Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<ul>
<li>“Common prosperity “ to replace GDP growth as development target. Development of the private economy to be guided by the government.</li>
<li>Localization &amp; substitution with Chinese software, hardware, chips, semiconductor &amp; consumer companies, promote manufacturing along with autonomous control and real economy. Focus on domestic demand rather than being world factory.</li>
<li>Energy independence through new energy facility, VPP, EV to increase, along with Chinese medicine and other Chinese consumer brands. A possible move to fortify Chinese economy against potential Western sanctions.</li>
</ul>


“Common prosperity “ to replace GDP growth as development target. Development of the private economy to be guided by the government.
Localization &amp; substitution with Chinese software, hardware, chips, semiconductor &amp; consumer companies, promote manufacturing along with autonomous control and real economy. Focus on domestic demand rather than being world factory.
Energy independence through new energy facility, VPP, EV to increase, along with Chinese medicine and other Chinese consumer brands. A possible move to fortify Chinese economy against potential Western sanctions.


Après Moi Le Deluge: What 20th CPC National Congress Says About China's Future

<ul>
<li>The EU traditionally imported a large number of intermediate goods from China, however, as EU economies slow down, the slowing consumer demand will also reduce the demand for intermediate goods.</li>
<li>EU's manufacturers traditionally focus on high end, high margin products while China provides daily consumer products, the substitution effect is limited.</li>
<li>China does have advantages in products such as textile, metallurgy and office communication supplies, the business case is subject to prevailing geopolitical factors.</li>
</ul>


The EU traditionally imported a large number of intermediate goods from China, however, as EU economies slow down, the slowing consumer demand will also reduce the demand for intermediate goods.
EU's manufacturers traditionally focus on high end, high margin products while China provides daily consumer products, the substitution effect is limited.
China does have advantages in products such as textile, metallurgy and office communication supplies, the business case is subject to prevailing geopolitical factors.


<ul>
<li>In modern warfare, UAVs have unbeatable advantages: zero casualties, low overall cost, strong maneuverability, strong adaptability to the environment, with a higher proportion of payload,  and will be widely used.  </li>
<li>Military UAV growth mainly depends on the defense spending. Israel, the United States, and China dominate the military UAV trade market.</li>
<li>Top listed Chinese producers ranked by UAV revenue (in RMB) in 2021: <a href="https://www.smartkarma.com/entities/avic-chengdu-uas-co-ltd" target="_blank" data-smartkarma-citation="entities:36280:1" rel="noopener">China AVIC (688297 CH)</a> (2.48bn); <a href="https://www.smartkarma.com/entities/zhejiang-nanyang-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:16813:1" rel="noopener">Zhejiang Nanyang Technology Co,Ltd. (002389 CH)</a> (1.12bn); <a href="https://www.smartkarma.com/entities/china-aerospace-times-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:3330:1" rel="noopener">China Aerospace Times Electronics (600879 CH)</a> (780mn).</li>
</ul>


In modern warfare, UAVs have unbeatable advantages: zero casualties, low overall cost, strong maneuverability, strong adaptability to the environment, with a higher proportion of payload,  and will be widely used.  
Military UAV growth mainly depends on the defense spending. Israel, the United States, and China dominate the military UAV trade market.
Top listed Chinese producers ranked by UAV revenue (in RMB) in 2021: China AVIC (688297 CH) (2.48bn); Zhejiang Nanyang Technology Co,Ltd. (002389 CH) (1.12bn); China Aerospace Times Electronics (600879 CH) (780mn).


No Man's Sky: China Military UAV Market Overview

Equity Bottom-Up

New Oriental Education & Technology Group / Equity Bottom-Up

New Oriental Education & Technology Group is a leading provider of private educational services in China, offering a comprehensive range of programs including language training, test preparation courses, and online education. The company has expanded its offerings to include livestreaming e-commerce and private label products. It was founded in 1993 and is headquartered in Beijing, China.

New Oriental Education & Technology Group (9901 HK)

New Oriental Education & Technology Group

<ul>
<li>Oriental Selection achieves high-speed user growth through bilingual livestreaming, thanks to Douyin's  algorithmic recommendation mechanism before 6/18 ecommerce, after 6/18 the increase in the follower numbers &amp; GMV dropped sharply.</li>
<li>The unit price of the product is below average, due to the focus on produce and books, Agricultural livestreaming has always been a difficult to grow category</li>
<li>10%-15% Commission  is lower than industry average, and subsequent supply chain control and 1st party products have lower margins.</li>
</ul>


Oriental Selection achieves high-speed user growth through bilingual livestreaming, thanks to Douyin's  algorithmic recommendation mechanism before 6/18 ecommerce, after 6/18 the increase in the follower numbers &amp; GMV dropped sharply.
The unit price of the product is below average, due to the focus on produce and books, Agricultural livestreaming has always been a difficult to grow category
10%-15% Commission  is lower than industry average, and subsequent supply chain control and 1st party products have lower margins.


<ul>
<li>It took Wuhan 3-8 months for the economy to recover to pre-pandemic level,  but this time it's difficult as export and real estate are suffering from a crisis in confidence.</li>
<li>Fresh graduate and migrant workers will push up unemployment rate, and damage employment expectation, leading to little hope of rebound in discretionary consumption.</li>
<li>Government stimulus policies on consumptions are currently far from enough</li>
</ul>


It took Wuhan 3-8 months for the economy to recover to pre-pandemic level,  but this time it's difficult as export and real estate are suffering from a crisis in confidence.
Fresh graduate and migrant workers will push up unemployment rate, and damage employment expectation, leading to little hope of rebound in discretionary consumption.
Government stimulus policies on consumptions are currently far from enough


Over decade experiences in  Morgan Stanley, Bank of America Merrill Lynch, Agricultural Bank of China, Lenovo. 
Expertise include research and investment into tech companies of all stages. 
Asset management, private equity, strategic investment, investment banking,  equity research, corporate finance; particular focus on emerging technology.