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7 Days Group Holdings Limited Announces Unaudited 2012 Fourth Quarter and Full Year Financial Results

7 Days Group Holdings Limited Announces Unaudited 2012 Fourth Quarter and Full
                            Year Financial Results

- Fourth quarter net revenues rose 27.6% year-over-year to RMB696.0 million,
exceeding guidance.

- Fourth quarter adjusted EBITDA rose 24.1% year-over year to RMB146.4
million.

- 109 net hotels added in fourth quarter to a total of 1,345 hotels in
operation.

- Total transaction value[1], a measure of total room revenue generated from
all hotels, reached RMB5,585.7 million in 2012, an increase of 50.4%
year-over-year.

- 401 net hotels added in the full year 2012.

PR Newswire

GUANGZHOU, China, March 11, 2013

GUANGZHOU, China, March 11, 2013 /PRNewswire/ --7 Days Group Holdings Limited
("7 Days Group" or the "Company") (NYSE: SVN), a leading and fast growing
national economy hotel chain based in China, today announced its unaudited
financial results for the fourth quarter and full year 2012.

Fourth Quarter 2012 Financial Highlights

  oTotal net revenues for the fourth quarter 2012 increased by 27.6%
    year-over-year to RMB696.0 million (US$111.7 million)[2].
  oIncome from operations for the fourth quarter 2012 was RMB51.1 million
    (US$8.2 million), compared to RMB34.9 million in the fourth quarter 2011.
    Non-GAAP income from operations for the quarter was RMB56.3 million
    (US$9.0 million), compared to RMB44.5 million for the same period in
    2011.
  oEBITDA for the fourth quarter was RMB141.2 million (US$22.7 million), an
    increase of 30.3% year-over-year from RMB108.4 million for the same period
    in 2011. Adjusted EBITDA for the quarter was RMB146.4 million (US$23.5
    million), an increase of 24.1% year-over-year. EBITDA margin was 20.3%
    compared to 19.9% in the same period in 2011. Adjusted EBITDA margin was
    21.0%, compared to 21.6% in the prior year period.
  oNet income attributable to the Company's ordinary shareholders for the
    quarter was RMB37.9 million (US$6.1 million), compared to RMB35.2 million
    for the same period in 2011. Non-GAAP net income attributable to the
    Company's ordinary shareholders for the quarter was RMB43.1 million
    (US$6.9 million), representing a year-over-year decrease of 3.8%.
  oBasic and diluted earnings per ADS[3] were RMB0.77 (US$0.12) and RMB0.77
    (US$0.12) respectively. Non-GAAP basic and diluted earnings per ADS were
    RMB0.88 (US$0.14) and RMB0.88 (US$0.14), respectively.
  oNet operating cash inflow was RMB154.5 million (US$24.8 million), compared
    to RMB106.1 million in the same period in 2011.

Full Year 2012 Financial Highlights

  oTotal net revenues for the full year 2012 increased by 27.6%
    year-over-year to RMB2,557.2 million (US$410.5 million).
  oIncome from operations for 2012 was RMB240.3 million (US$38.6 million),
    compared to RMB151.1 million in 2011. Non-GAAP income from operations
    increased by 37.4% to RMB267.4 million (US$42.9 million) from RMB194.6
    million in 2011.
  oEBITDA for the full year 2012 was RMB581.3 million (US$93.3 million), an
    increase of 41.0% year-over-year from RMB412.1 million in 2011. Adjusted
    EBITDA was RMB608.4 million (US$97.7 million), an increase of 33.5%
    year-over-year compared to RMB455.6 million in 2011. EBITDA margin was
    22.7% compared to 20.6% in 2011. Adjusted EBITDA margin was 23.8% compared
    to 22.7% in 2011.
  oNet income attributable to the Company's ordinary shareholders for 2012
    was RMB176.0 million (US$28.3 million), compared to RMB128.9 million in
    the previous year. Non-GAAP net income attributable to the Company's
    ordinary shareholders was RMB203.2 million (US$32.6 million), representing
    a year-over-year increase of 17.9%.
  oBasic and diluted earnings per ADS were RMB3.55 (US$0.57) and RMB3.54
    (US$0.57), respectively. Non-GAAP basic and diluted earnings per ADS were
    RMB4.10 (US$0.66) and RMB4.09 (US$0.66), respectively.
  oNet operating cash inflow was RMB572.5 million (US$91.9 million), compared
    to RMB457.5 million in 2011.

Fourth Quarter and Full Year 2012 Operational Highlights

  oAdded 109 net hotels, comprising 32 net leased-and-operated hotels and 77
    net managed hotels in the fourth quarter 2012.
  oAdded 401 net hotels, comprising 81 net leased-and-operated hotels and 320
    net managed hotels in the full year 2012.
  oAs of December 31, 2012, 7 Days Group had 1,345 hotels in operation,
    consisting of 492 leased-and-operated hotels and 853 managed hotels,
    representing a total of 133,497 rooms covering 208 cities.
  oAs of December 31, 2012, there were a total of 223 hotels in the pipeline,
    including 21 leased-and-operated hotels under conversion and 202 managed
    hotels contracted but not yet opened.
  oFor the fourth quarter 2012, occupancy rates for leased-and-operated
    hotels, managed hotels and all hotels were 79.2%, 77.4% and 78.1%,
    respectively, compared to 86.4%, 80.0% and 82.8%, respectively, in the
    fourth quarter 2011.
  oFor the full year 2012, the occupancy rates for leased-and-operated
    hotels, managed hotels and overall occupancy rates were 82.9%, 80.3% and
    81.3%, respectively, compared to 87.9%, 81.5% and 84.6%, respectively, in
    2011. The year-over-year decrease in occupancy rates in the full year 2012
    was primarily a result of the impact from the macro economic situation.
  oRevPAR[4] for leased-and-operated hotels in the fourth quarter 2012 was
    RMB133.4, compared to RMB143.3 in the same period in 2011. RevPAR for
    managed hotels for the period was RMB121.9, compared to RMB123.5 for the
    same period in 2011. For the full year 2012, RevPAR for all hotels
    decreased to RMB131.5 from RMB136.2 in 2011; while RevPAR for
    leased-and-operated hotels and managed hotels was RMB138.3 and RMB126.9,
    respectively, compared to RMB146.0 and RMB127.0, respectively, in the full
    year 2011.
  oAs of December 31, 2012, the number of 7 Days Club members was
    approximately 52.9 million, a 57% increase from 33.8 million as of
    December 31, 2011.

