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

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

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

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

NetEase (NTES): Game Business Worth Upside of 28~40% and There Is E-Commerce

China Online Gaming: Structural Shifts Reinforce Tencent and Netease. Tencent Remains Our Top Pick

Equity Bottom-Up

<ul>
<li>We believe investors should focus on margins, but not revenue growth.</li>
<li>We believe EPS will increase by 65% in 2019 and 28% in 2020 due to the potential of the margin improvements.</li>
<li>We also believe there will be an upside of 30% and a price target of USD281 for the year-end 2020, compared to the P/E ratios of the game operators in the US.</li>
</ul>


We believe investors should focus on margins, but not revenue growth.
We believe EPS will increase by 65% in 2019 and 28% in 2020 due to the potential of the margin improvements.
We also believe there will be an upside of 30% and a price target of USD281 for the year-end 2020, compared to the P/E ratios of the game operators in the US.


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

NetEase Inc

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