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

Starbucks (SBUX): Luckin (LK) Not a Concern Anymore According to Its IPO Form

Luckin Coffee: Looking at the Good, the Bad, the Unsure, and the Future

Luckin Coffee IPO: Best Latte Scenario Priced In Unless You See Data Coffee

5 Key Takeaways from Starbucks' Rise to Digital Stardom

Starbucks Faces a Bigger Challenge in China than Luckin

Starbucks (SBUX): Castles Made of Stimulants (Capitalism's Less Explored Darkside)

YUMC: K Pro Rejuvenates Franchise Image and Crawfish Pizza Intrigues Pizza Hut Consumers

Equity Bottom-Up

<ul class="">
<li>We believe Luckin copies SBUX’s site selection, but chooses low rental places close to Starbucks shops.</li>
<li>Starbucks plans to add delivery business to raise margins and comparable store sales, but Luckin has focused on delivery since inception.</li>
<li>Starbucks needs the China market as its growth momentum, but we believe Luckin’s parasitical tactic will be a major resistance.</li>
</ul>


We believe Luckin copies SBUX’s site selection, but chooses low rental places close to Starbucks shops.
Starbucks plans to add delivery business to raise margins and comparable store sales, but Luckin has focused on delivery since inception.
Starbucks needs the China market as its growth momentum, but we believe Luckin’s parasitical tactic will be a major resistance.


Starbucks (SBUX): China Strategy Reaped by Luckin’s Parasitical Tactic, a Visit and Case Study

Starbucks Corp

Starbucks (SBUX): China Strategy Reaped by Luckin’s Parasitical Tactic, a Visit and Case Study