    Definition of Total transaction value: total room revenue from
[1] leased-and-operated hotels and managed hotels. The metric is highlighted
    as an indicator of the scale and reach of 7 Days' brands.
    The Company's reporting currency is Renminbi ("RMB"). The translation of
    amounts from RMB to United States Dollars is solely for the convenience of
    the reader. RMB amounts included in this press release have been
[2] translated into U.S. dollars at the exchange rate of December 31, 2012 as
    set forth in the H.10 statistical release of the Federal Reserve Board,
    which was US$1.00 = RMB6.2301. No representation is made that RMB amounts
    could have been, or could be, converted into U.S. Dollars at that rate or
    at any other rate on December 31, 2012.
[3] Each ADS represents 3 of the Company's ordinary shares.
[4] RevPAR represents revenue per available room.

Recent Business Developments:

Mr. Yuezhou Lin, 7 Days Group's Chief Executive Officer and Director,
commented, "We are pleased to report a strong fourth quarter with financial
results exceeding our guidance, concluding a solid year of steady strategic
and operational progress.With our healthy pipeline and increasing economies
of scale, we expect to maintain our fast expansion pace in 2013, which we
believe will further solidify our position as the market leader in the economy
hotel industry."

On February 28, 2013, 7 Days Group announced it entered into a definitive
Agreement and Plan of Merger with various parties pursuant to which Keystone
Lodging Company Limited will acquire 7 Days Group for US$4.60 per ordinary
share or US$13.80 per American Depositary Share, each representing three
ordinary shares ("ADSs"), through the merger of its wholly owned acquisition
subsidiary, Keystone Lodging Acquisition Limited, with and into 7 Days Group,
with 7 Days Group continuing as the surviving corporation and a wholly owned
subsidiary of Keystone Lodging Company Limited (the "Merger"). The
consideration to be paid in the Merger represents a 30.6% premium over the
closing price of US$10.57 per ADS as quoted by the New York Stock Exchange on
September 25, 2012, the last trading day prior to 7 Days Group's announcement
on September 26, 2012 that it had received a "going private" proposal, and
implies an equity value for 7 Days Group of approximately US$688 million, on a
fully diluted basis.

For detailed information, please refer to the Company's news release on
February 28, 2013 at the Company's website (http://en.7daysinn.cn).

Fourth Quarter 2012 Unaudited Financial Results

Gross revenues.  Gross revenues for the fourth quarter 2012 were RMB736.4
million (US$118.2 million), representing a year-over-year increase of 27.3%
from RMB578.5 million in the fourth quarter 2011 and an increase of 1.7% from
RMB724.3 million in the third quarter 2012.

Gross revenues from leased-and-operated hotels.  Gross revenues from
leased-and-operated hotels for the fourth quarter 2012 amounted to RMB648.4
million (US$104.1 million), representing a 22.9% increase from RMB527.6
million in the fourth quarter 2011 and an increase of 0.3% from RMB646.3
million in the third quarter 2012.

Gross revenues from managed hotels. Gross revenues from managed hotels for the
fourth quarter 2012 increased by 72.9% to RMB88.0 million (US$14.1 million)
from RMB50.9 million in the same period in 2011, and increased by 12.9% from
RMB77.9 million in the third quarter 2012. During the fourth quarter 2012, the
Company opened 77 net managed hotels.

Total net revenues. Total net revenues for the fourth quarter 2012 totaled
RMB696.0 million (US$111.7 million), representing a year-over-year increase of
27.6% from RMB545.6 million in fourth quarter 2011 and a quarter-over-quarter
increase of 1.8% from RMB683.4 million in the third quarter 2012, primarily
resulting from the continued growth in the number of hotels in operation.

Hotel operating costs.  Hotel operating costs for the fourth quarter 2012 were
RMB560.6 million (US$90.0 million), or 80.5% of total net revenues, compared
with 77.5% of total net revenues in the fourth quarter 2011 and 75.7% of total
net revenues in the third quarter 2012.

Sales and marketing expenses. Sales and marketing expenses for the fourth
quarter 2012 were RMB31.7 million (US$5.1 million), or 4.6% of total net
revenues, compared with 3.4% of total net revenues in the same period of 2011
and 2.8% in the third quarter 2012. The quarter-over-quarter increase in sales
and marketing expenses was due to business development activities and
associated media and brand promotions at the year end and slightly increased
advertising expenses and sales commissions during the fourth quarter 2012.

