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

Autohome (ATHM): Commission Conflict with Dealers, as Auto Industry Suffers First Decline Since 1990

Autohome (ATHM): Promising Auto Loan, Waiting for Buying Opportunity

Autohome (ATHM): Surged After We Upgraded to Hold, Now Overvalued

Autohome (ATHM) - Cash Goes to Controlling Shareholder

Equity Bottom-Up

* "Other income" contribution to operating profits in 3Q18 was higher than that of 3Q17, without which the operating margin declined significantly.
* Revenue growth rates in both main businesses slowed down.
* However, we believe ATHM has been fully discounted as (1) the stock price has declined 20% since we posted our risk note and (2) there is only 4% downside comparing with other Chinese internet platforms’ P/E ratios.

* "Other income" contribution to operating profits in 3Q18 was higher than that of 3Q17, without which the operating margin declined significantly.
* Revenue growth rates in both main businesses slowed down.
* However, we believe ATHM has been fully discounted as (1) the stock price has declined 20% since we posted our risk note and (2) there is only 4% downside comparing with other Chinese internet platforms’ P/E ratios.

Autohome (ATHM): Lower Margin in 3Q18, But Fully Impacted Since Our Previous Risk Note

Autohome Inc (Adr)

Autohome (ATHM): Lower Margin in 3Q18, But Fully Impacted Since Our Previous Risk Note