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

Kanzhun (2076 HK): A Monitor of Job Market in China

Starbucks (SBUX): Another Monitor of China Consumption

PDD (PDD US): 3Q23, Grew Dramatically Overseas, Still Upside After Reaching Our Last Target

Pinduoduo (PDD): 1Q23, Up by 58% YoY, 40% Upside

Gravity Works As WeWork Doesn't; Now Plan B

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>
<li>PDD’s revenue increased by 66% YoY to RMB52 bn, significantly higher than the market consensus RMB43 bn.</li>
<li>The operating margin declined to 24% in 2Q23 from 28% in 2Q22 due to aggressive expansion outside China.</li>
<li>We believe the stock still has an upside of 47% for year end 2023. Buy.</li>
</ul>


PDD’s revenue increased by 66% YoY to RMB52 bn, significantly higher than the market consensus RMB43 bn.
The operating margin declined to 24% in 2Q23 from 28% in 2Q22 due to aggressive expansion outside China.
We believe the stock still has an upside of 47% for year end 2023. Buy.


Pinduoduo (PDD): 2Q23, Revenue Significantly Higher Than Consensus, Buy

PDD Holdings

Pinduoduo (PDD): 2Q23, Revenue Significantly Higher Than Consensus, Buy