General and administrative expenses.  General and administrative expenses for
the fourth quarter 2012 were RMB52.6 million (US$8.4 million), or 7.6% of
total net revenues, compared to RMB69.5 million, or 12.7% of total net
revenues in the same period of 2011, and RMB57.6 million, or 8.4% of total net
revenues in the third quarter 2012. The year-over-year decrease in general and
administrative expenses was primarily due to the decreased impairment loss for
property and equipment as well as decreased share-based compensation expenses.

Accordingly, total operating costs and expenses amounted to RMB644.9 million
(US$103.5 million), representing 92.7% of total net revenues, compared to
93.6% of total net revenues in the same period of 2011 and 86.9% in the third
quarter 2012.

Income from operations. Income from operations for the fourth quarter 2012 was
RMB51.1 million (US$8.2 million), compared to RMB34.9 million in the fourth
quarter 2011 and RMB89.6 million in the third quarter 2012. Non-GAAP income
from operations was RMB56.3 million (US$9.0 million), compared to RMB44.5
million for the same period of 2011 and RMB96.8 million in the third quarter
2012.

EBITDA.  EBITDA for the fourth quarter was RMB141.2 million (US$22.7 million),
an increase of 30.3% year-over-year from RMB108.4 million for the same period
in 2011. Adjusted EBITDA for the quarter was RMB146.4 million (US$23.5
million) an increase of 24.1% year-over-year. EBITDA margin was 20.3% compared
to 19.9% in the same period in 2011. Adjusted EBITDA margin was 21.0% compared
to 21.6% in the prior year period.

Interest expense. Interest expense for the fourth quarter 2012 was RMB2.9
million, (US$0.5 million) compared to RMB4.6 million for the same period of
2011 and RMB5.2 million in the third quarter 2012.

Income tax expense.  Income tax expense for the fourth quarter 2012 was
RMB13.8 million (US$2.2 million), compared to RMB2.5 million in the same
period of 2011 and RMB25.0 million in the third quarter 2012.

Net income  attributable to 7 Days Group Holdings Limited ordinary
shareholders. Net income attributable to 7 Days Group Holdings Limited
ordinary shareholders was RMB37.9 million (US$6.1 million) in the fourth
quarter 2012, compared to RMB35.2 million in the fourth quarter 2011 and
RMB63.6 million in the third quarter 2012.

Non-GAAP net income.  Non-GAAP net income was RMB43.1 million (US$6.9
million), compared to Non-GAAP net income of RMB44.8 million for the fourth
quarter 2011 and Non-GAAP net income of RMB70.8 million in the third quarter
2012.

Basic and diluted earnings per ADS.  Basic and diluted earnings per ADS were
RMB0.77 (US$0.12) and RMB0.77 (US$0.12), respectively, for the fourth quarter
2012, compared to basic and diluted earnings per ADS of RMB0.70 in the fourth
quarter 2011 and basic and diluted earnings per ADS of RMB1.29 in the third
quarter 2012. Non-GAAP basic and diluted earnings per ADS were RMB0.88
(US$0.14) and RMB0.88 (US$0.14), respectively, for the fourth quarter 2012,
compared to non-GAAP basic and diluted earnings per ADS of RMB0.90 and
RMB0.89, respectively, in the same period of 2011 and basic and diluted
earnings per ADS of RMB1.44 and RMB1.43, respectively, in the third quarter
2012.

Cash and pledged bank deposits. As of December 31, 2012, the Company had cash
and pledged bank deposits of RMB382.3 million (US$61.4 million), representing
a quarter-over-quarter decrease of 1.6% from RMB388.6 million as of September
30, 2012 and a year-over-year decrease of 25.5% from RMB513.1 million as of
December 31, 2011, respectively.

Operating cash flow. Net operating cash inflow for the fourth quarter 2012 was
RMB154.5million (US$24.8 million), representing an increase of 45.5% from
RMB106.1 million in the fourth quarter 2011.

Full Year 2012 Unaudited Financial Results

Gross revenues. Gross revenues for the full year 2012 were RMB2,709.4 million
(US$434.9 million), representing a year-over-year increase of 27.3% from
RMB2,127.9 million in the full year 2011.

Gross revenues from leased-and-operated hotels.  Gross revenues from
leased-and-operated hotels for 2012 amounted to RMB2,409.8 million (US$386.8
million), representing a 25.0% increase from RMB1,927.5 million in 2011.
During 2012, the Company opened 81 net leased-and-operated hotels.

Gross revenues from managed hotels. Gross revenues from managed hotels for
2012 increased by 49.5% to RMB299.6 million (US$48.1 million) from RMB200.4
million in 2011. During 2012, the Company opened 320 net managed hotels.

Total net revenues. Total net revenues for 2012 were RMB2,557.2 million
(US$410.5 million), representing a year-over-year increase of 27.6% from
RMB2,003.4 million in the full year 2011, primarily resulting from the
continued growth in the number of hotels in operation.

Hotel operating costs.  Hotel operating costs for 2012 were RMB2,033.5 million
(US$326.4 million), or 79.5% of total net revenues, compared with 79.5% of
total net revenues in 2011.

Sales and marketing expenses. Sales and marketing expenses for 2012 totaled
RMB82.1 million (US$13.2 million), or 3.2% of total net revenues, compared
with 2.5% of total net revenues in 2011. The year-over-year increase in sales
and marketing expenses was due to business development activities and
associated media and brand promotions at the year end and increased
advertising expenses and sales commissions during 2012.

General and administrative expenses.  General and administrative expenses for
2012 were RMB201.3 million (US$32.3 million), or 7.9% of total net revenues,
compared to RMB209.8 million, or 10.5% of total net revenues in 2011. The
year-over-year decrease in general and administrative expenses was a result of
decreased impairment loss for property and equipment as well as decreased
share-based compensation expenses in 2012.

