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 (19Oct20): Tencent Mgt Reduced Shares, HUYA & DOYU Merged in Our Expected Way

Tencent (700 HK): Illegal Gambling Risk in Merger of Huya and Douyu

TAL Education (TAL): Parents Told Reason for Strong 1Q21, But Stock Price Has Risen Too Much

TAL Inflated Sales Quick Take - Small Rev Contribution, Large Impact

TAL Education (TAL): The Wrongdoing Not 3% But 30%

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 class="">
<li>TAL will release its 2Q21 (by August 2020) result on October 22.</li>
<li>The monthly active user base bounced during the summer vacation, while competitors’ users shrank.</li>
<li>We believe revenue will grow 25% YoY in 2Q21 and 33% in FY2021.</li>
<li>We believe the operating margin in 2Q21 will be flat with 2Q20.</li>
<li>The P/E band suggests that the stock has a downside of 11.8%. Upgrade to hold.</li>
</ul>


TAL will release its 2Q21 (by August 2020) result on October 22.
The monthly active user base bounced during the summer vacation, while competitors’ users shrank.
We believe revenue will grow 25% YoY in 2Q21 and 33% in FY2021.
We believe the operating margin in 2Q21 will be flat with 2Q20.
The P/E band suggests that the stock has a downside of 11.8%. Upgrade to hold.


TAL Education (TAL): App User Base Bounced, While Competitors Shrank in F2Q21, Upgrade to Hold