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

Equity Bottom-Up

Goodbaby International Hldg / Equity Bottom-Up

<ul class="">
<li>The bankrupcy of Toys R Us Inc. negatively impacted the revenue growth in North America.</li>
<li>We believe newly acquired Oasis Dragon Limited did not contribute any operating profits.</li>
<li>Goodbaby issued a large number of new shares to acquire Oasis Dragon andt EPS has been significantly diluted.</li>
<li>The P/E band suggests downside of 5%. Downgrade to HOLD.</li>
</ul>


The bankrupcy of Toys R Us Inc. negatively impacted the revenue growth in North America.
We believe newly acquired Oasis Dragon Limited did not contribute any operating profits.
Goodbaby issued a large number of new shares to acquire Oasis Dragon andt EPS has been significantly diluted.
The P/E band suggests downside of 5%. Downgrade to HOLD.


Goodbaby (1086 HK) – Problems Emerge at Both Top Line and Bottom Line