Accordingly, total operating costs and expenses were RMB2,316.9 million
(US$371.9 million), representing 90.6% of total net revenues, compared to
92.5% of total net revenues in 2011.

Income from operations. Income from operations for 2012 was RMB240.3 million
(US$38.6 million), compared to RMB151.1 million in 2011. Non-GAAP income from
operations was RMB267.4 million (US$42.9 million), compared to RMB194.6
million for 2011.

EBITDA.  EBITDA was RMB581.3 million (US$93.3 million), an increase of 41.0%
year-over-year from RMB412.1 million in 2011. Adjusted EBITDA was RMB608.4
million (US$97.7 million) an increase of 33.5% year-over-year. EBITDA margin
was 22.7% compared to 20.6% in 2011. Adjusted EBITDA margin was 23.8% compared
to 22.7% in 2011.

Interest expense. Interest expense for the full year 2012 was RMB21.5 million
(US$3.4 million) compared to RMB7.2 million for 2011.

Income tax expense.  Income tax expense for 2012 was RMB67.5 million (US$10.8
million), compared to RMB36.3 million in the full year 2011.

Net income attributable to 7 Days Group Holdings Limited ordinary
shareholders. Net income attributable to 7 Days Group Holdings Limited
ordinary shareholders was RMB176.0 million (US$28.3 million) in the full year
2012, compared to RMB128.9 million in 2011.

Non-GAAP net income.  Non-GAAP net income was RMB203.2 million (US$32.6
million), compared to Non-GAAP net income of RMB172.4 million in 2011.

Basic and diluted earnings per ADS.  Basic and diluted earnings per ADS were
RMB3.55 (US$0.57) and RMB3.54 (US$0.57), respectively, for the full year 2012,
compared to basic and diluted earnings per ADS of RMB2.58 and RMB2.56 for
2011, respectively. Non-GAAP basic and diluted earnings per ADS were RMB4.10
(US$0.66) and RMB4.09 (US$0.66), respectively, for the full year 2012,
compared to non-GAAP basic and diluted earnings per ADS of RMB3.45 and RMB3.43
in the full year 2011.

Operating cash flow. Net operating cash inflow for the full year 2012 was
RMB572.5 million (US$91.9 million), representing an increase of 25.1% from
RMB457.5 million in 2011.

Guidance

The Company expects to generate total net revenues in the range of RMB620
million to RMB635 million in the first quarter 2013 and full year 2013 total
net revenues to grow 15% to 18% over the full year 2012. For the full year
2013, the Company expects to open 360 new hotels, including 50
leased-and-operated hotels and 310 managed hotels. These forecasts reflect the
Company's current and preliminary view, which is subject to change.

Conference Call

7 Days Group Holdings Limited senior management will host a conference call at
10:00 pm (Eastern) / 7:00 pm (Pacific) Monday, March 11, 2013, which is 10:00
am (Beijing) on Tuesday, March 12, 2013 to discuss its fourth quarter and full
year 2012 financial results and recent business activity. The conference call
may be accessed by calling the following numbers:

China:         800 8190 121
Hong Kong:     852 2475 0994
US Toll Free:  1 866 519 4004
US New York:   1 718 354 1231
International: 65 6723 9381
Passcode:      7Days

A live webcast of the conference call and replay will be available on the
investor relations page of 7 Days Group's website at http://en.7daysinn.cn/.

A telephone replay will be available shortly after the call. The dial-in
details are as follows:

US:                   1 855 452 5696
International:        61 2 8199 0299
Conference ID number: 97171556

About 7 Days Group Holdings Limited

7 Days Group is a leading and fast growing national economy hotel chain based
in China. It converts and operates limited service economy hotels across major
metropolitan areas in China under its award-winning "7 Days Inn" brand. The
Company strives to offer consistent and high-quality accommodations and
services primarily to the growing population of value conscious business and
leisure travelers who demand affordable, clean, comfortable, convenient and
safe lodging, and to respond to its guests' needs.

Use of Non-GAAP Financial Measures

To supplement 7 Days Group's unaudited financial results presented in
accordance with U.S. GAAP, the Company has used the following non-GAAP
measures defined as non-GAAP financial measures by the Securities and Exchange
Commission (the "SEC") to report its financial results:

  oNon-GAAP income from operations represents income from operations reported
    in accordance with GAAP, excluding share-based compensation expense.
  oNon-GAAP net income represents net income reported in accordance with
    GAAP, excluding share-based compensation expense.
  oNon-GAAP earnings per ADS represents non-GAAP net income divided by the
    number of ADS used in computing basic and diluted earnings per ADS.
  oEBITDA represents net income reported in accordance with GAAP, adjusted
    for the effects of interest income and expense, provision for income
    taxes, depreciation and amortization.
  oAdjusted EBITDA represents EBITDA, excluding share-based compensation
    expense.

The Company believes EBITDA is a useful financial metric to assess its
operating and financial performance before the impact of investing and
financing transactions, if any, and income taxes. In addition, 7 Days Group
believes that EBITDA is widely used by other companies in the lodging industry
and may be used by investors as a measure of its financial performance. Given
the significant investments that 7 Days Group has made in the past in property
and equipment, depreciation and amortization expense comprises a meaningful
portion of its cost structure. 7 Days Group believes that EBITDA will provide
investors with a useful tool for comparability between periods because it
eliminates depreciation and amortization expense attributable to capital
expenditures. The presentation of EBITDA should not be construed as an
indication that the Company's future results will be unaffected by other
charges and gains the Company considers to be outside the ordinary course of
its business. 7 Days Group also calculates Adjusted EBITDA excluding
share-based compensation expense. The Company prepares its financial
statements in accordance with GAAP and, accordingly, expenses its employee
share options. Since share-based compensation expenses are non-cash expenses,
the Company believes excluding them from its calculation of EBITDA allows it
to provide investors with a more useful tool for assessing its operating and
financial performance.

