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): Poor Performance Due to Bad Market and Bad Decisions

Autohome (ATHM): Higher Margin in 2Q20 and China Car Market Growing Faster Than Last Year

China Internet Weekly (31Aug2020): Q2 Result of Weak Xiaomi, Overheated BILI, DADA, and BITA

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

Equity Bottom-Up

<ul>
<li>Two used car online platforms, Guazi and Uxin (UXIN), began to sell cars on ATHM’s used car platform. ATHM’s monopolistic position forces competitors to be clients.</li>
<li>We believe ATHM inflated leads revenues and refunded to car dealers as sales and marketing expenses.</li>
<li>Compared to the P/E ratios of other Chinese internet companies (Exhibit 8), we believe the upsides are limited. Hold.</li>
</ul>


Two used car online platforms, Guazi and Uxin (UXIN), began to sell cars on ATHM’s used car platform. ATHM’s monopolistic position forces competitors to be clients.
We believe ATHM inflated leads revenues and refunded to car dealers as sales and marketing expenses.
Compared to the P/E ratios of other Chinese internet companies (Exhibit 8), we believe the upsides are limited. Hold.


Autohome (ATHM): Positive - Competitors Became Clients, Negative - Inflated Leads Revenues, Hold

Autohome Inc (Adr)

Autohome (ATHM): Positive - Competitors Became Clients, Negative - Inflated Leads Revenues, Hold