NetEase earns Meta's margins at Meta's growth rate. It trades at half the multiple. I went through 14 companies to figure out how much of the discount is real.

I put together a comp table of 14 internet companies: eight listed in Hong Kong and six in the US. Matched them on consensus EPS growth rates and GAAP EBIT margins to try to separate the jurisdiction discount from the fundamental discount.

The cleanest pair: NetEase grows EPS at 18.9% per year with 40% EBIT margins. Meta grows at 18.0% with 41%. Growth and margins nearly identical. NetEase trades at 11.7x forward earnings. Meta at 21.6x. That is a 46% discount. NetEase earns from gaming, not advertising, so the businesses are not identical. But at matched growth and margins, the multiple gap is hard to explain without jurisdiction.

At every matched growth rate where margins also match, the HK name trades cheaper. The discount ranges from 44% to 46%.

The "Chinese companies hoard cash" thing. I went through the actual payout data. It has not been accurate since at least 2023.

* Tencent total shareholder yield (dividends + net buybacks after SBC dilution): 2.4%. Meta: 1.4%.
* [JD.com](http://JD.com) dividend yield alone: 3.8%, 70% payout ratio.
* NetEase total yield: 2.9%, per-share dividend CAGR of roughly 18% over the past four and a half years.

So the discount is not about growth and not about payouts. I went through what it does price: VIE ownership structure (low to medium risk), cash repatriation friction (low risk, every company in the sample has been paying and growing dividends for years), and geopolitical tail risk (medium to high, the one that actually matters).

Wrote the whole thing up with all 14 companies, the methodology, and a risk framework: [https://darrenleung1.substack.com/p/chinese-tech-is-cheap-how-much-of](https://darrenleung1.substack.com/p/chinese-tech-is-cheap-how-much-of)