The use of EBITDA and Adjusted EBITDA has certain limitations. Depreciation
and amortization expense for various long-term assets, such as property and
equipment, income tax expense, interest expense and interest income have been
and will be incurred and are not reflected in the presentation of EBITDA. Each
of these items should also be considered in the overall evaluation of its
results. Additionally, EBITDA does not consider capital expenditures and other
investing activities and should not be considered as a measure of the
Company's liquidity. The Company compensates for these limitations by
providing the relevant disclosure of its depreciation and amortization,
interest expense and interest income, income tax expense, capital
expenditures, share-based compensation expense and other relevant items both
in its reconciliations to the GAAP financial measures and in its consolidated
financial statements, all of which should be considered when evaluating the
Company's performance. The terms EBITDA and Adjusted EBITDA are not defined
under GAAP, and EBITDA and Adjusted EBITDA are not measures of net income,
operating income, operating performance or liquidity presented in accordance
with GAAP. When assessing the Company's operating and financial performance,
investors should not consider this data in isolation or as a substitute for
the Company's net income, operating income or any other operating performance
measure that is calculated in accordance with GAAP. In addition, the Company's
EBITDA and Adjusted EBITDA may not be comparable to EBITDA or Adjusted EBITDA
or similarly titled measures utilized by other companies since such other
companies may not calculate EBITDA and Adjusted EBITDA in the same manner as
the Company does.

For reasons same to the use of EBITDA and Adjusted EBITDA described above, the
Company has also reported net income, basic and diluted earnings per ADS and
income (loss) from operations on a non-GAAP basis, excluding share-based
compensation expenses in the relevant period. These non-GAAP operating
measures are useful for understanding and assessing the Company's underlying
business performance and operating trends and the Company expects to report
net income, basic and diluted earnings per ADS and income from operations on a
non-GAAP basis using a consistent method on a quarterly basis going forward.

7 Days Group believes that both management and investors benefit from
referring to these non-GAAP financial measures in assessing 7 Days Group's
financial performance and liquidity and when planning and forecasting future
periods. Readers are cautioned not to view non-GAAP results on a stand-alone
basis or as a substitute for results under GAAP, or as being comparable to
results reported or forecasted by other companies, and should refer to the
reconciliation of GAAP results with non-GAAP results for the periods set forth
in the tables at the end of this release.

Safe Harbor Statement

This press release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and as defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar statements
and including, among other things, 7 Days Group's revenue guidance for the
first quarter and the full year 2012 and business forecast for 2012 including
the expected number of hotel to be opened (including the breakdown of expected
new leased-and-operated hotels and new managed hotels), Company's business
strategies, its ability to offer consistent and high-quality accommodations
and services at an affordable price, its ability to leverage economies of
scale and its ability to achieve strict cost controls and to deliver continued
growth. These forward-looking statements are not historical facts but instead
represent only the Company's belief regarding future events, many of which, by
their nature, are inherently uncertain and outside of the Company's control.
The Company's actual results and financial condition and other circumstances
may differ, possibly materially, from the anticipated results and financial
condition indicated in these forward-looking statements. In particular, the
Company's operating results for any period are impacted significantly by the
mix of leased-and-operated hotels and managed hotels in its chain, causing the
Company's operating results to fluctuate and making them difficult to predict.

Other factors that could cause forward-looking statements to differ materially
from actual future events or results include risks and uncertainties related
to: uncertainties associated with factors typically affecting the lodging
industry, including changes in economic conditions, adverse weather
conditions, natural disasters or outbreaks of serious contagious diseases in
markets where the Company has a presence; uncertainties regarding the
Company's ability to respond to competitive pressures; uncertainties regarding
the Company's ability to manage its expected growth; uncertainties regarding
the Company's ability to continue its growth and achieve profitability; risks
associated with the Company's limited operating history and historical
operating losses; uncertainties regarding the Company's ability to fund its
working capital needs; uncertainties regarding its ability to successfully and
timely identify, secure or operate additional hotel properties. The financial
information contained in this release should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
2010 Annual Report on Form 20-F filed with the SEC on May 4, 2011, which is
available on the SEC's website at www.sec.gov. For a discussion of other
important factors that could adversely affect the Company's business,
financial condition, results of operations and prospects, see "Risk Factors"
beginning on page 7 of the Company's 2010 Annual Report on Form 20-F. The
Company's results of operations for the fourth quarter and the full year of
2011 are not necessarily indicative of its operating results for any future
periods. Any projections in this release are based on limited information
currently available to the Company, which is subject to change. Although such
projections and the factors influencing them will likely be changed, the
Company will not necessarily update the information. Such information speaks
only as of the date of this release.

Statement Regarding Unaudited Financial Information

The financial information set forth above is unaudited and subject to
adjustments. Adjustments to the financial statements may be identified when
the annual financial statements are prepared and audit work is performed for
the year end audit, which could result in significant differences from this
unaudited financial information.

