China — RG Research

Reality Gap analysis for 7 major HK-listed Chinese companies. Pilot dataset · 4 annual periods · All values in HKD billions.

Prototype-grade data Source: yfinance / Yahoo Finance H-share market cap basis

1. Preliminary Findings

tentative

State-owned energy and telecom (CNOOC RG10 0.69, China Mobile 0.68) trade with market caps at or below their RG fundamental base — a structural pattern absent from US large-cap tech.

tentative

Chinese tech names (Tencent 1.74, Meituan 2.59, Alibaba 1.43) show RG10 above 1.0, but remain well below comparable US tech multiples. The gap appears structurally smaller on the Hang Seng.

finding

CNOOC's RG10 moved from 0.14 (FY2021) to 0.69 (FY2024) — a full re-rating driven by oil price recovery and dividend increases, not intangible value creation.

finding

Meituan's RG10 compressed from 9.24 (FY2021) to 2.59 (FY2024) as the company moved from heavy losses to profitability, collapsing the smoothed-earnings denominator problem.

open

BYD (RG10 2.08) is harder to interpret: a capital-intensive manufacturer with rapidly growing intangibles (R&D capitalisation). Whether the RG formula handles this correctly under ASBE accounting standards requires further analysis.

2. RG10 Comparison — Current Period

Sorted by RG10 descending. Bar width proportional to RG10 value.

Meituan

3690.HK Technology 2.59

RG8 2.7 · RG10 2.6 · RG12 2.5 FY2024

BYD

1211.HK Consumer Discretionary 2.08

RG8 2.4 · RG10 2.1 · RG12 1.9 FY2025

Tencent

0700.HK Technology 1.74

RG8 2.0 · RG10 1.7 · RG12 1.5 FY2024

Alibaba

9988.HK Consumer Discretionary 1.43

RG8 1.6 · RG10 1.4 · RG12 1.3 FY2025 (Mar)

JD.com

9618.HK Consumer Discretionary 0.99

RG8 1.1 · RG10 1.0 · RG12 0.9 FY2024

CNOOC

0883.HK Energy 0.69

RG8 0.8 · RG10 0.7 · RG12 0.6 FY2024

China Mobile

0941.HK Telecommunications 0.68

RG8 0.8 · RG10 0.7 · RG12 0.6 FY2024

RG10 < 1.0 (fundamental cover) 1–2 2–4 RG10 = 1.0 reference

3. Full Metrics Table

Company	MC (B HKD)	TE (B HKD)	Goodwill	Intangibles	G (4yr avg)	Net Income	RG8	RG10	RG12
Meituan 3690.HK	495	142	28	2	5	36	2.73	2.59	2.47
BYD 1211.HK	1,028	194	4	47	30	33	2.37	2.08	1.86
Tencent 0700.HK	4,421	742	142	90	181	194	2.02	1.74	1.52
Alibaba 9988.HK	2,263	721	256	34	86	129	1.61	1.43	1.29
JD.com 9618.HK	345	169	26	45	18	41	1.10	0.99	0.89
CNOOC 0883.HK	1,331	731	15	2	118	138	0.79	0.69	0.62
China Mobile 0941.HK	1,752	1,304	35	53	128	138	0.75	0.68	0.62

Current period data. G = 4-year average net income (smoothed earnings). All in HKD billions.

4. RG10 Over Time — Per Company

4 annual periods. Bar = RG10 value. Reference line at 1.0.

Tencent 0700.HK · Technology

Current RG10: 1.74

FY2021 1.54

FY2022 1.20

FY2023 1.08

FY2024 1.74

Alibaba 9988.HK · Consumer Discretionary

Current RG10: 1.43

FY2023 (Mar) 1.07

FY2024 (Mar) 0.93

FY2025 (Mar) 1.43

China Mobile 0941.HK · Telecommunications

Current RG10: 0.68

FY2021 0.30

FY2022 0.35

FY2023 0.47

FY2024 0.68

Meituan 3690.HK · Technology

Current RG10: 2.59

FY2021 9.24

FY2022 6.66

FY2023 2.69

FY2024 2.59

JD.com 9618.HK · Consumer Discretionary

Current RG10: 0.99

FY2021 1.96

FY2022 1.72

FY2023 0.83

FY2024 0.99

CNOOC 0883.HK · Energy

Current RG10: 0.69

FY2021 0.14

FY2022 0.20

FY2023 0.27

FY2024 0.69

BYD 1211.HK · Consumer Discretionary

Current RG10: 2.08

FY2022 0.60

FY2023 0.65

FY2024 0.73

FY2025 2.08

5. Structural Patterns

Fundamental-covered (RG10 < 1.0)

Market cap at or below estimated fundamental base.

JD.com 0.99

CNOOC 0.69

China Mobile 0.68

State-owned enterprises with large tangible asset bases and steady earnings tend to cluster here. On US and EU markets this is rare among large-caps.

Fundamental gap (RG10 ≥ 1.0)

Market cap exceeds estimated fundamental base.

Meituan 2.59

BYD 2.08

Tencent 1.74

Alibaba 1.43

Internet/tech and fast-growth names. Even here, RG10 is markedly lower than comparable US tech (Apple 2.9, Microsoft ~12, NVIDIA ≫ 10). The Hang Seng premium appears structurally compressed.

6. Methodology and Limitations

Dimension	Status	Note
Source	yfinance / Yahoo Finance	Re-aggregated from HKEX filings. Not audited. Prototype-grade only.
Coverage	7 companies, HK-listed	H-share basis. A-share-dominant SOEs (ICBC, PetroChina) excluded due to inconsistent market cap reconstruction.
Historical depth	4 annual periods (FY2021–FY2024/25)	Insufficient for long-horizon fragility analysis. SEC XBRL covers US back to 2009.
Market cap	Current MC or shares × year-end close	Historical MC approximated using current shares outstanding × year-end price. Share count drift not corrected.
Earnings smoothing	4-year average net income	Fixed across all periods (same G for all obs). True rolling smoothing not applied in this pilot.
Currency	HKD billions throughout	No CNY/HKD FX adjustment. No CPI inflation adjustment (unlike US dataset).
Accounting standards	ASBE (Chinese GAAP)	Differs from IFRS/US GAAP: goodwill impairment, R&D capitalisation, minority interest treatment. RG interpretation may require adjustment.
Goodwill & intangibles	Present for 6/7 companies	ICBC: no goodwill/intangibles reported in yfinance schema (bank balance sheet structure).

7. Extension Roadmap

Phase	What	Source	Status
1 — Current	7 HK-listed large-caps, FY2021–FY2024, H-share basis	yfinance / Yahoo Finance	live
2 — Deepen	Tushare Pro free token → A-share fundamentals 2007–present for 30+ companies	Tushare Pro (free registration)	planned
3 — Broaden	Expand to CSI 300 constituents, add HKEX historical prices	AKShare / Baostock (Chinese IP required)	planned
4 — Cross-market	RG comparison: Hang Seng vs S&P 500 vs Nikkei 225 vs DAX 40 on unified basis	All existing sources + Phase 2–3	exploratory

All data is illustrative and for research purposes only. Not investment advice. Data sourced via yfinance / Yahoo Finance from HKEX-reported financials. Values in HKD billions. RG = Market Cap / (Tangible Equity + N × Smoothed Earnings).