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

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

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

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

Baidu (BIDU): IQiyi (IQ) Caught a Hit TV Series

Baidu (BIDU) – Google Rumor Not a Concern, Healthy 2Q18, and 50%+ Upside

Baidu (BIDU): To Win Battle with Sogou (SOGO) Over Traffic Hijacking After 4 Years

Equity Bottom-Up

* Online ad revenues and the operating margin declined due to FIFA World Cup and government's inspection of all online advertisers' licenses, but we believe the impact of these will moderate soon.
* However, member revenues and the member base grew robustly due to a popular exclusive TV series.
* Compared to peer companies' price/sales ratios, we believe there is upside of 93%.

* Online ad revenues and the operating margin declined due to FIFA World Cup and government's inspection of all online advertisers' licenses, but we believe the impact of these will moderate soon.
* However, member revenues and the member base grew robustly due to a popular exclusive TV series.
* Compared to peer companies' price/sales ratios, we believe there is upside of 93%.

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

iQIYI Inc

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