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 Dianping (3690 HK): 1H18 Results Worse Than Our Last Viewpoint

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

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

Meituan Dianping IPO Preview: The China O2O Powerhouse

Equity Bottom-Up

<ul class="">
<li>The brand and platform, Dianping (大众点评), dominates the restaurant comment market in China.</li>
<li>We believe Dianping is the only profitable business line in Meituan Dianping (the Company).</li>
<li>Meituan (美团) is the largest online platform for fast food delivery, but it has a thin gross margin of 8%.</li>
<li>We believe Meituan suffers net losses, despite the fact that Meituan’s revenues are twice of Dianping.</li>
<li>We are concerned that the Company is abusing cash in unprofitable businesses, such as the investments in car hailing and bike-sharing.</li>
</ul>


The brand and platform, Dianping (大众点评), dominates the restaurant comment market in China.
We believe Dianping is the only profitable business line in Meituan Dianping (the Company).
Meituan (美团) is the largest online platform for fast food delivery, but it has a thin gross margin of 8%.
We believe Meituan suffers net losses, despite the fact that Meituan’s revenues are twice of Dianping.
We are concerned that the Company is abusing cash in unprofitable businesses, such as the investments in car hailing and bike-sharing.


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