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

Alibaba (BABA): Thorough Explanation of June Re-Organization

Alibaba IPO/Secondary Listing - The Real IPO Only Begins on the 11th Day Post Listing

ECM Weekly (22 Jun 2019) -  Alibaba, Budweiser Brewing Co, Ascentage, CIMC Vehicle, Impro Precision

Teasing Updates on CaiNiao Network & Ele.me Out of Alibaba's Q3 Results

Alibaba (BABA): For Dec. Quarter, Focus on Profit Improvement, But Not Revenue Growth, 40% Upside

Alibaba (BABA): Weakest Business Line Transfers Risk to Suppliers and Cuts Headcount, 38% Upside

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

IQiyi (IQ): In 4Q18, Baidu’s Growth Engine Lost Control Over Content Cost

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>The revenue growth even accelerated in the first quarter after the Electric Commerce Law, which taxes online individual sellers. We believe BABA's exploration in small towns works.</li>
<li>We believe the operating margin will stop declining in F2020 (ended March 2020), as Youku, BABA’s online TV subsidiary, dismissed employees in March and re-negotiated with content suppliers in April.</li>
<li>The P/E band since IPO suggests upside of 31% and a price target of USD232.</li>
</ul>


The revenue growth even accelerated in the first quarter after the Electric Commerce Law, which taxes online individual sellers. We believe BABA's exploration in small towns works.
We believe the operating margin will stop declining in F2020 (ended March 2020), as Youku, BABA’s online TV subsidiary, dismissed employees in March and re-negotiated with content suppliers in April.
The P/E band since IPO suggests upside of 31% and a price target of USD232.


Alibaba (BABA): Growth Accelerated After New Law Headwind, Cost Control Will Fix Margin, 30% Upside