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

TAL Education (TAL) – Short Seller Muddy Waters, Not a Hero, But a Free Rider

Inflation Ticking Up Globally - Some Major EMs Are Oversold

Trump’s Trade War Approach Plays to China’s Strengths

TAL Education (TAL US) - Chaos in Junior High School Application in Shanghai

TAL Education: Policy Headwind and Restructuring Risks

Equity Bottom-Up

Summary<ul>
<li>Management’s revenue expectation for 1Q19 (as of May 2018) suggests a QOQ decline over weak season.</li>
<li>TAL hired CEO of Coursera, a large US-headquartered online course provider, in April.</li>
<li>TAL launched VIPX, an online 1-on-1 English program in April.</li>
<li>TAL started “to B” to sell programs to outside schools.</li>
<li>The Company aggressively tried new businesses, but we are still conservative about the revenue growth in 2019.</li>
</ul> QOQ Decline over Weak Season<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/050/750/original/Pic%201.PNG?1524742029" class="editor-image img-responsive" data-smartkarma-image-id="50750"></figure>Management expects that 1Q19 (as of May 2018) revenues…

Summary
Management’s revenue expectation for 1Q19 (as of May 2018) suggests a QOQ decline over weak season.
TAL hired CEO of Coursera, a large US-headquartered online course provider, in April.
TAL launched VIPX, an online 1-on-1 English program in April.
TAL started “to B” to sell programs to outside schools.
The Company aggressively tried new businesses, but we are still conservative about the revenue growth in 2019.
 QOQ Decline over Weak SeasonManagement expects that 1Q19 (as of May 2018) revenues…

TAL Education (TAL) – Mgt. Expects QOQ Decline for Q1, First Time in 5 Years