Contacts:

Investor Contact:
Vivian Chen, Investor Relations Director
7 Days Group Holdings Limited
+86-20-8922-5858
IR@7daysinn.cn

Investor Relations (US):
Mahmoud Siddig, Managing Director
Taylor Rafferty
Tel: +1 (212) 889-4350
7DaysInn@taylor-rafferty.com

Investor Relations (HK):
Candy Cheung, Senior Consultant
Taylor Rafferty
+852 3196 3712
7DaysInn@taylor-rafferty.com



-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --



7 Days Group Holdings Limited
Consolidated balance sheet information


                                      Quarter Ended
                                      31/Dec/11  30/Sep/12  31/Dec/12
                                      RMB' 000   RMB' 000   RMB' 000  US$'000
ASSETS
Current assets:
Cash                                 493,256    385,070    378,809   60,803
Pledged bank deposits                19,852     3,484      3,443     553
Short-term investment                10,000     -          -         -
Accounts receivable                  7,881      16,870     17,015    2,731
Prepaid rent                         152,629    173,112    171,370   27,507
Other prepaid expenses and current   52,550     69,433     77,608    12,457
assets
Hotel supplies                        47,371     51,904     56,591    9,083
Amounts due from related parties      -          87         87        14
Deferred tax assets                   19,842     19,144     26,222    4,209
Total current assets                 803,381    719,104    731,145   117,357
Property and equipment, net          1,701,431  1,851,653  1,970,763 316,329
Rental deposits                      69,861     90,731     90,824    14,578
Land use right                        24,044     23,581     23,426    3, 760
Prepaid rent                         73,419     63,822     71,088    11,410
Intangible assets, net                30,426     27,272     26,221    4,209
Goodwill                              61,041     61,041     61,041    9,798
Other non-current assets              500        -          -         -
Deferred tax assets                  46,096     62,615     62,513    10, 034
Total assets                         2,810,199  2,899,819  3,037,021 487,475
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable                     249,592    247,871    300,240   48,192
Bills payable                        16,009     13,182     11,475    1,842
Short-term bank borrowings           334,686    71,000     130,015   20,869
Accrued expenses and other payables  418,308    477,603    511,800   82,150
Amounts due to related parties       333        1,850      2,601     417
Income taxes payable                 25,509     36,947     25,617    4,112
Total current liabilities            1,044,437  848,453    981,748   157,582
Long-term bank borrowings             -          178,975    121,381   19,483
Accrued lease payment                206,113    238,642    256,472   41,167
Unfavorable lease contract liability  7,812      7,305      7,136     1,145
Refundable deposits                  15,823     15,050     14,850    2,384
Deferred revenue                     770        608        -         -
Deferred rebate income                6,663      5,984      5,727     919
Borrowings from related parties      1,388      892        752       121
Income taxes payable                  6,644      6,644      3,317     532
 Deferred tax liabilities           4,565      2,935      7,527     1,208
Total liabilities                    1,294,215  1,305,488  1,398,910 224,541
Equity:
Ordinary shares                      141,080    141,133    141,317   22,683
Treasury stock                        -          (67,137)   (67,137)  (10,776)
Additional paid-in capital           1,623,275  1,638,948  1,649,880 264,824
Accumulated other comprehensive      330        1,136      (721)     (116)
income
Accumulated deficit                  (238,348)  (100,203)  (62,303)  (10,001)
Total 7 Days Group Holdings Limited   1,526,337  1,613,877  1,661,036 266,614
share holders' equity
Non-controlling interests             (10,353)   (19,546)   (22,925)  (3,680)
Total equity                          1,515,984  1,594,331  1,638,111 262,934
Total liabilities and equity          2,810,199  2,899,819  3,037,021 487,475

