, While M&A May Shift Positions, Econ Hotel Penetration Remains Low (SVN, HTHT, HMIN) Goldman Sachs reported that, “We think organic growth is still the way forward as Motel 168's rooms inventory equates to only 1.5-2.0 years of growth by any of the 3 economy names. We favor 7 Days Group (Buy, on Conv. List) for (1) upbeat 2011 hotel opening target of 290 hotels, fastest pace in the industry; (2) only name with potential EBITDA margin expansion in 2011E. Key risks: intensive price competition; cost inflation; potential risk/drag on integration and earnings dilution due to M&A.” 7 Days

closed yesterday at $19.47. Target $29.00. Buy Rating. China Lodging

closed yesterday at $17.72. Target $29.00. Buy Rating. Home Inn

closed yesterday at $39.86. Target $53.00. Neutral Rating.