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

Amazon (AMZN): Has Failed and Will Continue to Fail in China – From a Regular Shopper’s Perspective

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

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

Alibaba (BABA): Freezes Hiring and Minor Businesses to Save Margin, Upgrade to HOLD

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

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

IQiyi (IQ): Temporary Headwind in Ad Revenues, But Robust Membership Revenues in 3Q18

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

* Youku, the online TV subsidiary of BABA, is transforming its risk of loss to content providers.
* Youku is dismissing employees.
* We believe both of Youku’s decisions are positive for cost control and the operating margin will recover in FY2020.
* The P/E band suggests a price target HKD250, which is 38% upside above the market price.

* Youku, the online TV subsidiary of BABA, is transforming its risk of loss to content providers.
* Youku is dismissing employees.
* We believe both of Youku’s decisions are positive for cost control and the operating margin will recover in FY2020.
* The P/E band suggests a price target HKD250, which is 38% upside above the market price.

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