7 Days Group Holdings Limited

Unaudited Consolidated Statements of Income and Comprehensive Income


                     Quarter Ended                              Year Ended
                     Dec 31     Sep 30     Dec 31               Dec 31       Dec 31
                     2011       2012       2012                 2011         2012
                     RMB'000    RMB'000    RMB'000   US$'000    RMB'000      RMB'000     US$'000
Total Revenues      578,481    724,252    736,385   118,198    2,127,938    2,709,356   434,881
Leased-and-operated 527,609    646,330    648,427   104,080    1,927,537    2,409,805   386,800
hotels
Managed hotels      50,872     77,922     87,958    14,118     200,401      299,551     48,081
Less: Business tax  (32,852)   (40,854)   (40,355)  (6,477)    (124,560)    (152,171)   (24,425)
and surcharges
Net revenues        545,629    683,398    696,030   111,721    2,003,378    2,557,185   410,456
Operating costs and
expenses
Hotel operating     (422,878)  (517,129)  (560,637) (89,988)   (1,593,260)  (2,033,508) (326,400)
costs
Rental expenses      (152,923)  (179,513)  (190,645) (30,601)   (571,351)    (707,692)   (113,592)
Staff cost           (88,794)   (100,887)  (114,169) (18,325)   (317,374)    (406,623)   (65,267)
Depreciation and     (66,961)   (80,602)   (84,790)  (13,610)   (241,020)    (314,189)   (50,431)
amortization
Hotel supplies       (25,967)   (35,800)   (40,439)  (6,491)    (97,452)     (135,112)   (21,687)
Utilities            (35,618)   (47,744)   (46,554)  (7,472)    (145,468)    (190,030)   (30,502)
Other                (52,615)   (72,583)   (84,040)  (13,489)   (220,595)    (279,862)   (44,921)
Sales and marketing (18,336)   (19,059)   (31,702)  (5,089)    (49,222)     (82,116)    (13,181)
expenses
General and
administrative       (69,542)   (57,596)   (52,555)  (8,436)    (209,786)    (201,271)   (32,306)
expenses
Total operating     (510,756)  (593,784)  (644,894) (103,513)  (1,852,268)  (2,316,895) (371,887)
costs and expenses
Income from         34,873     89,614     51,136    8,208      151,110      240,290     38,569
operations
Other income
(expenses)
Interest income     2,350      1,716      800       128        6,224        7,887       1,266
Interest expense    (4,627)    (5,221)    (2,875)   (461)      (7,212)      (21,459)    (3,444)
Equity income (loss) -          -          -         -          120          -           -
of an affiliate
Income before income 32,596     86,109     49,061    7,875      150,242      226,718     36,391
tax
 Income tax        (2,507)    (25,011)   (13,844)  (2,222)    (36,259)     (67,540)    (10,841)
expenses
Net income          30,089     61,098     35,217    5,653      113,983      159,178     25,550
Net income
attributable to      5,131      2,511      2,683     431        14,903       16,867      2,707
non-controlling
interest
Net income
attributable to 7
Days                 35,220     63,609     37,900    6,084      128,886      176,045     28,257
Group Holdings
Limited ordinary
shareholders
Basic earnings per  0.23       0.43       0.26      0.04       0. 86        1.18        0.19
ordinary share
Diluted earnings    0.23       0.43       0.26      0.04       0.85         1.18        0.19
per ordinary share
Other Comprehensive
income (loss)
 Foreign currency
transaction          (2,861)    480        (1,857)   (298)      (15,319)     (1,051)     (169)
adjustment, net of
nil income tax
Comprehensive       27,228     61,578     33,360    5,355      98,664       158,127     25,381
income
 Less:
Comprehensive income
attributable to      (5,131)    (2,511)    (2,683)   (431)      (14,903)     (16,867)    (2,707)
noncontrolling
interest
Comprehensive
income attributable
to
7 Days Group         32,359     64,089     36,043    5,786      113,567      174,994     28,088
Holdings Limited
ordinary
shareholders



7 Days Group Holdings Limited

Reconciliation of GAAP and Non-GAAP Results


EBITDA (non-GAAP)
                                         Quarter Ended                      Year Ended
                                         Dec 31   Sep 30   Dec 31           Dec 31   Dec 31
                                         2011     2012     2012             2011     201
                                         RMB'000  RMB'000  RMB'000 US$'000  RMB'000  RMB'000 US$'000
Netincomeattributableto7DaysGroup  35,220   63,609   37,900  6,084    128,886  176,045 28,257
Holdings Limited ordinary shareholders
Interest income                          (2,350)  (1,716)  (800)   (128)    (6,224)  (7,887) (1,266)
Interest expense                         4,627    5,221    2,875   461      7,212    21,459  3,444
Income tax expenses                      2,507    25,011   13,844  2,222    36,259   67,540  10,841
Depreciation and amortization            68,382   83,237   87,429  14,033   246,007  324,126 52,026
EBITDA (non-GAAP)                        108,386  175,362  141,248 22,672   412,140  581,283 93,302
EBITDA%                                  19.9%    25.7%    20.3%   20.3%    20.6%    22.7%   22.7%
Share-based compensation expenses        9,585    7,227    5,187   833      43,483   27,127  4,354
Adjusted EBITDA (non-GAAP) excluding     117,971  182,589  146,435 23,505   455,623  608,410 97,656
share-based compensation expenses
Adjusted EBITDA%                         21.6%    26.7%    21.0%   21.0%    22.7%    23.8%   23.8%





Non-GAAP net income attributable to 7 Days Group Holdings Limited ordinary shareholders


                                                                    Quarter Ended                          Year Ended
                                                                    Dec 31    Sep 30    Dec 31             Dec 31       Dec 31
                                                                    2011      2012      2012               2011         2012
                                                                    RMB'000   RMB'000   RMB'000 US$'000    RMB'000      RMB'000 US$'000
Netincomeattributableto7DaysGroup
Holdings Limited ordinary shareholders                              35,220    63,609    37,900  6,084      128,886      176,045 28,257
(GAAP)
Share-based compensation expenses                                   9,585     7,227     5,187   833        43,483       27,127  4,354
Netincomeattributabletoordinary

shareholdersexcludingshare-based                                  44,805    70,836    43,087  6,917      172,369      203,172 32,611
compensationexpenses(Non-GAAPnet
income)



Earnings per
share
                  Quarter Ended                            Year Ended
                  Dec 31        Sep 30        Dec 31       Dec 31       Dec 31
                  2011          2012          2012         2011         2012
                  RMB           RMB           RMB   USD    RMB          RMB   USD
Basic earnings
per ordinary      0.23          0.43          0.26  0.04   0.86         1.18  0.19
share
(GAAP)
Diluted earnings
per ordinary      0.23          0.43          0.26  0.04   0.85         1.18  0.19
share
(GAAP)


Basic earnings
per ordinary                                                            
share(Non-GAAP),
excluding         0.30          0.48          0.29  0.05   1.15         1.37  0.22
share-based
compensation                                                            
expenses




Diluted earnings
per ordinary                                                            
share(Non-GAAP),
excluding         0.30          0.48          0.29  0.05   1.14         1.36  0.22
share-based
compensation                                                            
expenses


Denominator:
Basic weighted
average number    149,926,081   147,769,286   146,813,397  149,811,784  148,602,762
of
ordinary shares
Diluted weighted
average number    151,023,253   148,164,932   147,384,945  151,473,066  149,145,386
of
ordinary shares



