Increasing occupancy rates helped the company sport a nice earnings surprise, writes MoneyShow's Jim Jubak, also of Jubak's Picks.

Home Inns and Hotels Management (HMIN) announced first-quarter earnings yesterday, May 13, of 4 cents a share (excluding one-time items). That was 9 cents a share better than the 5 cents a share loss projected by Wall Street analysts.

Revenue climbed 11.7% year over year to $225.8 million, well above the $219.2 million consensus. Thus, the quarter continued the turnaround that was visible in the company's fourth-quarter results.

The company saw a slight drop in RevPAR (revenue per available room) to $131 in the quarter, from $132 in the first quarter of 2012. But revenue grew as occupancy rates climbed to 83.6% in the quarter, from 80.7% in the first quarter of 2012.

The big story, though, continues to be the improvement at the Motel 168 chain the company acquired in 2011. For the quarter, RevPAR for Motel 168 improved 4.5% year over year, and the occupancy rate climbed to 76.7% from 70.4%.

In its guidance, the company affirmed its target to open 360 to 380 new hotels in 2013, including 80 to 90 leased-and-operated hotels and 270 to 300 franchised-and-managed hotels. Total revenue in 2013, the company projected, would fall between 6.6 billion and 6.8 billion renminbi. That would be equal to growth of 14.4% to 17.9% for 2013 over 2012.

As of May 13, I'm raising my target price on the New York traded shares of this Chinese hotel company to $37 a share, from my current target of $34. Home Inns and Hotels Management is a member of my Jubak's Picks 12-18 month portfolio.

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund did own shares of Home Inns and Hotels Management as of the end of March. For a full list of the stocks in the fund as of the end of March, see the fund's portfolio here.