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

58.COM (WUBA): Operating Profits Up 30%, But Membership Stagnant, Still Hold

58.com (WUBA): Layoff Can Control Margin, But Cannot Raise Growth, 11% Downside

58.com Sees COVID-19 as Catalyst for Industry Consolidation; Expects Rebound in 2H20

58.com (WUBA): Top Risk - Clients Cheat Users, 18% Downside

58.com (WUBA): Promising Main Business, But But New Businesses Squeezed Margins, Upgrade to HOLD

58.com (WUBA): Weak Membership Growth Suggests More Volatile Performance, 17% Downside

58.com Inc. (NYSE: WUBA): Regulatory Pressure Has Long Term Implications

Equity Bottom-Up

<ul>
<li>The stock price has declined 23% since we downgraded WUBA to “sell”. We upgrade WUBA to HOLD.</li>
<li>WUBA has been taking active users from Ke, which is an app of Lianjia, WUBA’s most important competitor.</li>
<li>In April, WUBA accused Lianjia’s app, Ke, of plagiarizing apartment photos, which is a crushing blow to Lianjia’s image of “real apartment source”.</li>
</ul>


The stock price has declined 23% since we downgraded WUBA to “sell”. We upgrade WUBA to HOLD.
WUBA has been taking active users from Ke, which is an app of Lianjia, WUBA’s most important competitor.
In April, WUBA accused Lianjia’s app, Ke, of plagiarizing apartment photos, which is a crushing blow to Lianjia’s image of “real apartment source”.


58.com (WUBA): Won Competition, Upgrade to Hold

58.Com Inc Adr

58.com (WUBA): Won Competition, Upgrade to Hold