InterContinental Hotels Eyes Expansion in China

on May 28, 2013

InterContinental Hotels Group (LON:IHG) is planning to almost double the number of hotels it operates in China, Bloomberg has reported.

The world’s largest hotel manager with a market value of a little more than ₤5 billion is eyeing rapid expansion in China despite signs that the world’s second largest economy is slowing down.
On Tuesday, May 28 IHG opened its 200th hotel in Greater China, which includes China, Hong Kong, Macau and Taiwan. Also on Tuesday, Bloomberg quoted chief executive Richard Solomons as saying in an interview in Shanghai that over the next three to five years the company planned to expand to 100 Chinese cities from 70 cities now. “We’ve seen the growth flatten out now, but you have to take a long-term view, which is what we do…It’s going to be a very powerful market for hotels in the long term even if there’s some short-term slowdown,” Solomons opined.

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IHG celebrated its 30th anniversary in China on Tuesday with the opening of the InterContinental Shanghai Ruijin. “The opening of our 200th hotel in China brings IHG’s leadership in the market to the next level and is a strong testimony to the success of our brand and our relationship with local owners,” Solomons said.
China’s first-quarter economic growth of 7.7 percent has missed the 8 percent median forecast in a survey of 41 economists polled by Bloomberg. Factory production and investment in fixed assets have missed projections, while manufacturing and services have declined.

**Analysts on IHG**
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Earlier this month, Morgan Stanley analysts reaffirmed their overweight rating on IHG’s shares in a research issued and gave the stock a price target of ₤23.0, while Goldman Sachs reiterated their “buy” rating with a price target of ₤22.50.

Eleven analysts have rated IHG’s shares with a “hold” rating and twelve have assigned them a “buy” rating. As of May 17 the stock had an average rating of “buy” and a price target of ₤20.3608.
IHG’s share price rose by 2.25 percent to ₤19.55 in early morning trading in London on Tuesday, May 28. The stock has climbed by 14.2 percent in the year-to-date.
**IHG’s share price was ₤19.45 as of 28.05.2013, 08.28 BST.**


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