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

Alibaba (BABA): SEC Chair’s Warning Against Chinese Equities

China Internet Weekly (4May2020): BABA President Punished, Chinese Securities Authority on LK

Weekly (11May2020): Labor Day Online Sales up 36%, BABA & PDD on U.S. Blacklist

China Internet Weekly (20Apr2020):  BABA Moved Meituan’s Sharing Bikes to Remote Locations

China Internet Weekly (6Apr2020): JD Founder Resigned, LK Cooked Book, BIDU & PDD's Odd Financing

China Internet Weekly (13Apr2020): Tencent, BILI, Xiaomi, TCOM, IQ, TAL

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<p style="text-align: justify;">We believe cash balance may not tell the truth, but companies’ moves will.</p>
<ul>
<li>Alibaba (BABA) plans to invest in computing infrastructure – fat cash.</li>
<li>Pinduoduo (PDD) will purchase Gome (493 HK) – fat cash.</li>
<li>Baidu (BIDU)’s internal audit – short of cash.</li>
<li>Xiaomi issues 10-year notes – short of cash.</li>
<li>51job.com (JOBS) lays off employees in eleven branch offices – short of cash.</li>
</ul>

We believe cash balance may not tell the truth, but companies’ moves will.

Alibaba (BABA) plans to invest in computing infrastructure – fat cash.
Pinduoduo (PDD) will purchase Gome (493 HK) – fat cash.
Baidu (BIDU)’s internal audit – short of cash.
Xiaomi issues 10-year notes – short of cash.
51job.com (JOBS) lays off employees in eleven branch offices – short of cash.


China Internet Weekly (27Apr2020): BABA, PDD, BIDU, Xiaomi, JOBS, Most Moves Are About Cash