China Lodging Group, Ltd. (ADR) (NASDAQ:HTHT) is changing its name to Huazhu Hotels Group Ltd, though that hasn’t hit the U.S. exchanges yet.
But what you call this high-end hotel operator isn’t that important. The numbers speak louder than the name to investors: HTHT stock is up 35% year to date and up 151% in the past 12 months.
Yes, there’s no doubt growth has slowed down from its breakneck pace in 2017, but if it doubles its current performance in the second half of the year, a 70% return isn’t too shabby.
Hot HTHT Stock Stacks Up
HTHT currently operates 2,000 hotels in 300 cities in China. It generally operates high-end signature hotels, boutique properties and travel-oriented hotels. Just for perspective, Hilton Hotels Corporation (NYSE:HLT) has more than 4,000 properties under all its badges and Marriott International Inc (NASDAQ:MAR) has more than 5,700 hotels.
And both those U.S.-based chains operate on six continents. MAR is in 110 countries.
So, it’s pretty impressive HTHT is the size it is without ever leaving China. What’s more, it is still growing a good clip domestically. And the company is less than 15 years old.
HTHT represents the larger goals of the Chinese government. It wants to encourage Chinese companies to build out resources for Chinese demand. It isn’t interested in letting the big foreign brands in to dominate the market.
Of course, there are certainly Western brands already operating in China and they will continue to be there. But the goal is to build a self-reliant economy by building local businesses that are focused on serving local consumers.
You can see this in ecommerce, social media, financial institutions, biotech, etc. Having come from a predominantly agrarian economy to a post-industrial economy in slightly more than a generation is a huge move for a country with a population of 1.4 billion.
But Chinese leaders know that if they can start to move all these people up the economic ladder and build businesses that are focused on supporting that internal growth, they will have a very powerful economy for decades to come. And that means, when the U.S. or the West sneezes, China will no longer catch pneumonia, as the old saying goes.
The demographics speak for themselves. The United Nations has put China at the top of the travel tourism market since 2012, and Chinese tourist spent $216 billion on tourism in 2016, 21% of the world’s international tourism spending. And domestic tourism is up almost fivefold in the past eight years.
According to the Chinese National Tourism Administration, 75% of the Chinese population should be heading toward the middle class by 2022. That is a huge domestic growth engine.
Then combine that with the fact that the CNTA is expecting 150 million visits from outsiders this year alone, and you have some serious opportunity in this sector. Right now the stock has slowed, likely because of the trade war saber rattling. Use it as a good chance to get into this stock.
Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters