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

Meituan (3690 HK): 2Q21, Initiatives Loss Continued to Swell

Meituan (3690 HK): Employment Game Going On, But Still Significant Risk

Meituan (3690 HK): Forthcoming Punishment Will Benefit Alibaba

Meituan (3690 HK): Q4, “Community Group Purchase” Broke Bottom Line

Meituan (3690 HK): CEO's Poem, as Response to Authorities' Sweat Shop Warning, Could Be Disaster

Gravity Works As WeWork Doesn't; Now Plan B

Bifurcated Chinese Express Market Developing

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

<ul class="">
<li>While the  stock price has been going up after the 1Q21 result, we do not agree with the market response.</li>
<li>The dramatic YoY revenue growth rate was due to the weak comparison base in 1Q20 when the pandemic broke out.</li>
<li>Meituan does not explain the loss in “initiative” business, but we believe this came from community group buying.</li>
<li>We believe Meituan has a downside between 13% ~ 25% for the end of 2022.</li>
</ul>


While the  stock price has been going up after the 1Q21 result, we do not agree with the market response.
The dramatic YoY revenue growth rate was due to the weak comparison base in 1Q20 when the pandemic broke out.
Meituan does not explain the loss in “initiative” business, but we believe this came from community group buying.
We believe Meituan has a downside between 13% ~ 25% for the end of 2022.


Meituan (3690 HK): 1Q21, High Growth from Weak Comparison Base, Loss Due to New Business