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

Last Week on China Internet (14 Oct 2019): Richest Chinese and Forbes Top Digital Companies

Last Week on China Internet (21Oct19): Baidu Saves Paper Cup, Tencent Signed up China's Largest Bank

Last Week on China Internet (28Oct19): PDD’s Higher Cap than JD and Poorer Relation with Tencent

NetEase (NTES): Slow Down? Operating Profits Up 49% YOY! 30% Upside

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>NTES successfully shook off its burden in minor businesses and got cash from these deals, including (1) the IPO of <a href="https://www.smartkarma.com/entities/youdao-inc" target="_blank" rel="noopener" data-smartkarma-citation="entities:28315:1">Youdao (DAO US)</a>, (2) the Financing for NetEase Cloud Music, and (2) the Disposal of Kaola.</li>
<li>NTES’ operating margin improved YoY in 1Q2019 and 2Q2019 as we mentioned before.</li>
<li>Cross-sectional comparisons suggest an upside between 15% and 25%.</li>
</ul>


NTES successfully shook off its burden in minor businesses and got cash from these deals, including (1) the IPO of Youdao (DAO US), (2) the Financing for NetEase Cloud Music, and (2) the Disposal of Kaola.
NTES’ operating margin improved YoY in 1Q2019 and 2Q2019 as we mentioned before.
Cross-sectional comparisons suggest an upside between 15% and 25%.


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

NetEase Inc

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