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

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

Luckin Coffee's Upsized IPO: Why Investors Trod Where Analysts Feared?

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

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

Starbucks Faces a Bigger Challenge in China than Luckin

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/28046" target="_blank" data-smartkarma-citation="entities:28046:1">Luckin Coffee (LK US)</a> reaped Starbucks’ growth strategy in China in 2018; however, after reading Luckin’s IPO files, we believe Luckin will not be a threat to Starbucks China after two years.</li>
<li>We believe Luckin’s cash balance after IPO will be used up in 3 years as maximum at current speed.</li>
<li>We believe Luckin will accelerate its usage of cash with the IPO funds.</li>
<li>We also believe it is hard for Luckin to control its costs or raise its product prices.</li>
</ul>



Luckin Coffee (LK US) reaped Starbucks’ growth strategy in China in 2018; however, after reading Luckin’s IPO files, we believe Luckin will not be a threat to Starbucks China after two years.
We believe Luckin’s cash balance after IPO will be used up in 3 years as maximum at current speed.
We believe Luckin will accelerate its usage of cash with the IPO funds.
We also believe it is hard for Luckin to control its costs or raise its product prices.


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

Starbucks Corp

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