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): Weak 2Q19 as Expected, But Do Not Short It

TAL Education (TAL): Online Courses Improved Margin in 3Q19, Parents Returning, 44% Upside

TAL Education (TAL): Margin Reached 5-Year High, Too Late to Buy, Downgrade to Hold

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

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

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

TAL Education: Policy Headwind and Restructuring Risks

Equity Bottom-Up

Conclusion First
Free riders, such as short sellers and law firms, are acting heroes by attacking TAL which is negatively impacted by the policy of pupil burden relief.  However, we believe TAL’s stock price has been fully impacted.
History
By January 2018, the Chinese education bureaus forbade all the math exams for high school entrance.  TAL is the most prominent of tutoring schools for these exams. (See <a href="https://www.smartkarma.com/insights/tal-education-tal-us-chaos-in-junior-high-school-application-in-shanghai" target="_blank" data-smartkarma-citation="insights:17836">TAL Education (TAL US) - Chaos in Junior High School Application in Shanghai</a> on Feb 27) As…

Conclusion First
Free riders, such as short sellers and law firms, are acting heroes by attacking TAL which is negatively impacted by the policy of pupil burden relief.  However, we believe TAL’s stock price has been fully impacted.
History
By January 2018, the Chinese education bureaus forbade all the math exams for high school entrance.  TAL is the most prominent of tutoring schools for these exams. (See TAL Education (TAL US) - Chaos in Junior High School Application in Shanghai on Feb 27) As…

TAL - Fully Impacted by Policy Despite Free Riders Launch Class Action – Upgrade to HOLD