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

Weibo (WB): Revenues Slowed Down Significantly in 4Q2018, Failed in Transition

Weibo (WB): Zero Growth in 2Q19, Dead as a Political Forum, 40% Downside

COVID-19 Won't Solve Weibo's Core Problems; Company Guides 1Q20 Revenue 15-20% Lower

Weibo Corporation (WB): Facing Increasingly Competitive Landscape, Downgrade to HOLD

Weibo (WB) – Strong Q2, But Not to Buy Until Short Seller Leaves

Weibo (WB): Short Seller May Follow Moving Averages - A Technical View on 14% Plunge

Equity Bottom-Up

<ul class="">
<li>The stock price did not decline after 3Q18 results were released. This  is very different from the plunges that the shares saw after the 2Q18 and 1Q18 earnings releases.</li>
<li>Revenue growth slowed down due to the headwind of pressure on online game advertisers, but WB continued to accumulate active users.</li>
<li>We believe that the write-down of goodwill and intangibles will help stabilize operating margin.</li>
<li>A cross-sectional comparison with peers’ P/E ratios suggests that even if the market does not recognize any value for  WB's monopolistic position in news dissemination among strangers, then WB is worth its current stock price.</li>
<li>Upgrade to Buy.</li>
</ul>


The stock price did not decline after 3Q18 results were released. This  is very different from the plunges that the shares saw after the 2Q18 and 1Q18 earnings releases.
Revenue growth slowed down due to the headwind of pressure on online game advertisers, but WB continued to accumulate active users.
We believe that the write-down of goodwill and intangibles will help stabilize operating margin.
A cross-sectional comparison with peers’ P/E ratios suggests that even if the market does not recognize any value for  WB's monopolistic position in news dissemination among strangers, then WB is worth its current stock price.
Upgrade to Buy.


Weibo (WB) - Short Seller Has Left, Little Downside and Significant Upside, Upgrade to Buy