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

Baidu (BIDU): Stagnant in 4Q18, Wrong Change Feeds a 24% User Increase to Google

Baidu (BIDU): Obituary - Review the Way to First Loss Since IPO

Baidu (BIDU): IQiyi (IQ) Became a Burden, 40% Downside to Book Value

Apple (AAPL): Reduces Prices in Mainland China - Right Action, But Not Enough

Baidu (BIDU): Returning to Hospital Clients Impacted Margin, But Will Bring Growth, 17%~59% Upside

Sell/Avoid Baidu: A Fiduciary Nightmare, Adopting Global Worst Practice

Apple Pain Trade Continues with Key Levels in Focus

Equity Bottom-Up

<ul class="">
<li>Baidu's new methodology directs the large majority of search results to its in-house functions, especially to its blog function BJH (百家号).</li>
<li>Baidu began to hide websites of search results after the change above was widely criticized. However, as a result, users can hardly find authoritative websites.</li>
<li>Because of these changes, it is hard for users to find useful content.</li>
<li>We believe Baidu is giving up its existing advantages for users and clients.</li>
<li>We also believe that users will choose to leave if the platform tries to choose content for them. If users leave Baidu, advertisers will follow them.</li>
</ul>


Baidu's new methodology directs the large majority of search results to its in-house functions, especially to its blog function BJH (百家号).
Baidu began to hide websites of search results after the change above was widely criticized. However, as a result, users can hardly find authoritative websites.
Because of these changes, it is hard for users to find useful content.
We believe Baidu is giving up its existing advantages for users and clients.
We also believe that users will choose to leave if the platform tries to choose content for them. If users leave Baidu, advertisers will follow them.


Baidu (BIDU): The Change Amounts to Business Suicide, Disappointing Existing Users and Clients