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

Byte Dance Lawsuits Show: Tencent (700 HK) Is Small Companies’ Inevitable Platform and Competitor

Tencent (700 HK) – Reform Official Accounts, Will Make Money

China’s Financial Risks/Deleveraging/Technology Race/Housing Crackdown/Trade War/EU Talks/RRR Cut

Tencent (700 HK) – Real Operating Margin Actually Fell

BIDU – Break Down Q1 into Search Engine and IQiyi, Upside At Least 35%

Fat Cash Inflows Yet Traded at 2/3 of Historical P/E Average

Equity Bottom-Up

<ul class=""><li>The stock price has touched and is close to our last target. Upgrade to HOLD.</li><li>All “BAT” have spent significantly on investee companies, but Tencent is in an unsustainable way, e.g. <a href="https://www.smartkarma.com/entities/26983" target="_blank" data-smartkarma-citation="entities:26983:1">HUYA Inc (HUYA US)</a>.</li></ul>

The stock price has touched and is close to our last target. Upgrade to HOLD.All “BAT” have spent significantly on investee companies, but Tencent is in an unsustainable way, e.g. HUYA Inc (HUYA US).

Tencent (700 HK) – Investment Gains Not Sustainable, Reached Our Target, Upgrade to HOLD