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

China Internet Weekly (Mar 29): Margin Call Punched Chinese Equities, Alibaba Plans Store on Tencent

Tencent Music (TME): Upgrade to Buy for First Time After Plunge

Baidu: Attractive Short Term Entry Point Following SEC Statement and Block Sales

Kuaishou IPO Trading - Bubbling Now, Spread Out Index Inclusion Might Keep It Going for a Bit

Kuaishou (1024 HK): Short Video Market Expanding, But Express Version Not Profitable

Kuaishou (1024 HK): Expanding Ad Mkt for 2020 and Anime Plan for 2021, but Needs Reasonable Price

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<ul>
<li>The revenue growth rate accelerated further to 53% yoy in 4Q20.</li>
<li>Online market revenue surged by 195% yoy in 4Q20.</li>
<li>We believe total revenue will grow 53% in 2021 versus 50% in 2020.</li>
<li>The gross margin improved significantly to 47% in 4Q20 versus 39% in 4Q19.</li>
<li>We believe the company will make operating profit in 2022.</li>
<li>However, we believe the stock price has a downside of 18% for the end of 2022.</li>
</ul>


The revenue growth rate accelerated further to 53% yoy in 4Q20.
Online market revenue surged by 195% yoy in 4Q20.
We believe total revenue will grow 53% in 2021 versus 50% in 2020.
The gross margin improved significantly to 47% in 4Q20 versus 39% in 4Q19.
We believe the company will make operating profit in 2022.
However, we believe the stock price has a downside of 18% for the end of 2022.


Kuaishou (1024 HK): Q4, Higher Growth , Higher Margin, User Base Closer to TikTok, But Overvalued

Kuaishou Technology

Kuaishou (1024 HK): Q4, Higher Growth , Higher Margin, User Base Closer to TikTok, But Overvalued