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 Consumption Weekly (10 Jun 2024): Tencent, PDD, Meituan, NIO, Tuniu, Smart Share

China Consumption Weekly (17 Jun 2024): BYD, Geely, Zeekr, Zhihu, China Literature, Tencent

China Consumption Weekly (24 Jun 2024): Kuaishou, Bilibili, NetEase, GAC, Honda Motor, Chow Tai Fook

China Consumption Weekly (1 Apr 2024): Tencent, Alibaba, Xiaomi, Midea

Tencent (700 HK): 1Q24 Preview, EPS Up by 40%, But Upside Narrowed by Significant Price Rise

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

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>
<li>The operating margin in 1Q24 reached the highest since 2Q16, as the gross margins of all businesses improved.</li>
<li>The growth rate of online advertising is high than our estimate, but the growth rate of FinTech is lower than our estimate.</li>
<li>We believe there is still an upside of 9% and the price target will be HK$415 for the end of 2024.</li>
</ul>


The operating margin in 1Q24 reached the highest since 2Q16, as the gross margins of all businesses improved.
The growth rate of online advertising is high than our estimate, but the growth rate of FinTech is lower than our estimate.
We believe there is still an upside of 9% and the price target will be HK$415 for the end of 2024.


Tencent (700 HK): 1Q24, Highest Margin in Seven Years