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): Three Positive Signals for Margins in 1Q19 Results

New Oriental (EDU): Educator License Not A Concern

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

New Oriental (EDU): Online Subsidiary Koolearn, Significantly Outperforms Peers and Goes Public!

TAL Education (TAL US) - Chaos in Junior High School Application in Shanghai

Maple Leaf (1317) – Private Schools Plunged Due to Proposed Law

Maple Leaf (1317 HK) – Achieves Both Aggressive Expansion and Record High Margin

Equity Bottom-Up

New Oriental Education & Techn / Equity Bottom-Up

<ul class="">
<li>EDU is mainly an English school, so the ahead-of-schedule ban and the cancellation of Mathematical Olympiad tests will not impact EDU.</li>
<li>EDU is a for-profit company, so the VIE ban will not impact EDU.</li>
<li>New learning centers squeezed margins, but we believe these learning centers will be fully utilized in the long run.</li>
<li>P/E Band suggests upside of 34% by the end of 2018.</li>
<li>We are waiting for the 1Q19 result next week.</li>
</ul>


EDU is mainly an English school, so the ahead-of-schedule ban and the cancellation of Mathematical Olympiad tests will not impact EDU.
EDU is a for-profit company, so the VIE ban will not impact EDU.
New learning centers squeezed margins, but we believe these learning centers will be fully utilized in the long run.
P/E Band suggests upside of 34% by the end of 2018.
We are waiting for the 1Q19 result next week.


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