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

Tencent Bull Case: Buy the Online Community Empire, Not Just a Game Operator

Tencent Bear Case: The Growth Illusion (Part 1)

Tencent Bear Case: An Over-Played Hand (Part 2)

Tencent: A Brief Statistical Review of Game Approvals

Tencent (700 HK): Dominant Viewpoint Misunderstands Reorganization

Tencent (700 HK): In Fact Benefited from License Suspension

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

Equity Bottom-Up

<ul class="">
<li>The worst business, online game, recovered in 4Q2018, because small competitors died.</li>
<li>The growth rate of game broadcast also bounced up in 4Q2018, as an important competitor Panda TV went bankrupt.</li>
<li>In fact, games are only a small part of Tencent and other businesses have been growing strongly.</li>
<li>The re-organization in October 2018 controlled expenses well.</li>
<li>The 5-year P/E band suggests that Tencent’s stock price has upside of 26%.</li>
</ul>


The worst business, online game, recovered in 4Q2018, because small competitors died.
The growth rate of game broadcast also bounced up in 4Q2018, as an important competitor Panda TV went bankrupt.
In fact, games are only a small part of Tencent and other businesses have been growing strongly.
The re-organization in October 2018 controlled expenses well.
The 5-year P/E band suggests that Tencent’s stock price has upside of 26%.


Tencent (700 HK): The Worst Part Online Game Recovered in Q4 Before Restarting License Approval