Perceived stigma undermines mainland Chinese students' sociocultural adaptation in both university settings and the wider Hong Kong context (Mak & Cheung, 2010). While extensive research has demonstrated the adverse effects of stigma on student adjustment (e.g., Bhowmik et al., 2018), less is known about the identity-management processes underlying the long-term effect of perceived stigma on sociocultural adaptation. Self-group distancing (i.e., physically or psychologically distancing from one's stigmatized group) may offer short-term protection from stigma and negative evaluation, but this strategy ultimately hampers students' long-term adjustment. Perceived membership permeability—the belief that one can move from the stigmatized ingroup into the host majority—further shapes these responses by making individual mobility appear feasible and potentially incentivizing distancing. A two-wave longitudinal study of 190 mainland Chinese students in Hong Kong tested a process model with two aims: (1) to examine self-group distancing as a mediator between perceived stigma and subsequent sociocultural adaptation; and (2) to assess perceived membership permeability as a moderator of the stigma-to-distancing pathway. Students reported perceived stigma, self-group distancing, and baseline adaptation at the start of the 2024/25 academic year; sociocultural adaptation was reassessed six months later. We controlled for student age, gender, length of stay, Cantonese proficiency, and prior sociocultural adaptation. Results found that self-group distancing mediated the association between perceived stigma at Time 1 and sociocultural adaptation at Time 2. Both stigma and self-group distancing exerted unique, negative effects on sociocultural adaptation six months later. Notably, perceived membership permeability moderated the stigma-to-distancing link: higher stigma predicted greater self-group distancing primarily among students who perceived greater membership permeability. These findings indicate that both perceived stigma and perceived membership permeability interact to drive self-group distancing, which in turn negatively predicted sociocultural adaptation over time.