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

Virscend (1565HK) – Revenues Accelerated & Margin Improved in 2H17

Key Risk to Private Schools: Property Developers Standing Behind

Tianli Education (1773 HK) Grows Dramatically Without Typical Shortages, Upside 22%~43%

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

Schools Come and Go, But Parents Stay Anxious – Promising Education Industry in China

Maple Leaf (1317 HK) – International School, Well Positioned, But Undervalued

Equity Bottom-Up

Summary<ul>
<li>This is an introduction for the coming annual results, as we believe the selective schools are neglected by the market.</li>
<li>Virscend owns 2 high schools among the top-10 in Sichuan Province, China.</li>
<li>The Company has an aggressive expansion in 2017, therefore we believe EPS will grow 30% in 2018 and 2019.</li>
<li>But Virscend has a debt/equity ratio of 80% for raising new campus funds.</li>
<li>We believe the stock price has an upside of 20%.</li>
</ul>Attractive High Schools Virscend is a private school operator in Sichuan…

Summary
This is an introduction for the coming annual results, as we believe the selective schools are neglected by the market.
Virscend owns 2 high schools among the top-10 in Sichuan Province, China.
The Company has an aggressive expansion in 2017, therefore we believe EPS will grow 30% in 2018 and 2019.
But Virscend has a debt/equity ratio of 80% for raising new campus funds.
We believe the stock price has an upside of 20%.
Attractive High Schools Virscend is a private school operator in Sichuan…

Virscend (1565 HK) – Neglected Selective Schools in Southwest China

Virscend Education

Virscend (1565 HK) – Neglected Selective Schools in Southwest China