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 US): Unloved but Undeterred

China Internet Weekly (8Feb21): TikTok Sued Tencent, Tencent Believed to Be Behind Renren Arrest

Alibaba: A Detailed Look at the SOTP, and What that Tells Us About the Ant Group and Core Commerce

Alibaba (BABA): One More Factor Squeezing Margin in 2Q21 Than Expected

China Internet Weekly (18Jan2021): BABA Delivery Man Tried Suicide, Baidu Produces Electric Vehicle

China Internet Weekly (1Feb2021): Central Bank's Positive Comment on Ant, Xiaomi Got Mkt Share in Q4

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

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

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>E-commerce apps have been taking advertising budgets from other apps.</li>
<li>The online advertising market size expanded by 12.6% in calendar 2020.</li>
<li>New online shoppers stay with e-commerce apps after the pandemic eased.</li>
<li>BABA’s core-commerce operating profit increased by 16% yoy in 3Q21, compared to a yoy decrease in 2Q21.</li>
<li>Minor businesses were no longer significant burdens.</li>
<li>US dollar’s depreciation raised BABA’s value.</li>
<li>The stock price will have an upside of 27% in one year.</li>
</ul>


E-commerce apps have been taking advertising budgets from other apps.
The online advertising market size expanded by 12.6% in calendar 2020.
New online shoppers stay with e-commerce apps after the pandemic eased.
BABA’s core-commerce operating profit increased by 16% yoy in 3Q21, compared to a yoy decrease in 2Q21.
Minor businesses were no longer significant burdens.
US dollar’s depreciation raised BABA’s value.
The stock price will have an upside of 27% in one year.


Alibaba (BABA): Many Positive Signals in December Quarter, 27% Upside