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

TAL Education (TAL): Parents Told Reason for Strong 1Q21, But Stock Price Has Risen Too Much

TAL Education (TAL): App User Base Bounced, While Competitors Shrank in F2Q21, Upgrade to Hold

China Internet Weekly (19Oct20): Tencent Mgt Reduced Shares, HUYA & DOYU Merged in Our Expected Way

TAL Education (TAL): Revenue Warning, Advantage of Extended Vacation Disappeared for Four Reasons

TAL Inflated Sales Quick Take - Small Rev Contribution, Large Impact

Luckin Coffee (瑞幸咖啡) Update - Potential Placement from Pledged Shares

What Might Have Happened at Luckin Coffee (瑞幸咖啡) + Trade Ideas and Implication for Other ADRs

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>TAL reduced 2020 revenues by 2.6% to eliminate inflated “light class” courses. However, after the revision, operating profits shrank by 29%.</li>
<li>TAL shifted classroom students to online courses after the ban of part-time physical school, but did not provide material discounts. This will not happen in the following quarters.</li>
</ul>
<p>Our previous coverage on TAL Education:</p>
<ul>
<li><a href="https://www.smartkarma.com/insights/tal-education-tal-revenue-warning-advantage-of-extended-vacation-disappeared-for-four-reasons" target="_blank" rel="noopener">TAL Education (TAL): Revenue Warning, Advantage of Extended Vacation Disappeared for Four Reasons</a></li>
<li><a href="https://www.smartkarma.com/insights/tal-inflated-sales-quick-take-small-rev-contribution-large-impact" target="_blank" rel="noopener">TAL Inflated Sales Quick Take - Small Rev Contribution, Large Impact</a></li>
</ul>


TAL reduced 2020 revenues by 2.6% to eliminate inflated “light class” courses. However, after the revision, operating profits shrank by 29%.
TAL shifted classroom students to online courses after the ban of part-time physical school, but did not provide material discounts. This will not happen in the following quarters.

Our previous coverage on TAL Education:

TAL Education (TAL): Revenue Warning, Advantage of Extended Vacation Disappeared for Four Reasons
TAL Inflated Sales Quick Take - Small Rev Contribution, Large Impact


TAL Education (TAL): The Wrongdoing Not 3% But 30%