What is the impact of Home Inn's overseas listing?

At 22:40 on October 26, Beijing time, Home Inn (NASDAQ: HMIN, hereinafter referred to as "Home Inn") started trading on the Nasdaq Stock Exchange in the United States. It opened at $22, 59.4% higher than the issue price of $13.8. In the initial public offering (IPO), Home Inns sold a total of 7.9 million American depositary receipts, raising US$109 million. This is the second time in three years that Shen Nanpeng has led a company to list on Nasdaq after Ctrip (Shen is one of the founders of Ctrip).

In the early morning of October 27, Home Inn's stock has risen by more than 64%. Home Inns founder and co-chairman Shen Nanpeng made a phone call from the United States and accepted an exclusive interview with this newspaper.

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"Too enthusiastic!" Shen Nanpeng said, "The enthusiasm of investors this time is far greater than when Ctrip was listed a few years ago, and Home Inn shares were subscribed for more than 40 times." As the performance of Nasdaq in 2006 One of the best IPOs, Home Inns' market value skyrocketed to $800 million overnight. This is more than two times higher than the value estimated by people in the securities industry before the listing according to Ctrip.

Investors believe that this Home Inn IPO highlights some new meanings. With the increase in the number of Chinese companies listed in recent years, American investors, after going through IPOs such as Ctrip, Focus, Baidu, etc., are more interested in Chinese companies. The business model is beginning to be recognized gradually.

"I still remember that it has been four years and five months since Homeinn got its business license. I must say that this is due to the rapid growth of China's economy and the huge opportunities in the economic hotel industry." Shen Nanpeng said, "I always thought that it would take a long time to do something. Who knew that it only took such a short period of time. I can't help but say that there is a lucky factor."

Expand! expansion!

"The most direct benefit of listing to Home Inns is that it enhances users' recognition of the hotel brand." Shen Nanpeng said, "As a consumer enterprise, listing will directly widen the distance between us and our competitors."

Home Inns It is the first listed economy hotel chain in China. Its competitors include Jinjiang Inn, Motel, Shanshui Hotel, etc. Many young business people in China choose this type of hotel for business trips. Because traditionally, more upscale hotels tend to be uneconomical, and economical guest houses cannot guarantee hygiene and comfort. According to the statistics of the American Hotel Industry Association, there are about 60,000 budget hotels in the United States, accounting for 88% of the total number of hotels. But in China, this type of hotel is just emerging.

Home Inns CEO Sun Jian said that as of October 25, 2006, the number of hotels operated and authorized by Home Inns has reached 110. The total revenue as of the end of June in 2006 has reached 249 million yuan, and the net income is 27 million yuan. Thanks to its rapid expansion, Homeinn has surpassed the longer-established Jinjiang Inn hotel chain to become the No. 1 in the same market.

However, rivals who are stimulated by Home Inn are also speeding up their pursuit. In June 2006, Morgan Stanley, an American investment bank, acquired part of the shares of Shanghai Motel Chain Hotel Management Co., Ltd. at a price of US$20 million, and planned to help the company go public in the United States two years later.

At the same time, Jin Jiang Inn, the pioneer of domestic budget hotels, is also in the process of "packaged" and included in Jin Jiang International's plan to go public in Hong Kong. Recently, Jin Jiang International's listing has entered a period of silence. The reporter learned that it plans to go public in Hong Kong to raise funds of 2 billion Hong Kong dollars, of which 1.7 billion Hong Kong dollars will be mainly used to accelerate the development of Jin Jiang Inn. A Jinjiang Inn spokesman said that the speed of opening stores will be accelerated in the future, and will strive to expand to 500 stores within three years.

Regarding the accelerated actions of competitors, Shen Nanpeng said that the market size of domestic budget hotels is large enough, and it is still in a very early stage, and the situation should be a win-win situation. As for Home Inns itself, the prospectus shows that Home Inns will use $45 million of IPO proceeds to expand the hotel chain and improve hotel facilities, $7.5 million to repay the debt of Capital Tourism International Hotel Group, and the rest will be invested in the company's operating capital.

A new beginning

"My goal in the future is very simple, that is, to do well in Sequoia China Fund." Shen Nanpeng said at the celebration reception. After two ventures, Shen Nanpeng founded Sequoia Capital's China Fund in September 2005 as a partner. Here, he and his partner Zhang Fan quickly raised $200 million in venture capital to invest in various industries that are rapidly developing in China. By the first half of 2006, Sequoia China has successively invested in 9 companies.

"Homeinn's successful listing has given these companies a good start." Shen Nanpeng said, as the first non-Internet and non-IT pure consumer service company, Homeinn's listing on Nasdaq will give future Similar companies build a brand new indicator.

Zhang Fan also said that China's previously listed overseas companies mainly include two types, one is China Telecom, Sinopec and other monopoly companies, the other is new media or Internet companies such as Sina and Ctrip, and Home Inns It is the first pure traditional enterprise. Zhang Fan predicts that Home Inns will receive a lot of enthusiasm from the capital market, and will play a milestone role in the overseas listing of Chinese companies in traditional fields.

In just three years, Shen Nanpeng has led Chinese companies to Nasdaq twice. On October 26, Shen Nanpeng told Nasdaq managers that he would be a frequent visitor to this market in the future. "I believe Sequoia China will help more Chinese companies to come to Nasdaq," he said. "There will be many such opportunities in the future."

From the "Economic Observer".