HKEX-listed technology companies. Cloud infrastructure cycles, earnings distortions, and the gap between near-term EBITA and long-term platform value.
Hong Kong is where some of the world's largest tech platforms list, and where many foreign investors have stopped looking. The mega-cap internet companies on HKEX run cloud platforms among the largest outside the United States, music subscription services that lead the world's biggest single market, and AI infrastructure that is barely tracked in English-language sell-side research. They often trade at half the multiple of their American peers.
The discount has real reasons. Foreign capital has been rotated out. Regulatory tail risk is non-zero. Reported earnings are messy because most of these companies are mid-buildout on something that does not yet show up in the income statement. The buildout is also the opportunity. A cloud business growing thirty percent does not move the multiple of a company whose retail business is flat. Two years later, when the cloud is twice the size and starts contributing real margin, the multiple resets in one or two quarters.
The work is identifying the buildout that is closer to ending than the income statement suggests.
Profit +66%, Stock -66% from ATH. Spotify Trades at Four Times the Multiple.
Net profit +66 percent to RMB 10.3B. Paying subscribers 127M. Gross margin up nine points in two years. Forward EV/EBIT 6.8× while Spotify sits at 40×. An active US$1B buyback has been running since March 2025.
EBITA Down 57%. Cloud Up 36%. This Is What Amazon Looked Like in 2014.
2026 update: cash from the business halved and free cash flow turned negative for the first time since listing. A bigger problem than the original case priced, not just spending on growth. The cloud business still grew 34 percent. Downgraded from Conviction to Monitor until cash flow recovers.
← All analyses