Check into Home Inns HMIN again

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I bought some Home Inns (HMIN) again yesterday. Not surprisingly the stock dropped after I bought it, as things usually happen that way. But my time frame is from couple months to couple years, so I am not worried. The recent weakness of the stock is expected due to the new offerings and lock up expiration. Also I heard some rumors in China (two key managers left the company to join competitors recently, according to 21st century business herald). At the same time, the competition is heating up among budget hotels, as shown in this article from Pacific Epoch.

Despite all these, I think the postives overweigh the negatives. Home Inns is the top brand in China budget hotels; the increasing business travel and leisure travel make it hard to book a room in budget hotels in China nowadays. Home Inns is looking for new ways to expand brand (I’m not talking about text message): they just launched the Home Inns credit card with the China Merchants bank (bank web site link, Home Inns web site news). 

Another thing I noticed is the insiders Neil Shen, James Liang (and his wife), Ji Qi, David Sun (CEO) and May Wu (CFO) are not selling in this filing. While we don’t solely base our investment decision on insiders’ buy/sell, this does give some reassurance about the health of the business.