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

New Oriental (EDU): Do Not Fear Q2 Record Losses, 27% Upside

TAL Education (TAL): Online Courses Improved Margin in 3Q19, Parents Returning, 44% Upside

Koolearn: Marketing Expenses Have Taken Operating Profits Down the Drain

EDU & TAL：August Quarter: A Big Gamble and a Small Gamble

New Oriental (EDU): Laws Harm Private Schools? Not This One

New Oriental (EDU): Three Positive Signals for Margins in 1Q19 Results

Equity Bottom-Up

New Oriental Education & Techn / Equity Bottom-Up

<ul class="">
<li>The Education Ministry of China promulgated <em>Burden Relief Measures for Students in Primary and Secondary Schools</em> (中小学生减负措施).</li>
<li>The market is concerned about “Article 15” on the educator license.</li>
<li>We note that a large number of teachers in part-time schools took the educator exam in November 2018.</li>
<li>We expect that the incremental passers of the educator exam will be many more than the number of EDU’s vacancies, and that most of the passers will prefer to work for giants such as EDU or TAL (TAL) as opposed to other part-time schools.</li>
</ul>


The Education Ministry of China promulgated Burden Relief Measures for Students in Primary and Secondary Schools (中小学生减负措施).
The market is concerned about “Article 15” on the educator license.
We note that a large number of teachers in part-time schools took the educator exam in November 2018.
We expect that the incremental passers of the educator exam will be many more than the number of EDU’s vacancies, and that most of the passers will prefer to work for giants such as EDU or TAL (TAL) as opposed to other part-time schools.


New Oriental (EDU): Educator License Not A Concern