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

Tencent Music Pre-IPO - This Is How We Do It - A Quick Look at How the Apps Work

Tencent Music Entertainment Group: Part 2 -The Curious Case of Acquiring Ultimate Music Inc.

Tencent Music (TME US) IPO: More Than Meets The (Spotif)Eye

Tencent (700 HK): Tencent Music – Pre-IPO Monopolist

Tencent Music Pre-IPO Review - The Final Countdown - Growth Doesn't Seem to Be Slowing Down

Momo (MOMO): No Man Admits He Is a User, Price Will Double

Tencent Music IPO Preview: A Better Version of Spotify?

Equity Capital Markets

<ul class="">
<li>Spotify-like online music accounts for only 29% of total revenues.</li>
<li>We believe that social entertainment business contributes all gross profits and online music possibly loses money.</li>
<li>Total revenues grew 92% yoy in 1H18 and operating margin improved to 21% in 1H18 versus 9% in 1H17.</li>
<li>Investors need not be disappointed with the performance of the Spotify-like business, as we believe social entertainment will continue to see rising revenues and margins.</li>
</ul>


Spotify-like online music accounts for only 29% of total revenues.
We believe that social entertainment business contributes all gross profits and online music possibly loses money.
Total revenues grew 92% yoy in 1H18 and operating margin improved to 21% in 1H18 versus 9% in 1H17.
Investors need not be disappointed with the performance of the Spotify-like business, as we believe social entertainment will continue to see rising revenues and margins.


テンセント・ミュージック（TME）：Spotifyのようなシェアはわずか29％だが、他の事業は利益を生み出している