Overseas Chinese Equities, Aequitas Research

Ming Lu

A veteran with 19-year experience in equity research.

Geographical coverage:
* Companies operating in China, but listed in Hong Kong and the U.S.
* Previously China A-share (listed in mainland China).

Equity sector coverage:
* Chinese App / Internet-based consumption in China, e.g., Alibaba, Tencent, etc.
* Previously covered education, transportation, telecom, power, bank, advertisement, hotel, etc.

Research methods:
* Generally bottom-up.
* Talk to related people on the ground.  Talk to readers and independent writers for analyzing a news portal.  Talk to parents and teachers for analyzing a tutoring school. 
* Visit stores and show photos as evidence in notes.
* Do technical analysis when finding a short-seller attacking an equity.

Languages:
* English
* Mandarin Chinese (Official language of China)
* Shanghainese (Language of Shanghai, the most developed city in China)
* Cantonese (Language of Hong Kong and Canton Province, one of the most developed provinces in China)

Overseas Chinese Equities

58.com (WUBA): Layoff Can Control Margin, But Cannot Raise Growth, 11% Downside

58.com Sees COVID-19 as Catalyst for Industry Consolidation; Expects Rebound in 2H20

58.com: Offeror No Stranger To Privatisations. And Controversy

58.com (WUBA): Promising Main Business, But But New Businesses Squeezed Margins, Upgrade to HOLD

58.com (WUBA): Weak Membership Growth Suggests More Volatile Performance, 17% Downside

58.com (WUBA): Won Competition, Upgrade to Hold

58.com Inc. (NYSE: WUBA): Regulatory Pressure Has Long Term Implications

Equity Bottom-Up

<ul>
<li>Operating profits increased by 30% YoY in 2Q19 mainly due to the control of marketing expenses.</li>
<li>Membership revenues grew only 1.5% YoY and paying users grew only 2.2% YoY in 2Q19. It is still a problem that letting agencies would not like to sign long-term contracts with 58.com.</li>
<li>Compare to other Chinese internet companies’ P/E, we believe WUBA is still fairly valued. </li>
</ul>


Operating profits increased by 30% YoY in 2Q19 mainly due to the control of marketing expenses.
Membership revenues grew only 1.5% YoY and paying users grew only 2.2% YoY in 2Q19. It is still a problem that letting agencies would not like to sign long-term contracts with 58.com.
Compare to other Chinese internet companies’ P/E, we believe WUBA is still fairly valued. 


58.COM (WUBA): Operating Profits Up 30%, But Membership Stagnant, Still Hold

58.Com Inc Adr

58.COM (WUBA): Operating Profits Up 30%, But Membership Stagnant, Still Hold