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

JD.com (JD): Lawsuit Over, Price Falling Back to First Trading Day, Defensive in Bear Market

JD.com (JD): The Real Main Business Grew 46% YoY, and Not 20% YoY in 4Q2018

JD.com (JD): Cancels Delivery Man’s Basic Salary, Adapts to Growth of Commission Business

JD.com (JD): Time to Accumulate - Answers to Typical “Buts”

JD.com Bull Base and Strategic Opportunity

JD.com (JD): In Wrong Way Market Judges Financials

Equity Bottom-Up

* The "services" business is actually the main business by both GMV (Gross Merchandise Value) and commissions, but accounts for only 10% of total revenues.
* The "direct sales" business is in fact smaller than services in both GMV and gross profits, but accounts for 90% of total revenues.
* Total GMV grew 31% YoY in 3Q18 versus 30% YoY in 2Q18 and 1Q18, but the minor business, direct sales, pulled down the total revenue growth.
* In the real main business, the growth rate of GMV accelerated and the commission rates in 2018 are higher than 2017.
* We believe there is a significant upside based on historical "Price / GMV per share".

* The "services" business is actually the main business by both GMV (Gross Merchandise Value) and commissions, but accounts for only 10% of total revenues.
* The "direct sales" business is in fact smaller than services in both GMV and gross profits, but accounts for 90% of total revenues.
* Total GMV grew 31% YoY in 3Q18 versus 30% YoY in 2Q18 and 1Q18, but the minor business, direct sales, pulled down the total revenue growth.
* In the real main business, the growth rate of GMV accelerated and the commission rates in 2018 are higher than 2017.
* We believe there is a significant upside based on historical "Price / GMV per share".

JD.com (JD): 3Q18 Not Slowing Down, As Two Parts of Revenues Not Comparable!

JD.com Inc (ADR)

JD.com (JD): 3Q18 Not Slowing Down, As Two Parts of Revenues Not Comparable!