Buffett Disciple Rob Vinall Bets Big on Chinese Equities Due to Valuation Gap

Rob Vinall, the founder and managing director of RV Capital, is significantly increasing his exposure to Chinese equities, arguing that depressed valuations and strong corporate governance present a compelling investment opportunity. The English-born investor, who once worked at Goldman Sachs, stated that China now accounts for approximately one-third of his Business Owner Fund’s holdings, a position he has built since 2024.

Vinall’s strategy is rooted in value investing principles he began self-studying during the dot-com crash and refined after attending the Berkshire Hathaway annual meeting in Omaha in 2006, which he described as a “life-changing experience.” Rather than relying solely on traditional metrics like price-to-earnings or price-to-book ratios, Vinall evaluates companies based on an “owner return” target of 15% annually, derived from cash yield combined with long-term earnings growth.

A key component of his thesis is a preference for founder-led businesses with narrowing but widening economic moats. Vinall believes that large, static moats can foster complacency, whereas founder CEOs who view their companies as a life’s work are more likely to adapt to evolving market conditions. He specifically cited Meta Platforms CEO Mark Zuckerberg as an example of this dynamic.

The contrast between the US and Chinese markets is stark. While the S&P 500 has risen 11.8% in 2026, the Shanghai Composite is down 0.5%. Vinall noted that the estimated price-to-earnings multiple for the S&P 500 is around 21.1 by the end of 2026, compared to just 11.4 for the MSCI China index. “Cheap valuations… are the reason above any other why I feel confident investing in China,” Vinall said, adding that good companies are available at attractive prices because the region remains out of favor with many investors.

Four primary Chinese stocks form the core of Vinall’s positions: Luckin Coffee, Tencent, H World Group, and Yum China. He highlighted that all four are still led by their founders and possess wide business moats. He expects these companies to deliver earnings growth of at least 10% in the coming years, supplemented by dividends and share buybacks returning 5% or more of capital annually, which he says comfortably meets his 15% owner return target.

Vinall’s confidence is bolstered by recent visits to China following the lifting of COVID restrictions. He observed a rapidly innovating economy with world-class companies in sectors beyond manufacturing, including consumer internet and e-commerce. This positive on-the-ground assessment contrasts with the predominantly negative perception of Chinese assets over the past two decades.

In contrast to his bullish stance on China, Vinall remains cautious about the broader US market. In June, he called it “the weirdest market I’ve ever seen,” noting that while the S&P 500 hit record highs driven by AI momentum, many individual stocks were trading 50% below their peaks. This perspective led him to purchase Canada-listed Constellation Software during its recent AI-driven selloff, citing its continued alignment with founder ethic principles.

The investment community’s focus on China is expected to heighten this week as President Xi Jinping travels to Washington for a summit with US President Donald Trump, beginning September 23. Artificial intelligence and stock-market performance are anticipated to be central topics as the two largest economies compete for technological leadership.