UPDATE: Morgan Stanley Reiterates On China Lodging Group Ltd. On 2Q14 Operational Results

In a report published Friday, Morgan Stanley analyst Lin He reiterated an Overweight rating on

, but removed the $29.40 price target. In the report, Morgan Stanley noted, “Same hotel RevPAR was flat yoy (vs. -1.3% last quarter), with the economy segment down 1% but offset by strong growth of 11% at the mid-scale segment. May was the strongest month in the quarter, helped by leisure demand. Both April and June recorded negative same hotel RevPAR growth, although June performance was better than April. Management believe that same hotel RevPAR growth will be marginal at best throughout 2014. Blended RevPAR was down 1.8% yoy, compared with -2% in 1Q2014. Total 139 new hotels opened in 2Q14 (vs. 105 in 1Q14), among which, manachised (i.e., managed & franchised) hotels showed strong momentum with 125 new addition. Number of hotels in pipeline reached record high of 505 (45 leased hotels and 460 manachised hotels). In terms of submarkets, Shanghai outperformed, while Beijing and lower tier markets underperformed.” China Lodging Group Ltd. closed on Thursday at $24.57.