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

Meituan (3690HK): Restaurant Review App, the Main Profit Source and Its Advantage over Alibaba

Meituan (3690 HK): Rebrands Bike-Sharing in a User Growth War Against Alibaba

Meituan (3690 HK): Broke Even for Second Quarter, Strong Growth, 9%~13% Upside

Meituan Dianping – Dianping Can Only Feed Meituan, Public Offering for Unprofitable Investments

Meituan Dianping: Quantamentals Shine a Ray of Hope on the Treacherous Path to Profitability

Meituan (3690 HK): Gets Caught Stealing Alibaba’s Data in An Anti-Trust Investigation

Last Week in Event SPACE: Toshiba, Meituan/Xiaomi, Harbin Electric, Asia Sat, Jardines, Caesars

Last Week in Event SPACE: Chiyoda, Japan Post, BTS, JDI, Renault/Nissan, Nexon, Metro, Merlin, Melco

Equity Bottom-Up

<ul>
<li>It is encouraging that Meituan Dianping (the Company) broke even in 2Q19 and its operating cash flows turned to positive RMB3.1 billion in 2Q19 versus negative RMB3.3 in 1Q19.</li>
<li>We believe it shows the Company’s market power that the Company raised its rate card in January and restaurant clients did not leave in 2Q19.</li>
<li>We believe the Company has been shrinking its bike-sharing business, which helps improve margins.</li>
<li>Compared with Chinese e-commerce companies’ price/sales ratios, we believe there is an upside of 33% and a price target of HKD93.</li>
</ul>


It is encouraging that Meituan Dianping (the Company) broke even in 2Q19 and its operating cash flows turned to positive RMB3.1 billion in 2Q19 versus negative RMB3.3 in 1Q19.
We believe it shows the Company’s market power that the Company raised its rate card in January and restaurant clients did not leave in 2Q19.
We believe the Company has been shrinking its bike-sharing business, which helps improve margins.
Compared with Chinese e-commerce companies’ price/sales ratios, we believe there is an upside of 33% and a price target of HKD93.


Meituan (3690 HK): Reaping Rewards of Expansion, 33% Upside