Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<ul class="">
<li>China housing Sales data has recovered strongly since May. Housing sales area grew by 2 digits yoy in October and November.</li>
<li>KE’s revenue increased by 71% yoy in 3Q20. We are not concerned about the pre-IPO margin decline.</li>
<li>We believe the stock has an upside of 14%~22 for the end of 2021.</li>
</ul>


China housing Sales data has recovered strongly since May. Housing sales area grew by 2 digits yoy in October and November.
KE’s revenue increased by 71% yoy in 3Q20. We are not concerned about the pre-IPO margin decline.
We believe the stock has an upside of 14%~22 for the end of 2021.


KE (BEKE): Riding on Housing Surge in China

Alibaba Group Holding  / Equity Bottom-Up

<ul class="">
<li>Alibaba (BABA) is selling BigBasket.com to Tata Group.</li>
<li>It is rumored that Alibaba (BABA) will dismiss the Xiami Music team.</li>
<li>Xiaomi (1810 HK) issued 1 billion shares at the price of HK$23.70.</li>
<li>Trip.com (TCOM)’s revenue decreased by 48% yoy in 3Q20.</li>
</ul>


Alibaba (BABA) is selling BigBasket.com to Tata Group.
It is rumored that Alibaba (BABA) will dismiss the Xiami Music team.
Xiaomi (1810 HK) issued 1 billion shares at the price of HK$23.70.
Trip.com (TCOM)’s revenue decreased by 48% yoy in 3Q20.


China Internet Weekly (7Dec2020): Alibaba Withdrawing from India and Domestic Music Market

<ul>
<li>Alibaba (BABA) launched a platform of real estate agency.</li>
<li>Alibaba (BABA) promoted its interactive entertainment unit to first-level department because of a popular game.</li>
<li>We do not believe BABA’s acquisition of an online job agency is rational or true.</li>
</ul>


Alibaba (BABA) launched a platform of real estate agency.
Alibaba (BABA) promoted its interactive entertainment unit to first-level department because of a popular game.
We do not believe BABA’s acquisition of an online job agency is rational or true.


China Internet Weekly (21Sep2020): BABA Launched Property Agency and Promoted Game Department

<ul class="">
<li>Alibaba (BABA)’s subsidiary, Ant Group, is profitable.</li>
<li>Xiaomi had weak revenue and weaker profit in 2Q20.</li>
<li>Tencent Music plans to issue notes.</li>
<li>Bilibili (BILI) grew strongly, but it also had a big loss. Overvalued.</li>
</ul>


Alibaba (BABA)’s subsidiary, Ant Group, is profitable.
Xiaomi had weak revenue and weaker profit in 2Q20.
Tencent Music plans to issue notes.
Bilibili (BILI) grew strongly, but it also had a big loss. Overvalued.


China Internet Weekly (31Aug2020): Q2 Result of Weak Xiaomi, Overheated BILI, DADA, and BITA

<ul>
<li>ATHM’s operating margin improved to 29% in 2Q20 versus 25% in 2Q19.</li>
<li>The car sales volume in China declined YoY before the pandemic, but turned positive in recent four months.</li>
<li>The YoY growth rate of passenger cars in China in July 2020 reached record high since May 2018.</li>
<li>We set an upside of 28% (Exhibit 9) and a price target of US$111.</li>
<li>The ‘ceiling’ of US$90 can be a concern, but can also be an opportunity.</li>
</ul>


ATHM’s operating margin improved to 29% in 2Q20 versus 25% in 2Q19.
The car sales volume in China declined YoY before the pandemic, but turned positive in recent four months.
The YoY growth rate of passenger cars in China in July 2020 reached record high since May 2018.
We set an upside of 28% (Exhibit 9) and a price target of US$111.
The ‘ceiling’ of US$90 can be a concern, but can also be an opportunity.


Autohome (ATHM): Higher Margin in 2Q20 and China Car Market Growing Faster Than Last Year

China

Autohome Inc is an online destination for automobile consumers in China.  The Company delivers comprehensive, independent and interactive content to automobile buyers and owners.

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Autohome Inc (Adr) (ATHM US)

KE (BEKE): Riding on Housing Surge in China

China housing Sales data has recovered strongly since May. We are not concerned about KE's pre-IPO margin decline. We believe the stock has an...

Ming Lu

China Internet Weekly (7Dec2020): Alibaba Withdrawing from India and Domestic Music Market

Alibaba (BABA) are selling BigBasket.com to Tata Group in India and will dismiss Xiami Music in China. Xiaomi will issue new shares.

Ming Lu

China Internet Weekly (21Sep2020): BABA Launched Property Agency and Promoted Game Department

Alibaba (BABA) launched a platform of real estate agency. Alibaba (BABA) promoted its interactive entertainment unit to first-level department...

Ming Lu

China Internet Weekly (31Aug2020): Q2 Result of Weak Xiaomi, Overheated BILI, DADA, and BITA

Alibaba (BABA)’s subsidiary, Ant Group, is profitable. Xiaomi had weak revenue and weaker profit in 2Q20. Tencent Music plans to issue...

Ming Lu

Autohome (ATHM): Higher Margin in 2Q20 and China Car Market Growing Faster Than Last Year

ATHM’s operating margin improved to 29% in 2Q20 versus 25% in 2Q19. The car sales volume in China declined YoY before the pandemic, but turned...

Ming Lu

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