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 (2Dec19): Our Interpretation of AMZN’s Store on PDD

China Internet Weekly (9Dec19): AliPay Crashed, 327 Companies Bankrupt in 2019 Vs. 2145 in 2017

China Internet Weekly (16Dec19): Tencent Broke Through Resistance Line

NetEase (NTES): Shaking Off Burdens in Minor Businesses and Got Cash - Smart Moves

NetEase (NTES): Sold Import E-Commerce to Alibaba (BABA), Win-Win Deal

Youdao, Inc (有道) Pre-IPO - Weak Conversion Rate Is a Worry

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>NetEase fired a diseased employee without paying the severance compensation according to the Labor Law.</li>
<li>We believe the unwise decision was due to the high pressure of cost control.</li>
<li>NetEase has been selling minor businesses one by one this year.</li>
<li>The main business, online game, is also stagnant.</li>
<li>According to other game operators’ EV/revenues, we believe the upside is merely 4%.</li>
</ul>
<p style="text-align: justify;">Our previous coverage on NetEase:</p>
<ul>
<li><a href="https://www.smartkarma.com/insights/netease-ntes-shaking-off-burdens-in-minor-businesses-including-ipo-of-youdao-smart-moves" target="_blank" rel="noopener">NetEase (NTES): Shaking Off Burdens in Minor Businesses and Got Cash</a></li>
<li><a href="https://www.smartkarma.com/insights/netease-ntes-sold-import-e-commerce-to-alibaba-baba-win-win-deal" target="_blank" rel="noopener">NetEase (NTES): Sold Import E-Commerce to Alibaba (BABA)</a></li>
</ul>


NetEase fired a diseased employee without paying the severance compensation according to the Labor Law.
We believe the unwise decision was due to the high pressure of cost control.
NetEase has been selling minor businesses one by one this year.
The main business, online game, is also stagnant.
According to other game operators’ EV/revenues, we believe the upside is merely 4%.

Our previous coverage on NetEase:

NetEase (NTES): Shaking Off Burdens in Minor Businesses and Got Cash
NetEase (NTES): Sold Import E-Commerce to Alibaba (BABA)


NetEase (NTES): Cost Pressure Behind Scandal of Employee Dismissal, Downgrade to Hold

NetEase Inc

NetEase (NTES): Cost Pressure Behind Scandal of Employee Dismissal, Downgrade to Hold