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

Samsung Smartphone ODM Drive & Trade Approach on Wingtech, Etc.

China Internet Weekly (6Dec2020): Xiaomi’s Best TV Set Seller, TME Acquired 10% of Universal Music

China Internet Weekly (13Jan2020): Police Arrested 20 of Meituan's Employees for Corruption

Early Investors Say "Xiaomi The Money" Post LockUp Expiry

Xiaomi: Growth in IoT and Internet Not Sufficient to Offset Slowdown in Chinese Smartphone Market

Equity Bottom-Up

<ul>
<li>In this note, we will not rate the company.</li>
<li>We believe the smartphone business is weak, but it is not the only main business in Xiaomi.</li>
<li>The smartphone business accounts for 62% of total revenues, but only 36% of total gross profits.</li>
<li>We believe that Appliance and Internet Services are also significant for gross profits and promising for revenue growth.</li>
<li>As Xiaomi’s stock price has declined significantly, we believe Xiaomi is not a good target for short-selling.</li>
</ul>


In this note, we will not rate the company.
We believe the smartphone business is weak, but it is not the only main business in Xiaomi.
The smartphone business accounts for 62% of total revenues, but only 36% of total gross profits.
We believe that Appliance and Internet Services are also significant for gross profits and promising for revenue growth.
As Xiaomi’s stock price has declined significantly, we believe Xiaomi is not a good target for short-selling.


Xiaomi (1810 HK): Smartphone Accounts for Only 36% of Gross Profits

Xiaomi Corp

Xiaomi (1810 HK): Smartphone Accounts for Only 36% of Gross Profits