               Quarter Ended                             Year Ended
               31-Dec-11 30-Sep-12  31-Dec-12            31-Dec-11   31-Dec-12
               RMB '000  RMB'000 RMB'000   USD'000    RMB '000    RMB'000     USD'000
Hotel
operating cost
  GAAP Result  (422,878) (517,129)  (560,637) (89,988)   (1,593,260) (2,033,508) (326,400)
  % of Total   77.50%    75.67%     80.55%    80.55%     79.53%      79.52%      79.52%
  net revenue
  Share-based  384       582        313       50         2,551       1,723       277
  Compensation
  % of Total   0.07%     0.09%      0.04%     0.04%      0.13%       0.07%       0.07%
  net revenue
  Non-GAAP     (422,494) (516,547)  (560,324) (89,938)   (1,590,709) (2,031,785) (326,123)
  Result
  % of Total   77.43%    75.59%     80.50%    80.50%     79.40%      79.45%      79.45%
  net revenue
Sales and
marketing
expenses
  GAAP Result  (18,336)  (19,059)   (31,702)  (5,089)    (49,222)    (82,116)    (13,181)
  % of Total   3.36%     2.79%      4.55%     4.55%      2.46%       3.21%       3.21%
  net revenue
  Share-based  627       703        578       93         1,094       2,481       398
  Compensation
  % of Total   0.11%     0.10%      0.08%     0.08%      0.05%       0.10%       0.10%
  net revenue
  Non-GAAP     (17,709)  (18,356)   (31,124)  (4,996)    (48,128)    (79,635)    (12,783)
  Result
  % of Total   3.25%     2.69%      4.47%     4.47%      2.40%       3.11%       3.11%
  net revenue
General and
administrative
expenses
  GAAP Result  (69,542)  (57,596)   (52,555)  (8,436)    (209,786)   (201,271)   (32,306)
  % of Total   12.75%    8.43%      7.55%     7.55%      10.47%      7.87%       7.87%
  net revenue
  Share-based  8,574     5,942      4,296     690        39,838      22,923      3,679
  Compensation
  % of Total   1.57%     0.87%      0.62%     0.62%      1.99%       0.90%       0.90%
  net revenue
  Non-GAAP     (60,968)  (51,654)   (48,259)  (7,746)    (169,948)   (178,348)   (28,627)
  Result
  % of Total   11.17%    7.56%      6.93%     6.93%      8.48%       6.97%       6.97%
  net revenue
Total
operating cost
and expenses
  GAAP Result  (510,756) (593,784)  (644,894) (103,513)  (1,852,268) (2,316,895) (371,887)
  % of Total   93.61%    86.89%     92.65%    92.65%     92.46%      90.60%      90.60%
  net revenue
  Share-based  9,585     7,227      5,187     833        43,483      27,127      4,354
  Compensation
  % of Total   1.76%     1.06%      0.75%     0.75%      2.17%       1.06%       1.06%
  net revenue
  Non-GAAP     (501,171) (586,557)  (639,707) (102,680)  (1,808,785) (2,289,768) (367,533)
  Result
  % of Total   91.85%    85.83%     91.91%    91.91%     90.29%      89.54%      89.54%
  net revenue
Income from
operations
  GAAP Result  34,873    89,614     51,136    8,208      151,110     240,290     38,569
  % of Total   6.39%     13.11%     7.35%     7.35%      7.54%       9.40%       9.40%
  net revenue
  Share-based  9,585     7,227      5,187     833        43,483      27,127      4,354
  Compensation
  % of Total   1.76%     1.06%      0.75%     0.75%      2.17%       1.06%       1.06%
  net revenue
  Non-GAAP     44,458    96,841     56,323    9,041      194,593     267,417     42,923
  Result
  % of Total   8.15%     14.17%     8.09%     8.09%      9.71%       10.46%      10.46%
  net revenue





7 Days Group Holdings Limited Operating Data


                                        As of and for           As of and for

                                        the Quarter Ended       the Year Ended
                                        Dec 31 Sep 30  Dec 31   Dec 31 Dec 31
                                        2011   2012    2012     2011   2012
Hotels in operation                     944    1,236   1,345    944    1,345
Leased-and-operated hotels              411    460     492      411    492
Managed hotels                          533    776     853      533    853
Hotels under conversion                 234    228     223      234    223
Leased-and-operated hotels              32     43      21       32     21
Managed hotels                          202    185     202      202    202
Total hotel rooms for hotels in         94,684 123,080 133,497  94,684 133,497
operation
Leased-and-operated hotels              43,021 48,380  51,725   43,021 51,725
Managed hotels                          51,663 74,700  81,772   51,663 81,772
Total hotel rooms for hotels under      22,485 21,674  20,368   22,485 20,368
conversion
Number of cities covered for hotels in  141    191     208      141    208
operation
Average occupancy rate                  82.8%  85.0%   78.1%    84.6%  81.3%
Leased-and-operated hotels              86.4%  86.1%   79.2%    87.9%  82.9%
Managed hotels                          80.0%  84.3%   77.4%    81.5%  80.3%
Average daily rate (in RMB)             159.6  165.6   161.8    161.0  161.7
Leased-and-operated hotels              165.8  169.5   168.5    166.2  167.0
Managed hotels                          154.3  163.0   157.4    155.8  158.0
RevPAR (in RMB)                         132.2  140.9   126.4    136.2  131.5
Leased-and-operated hotels              143.3  145.9   133.4    146.0  138.3
Managed hotels                          123.5  137.5   121.9    127.0  126.9





SOURCE 7 Days Group Holdings Limited

Website: http://www.7daysinn.com