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): Won Competition, Upgrade to Hold

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

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

58.com (WUBA): Top Risk - Clients Cheat Users, 18% Downside

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

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

Equity Bottom-Up

* We believe that the stagnancy in membership was due to the new competitor Ke.com and will make total revenues more volatile in the future.
* We assume total revenues will slow down, but the operating margin will be stable in 2019.
* We compare WUBA’s expected P/E for 2019 with other vertical platforms in China and conclude 17% downside.

* We believe that the stagnancy in membership was due to the new competitor Ke.com and will make total revenues more volatile in the future.
* We assume total revenues will slow down, but the operating margin will be stable in 2019.
* We compare WUBA’s expected P/E for 2019 with other vertical platforms in China and conclude 17% downside.

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

58.Com Inc Adr

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