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China Literature Ltd. (HK:0772)
:0772

China Literature (0772) AI Stock Analysis

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HK

China Literature

(OTC:0772)

Rating:66Neutral
Price Target:
HK$34.00
▲(11.11%Upside)
The stock score is primarily supported by strong technical indicators and robust cash flow performance. However, the negative net income impacts valuation, resulting in a lower overall score. Improving profitability would significantly enhance the company's financial standing and stock appeal.

China Literature (0772) vs. iShares MSCI Hong Kong ETF (EWH)

China Literature Business Overview & Revenue Model

Company DescriptionChina Literature Limited (0772) is a leading online literature platform in China, providing a comprehensive ecosystem for writers and readers. The company operates in the digital entertainment sector and is primarily focused on online publishing and intellectual property (IP) development. Its core services include an extensive library of literature across various genres, available through its website and mobile applications. Additionally, China Literature engages in IP operations, adapting popular literary works into TV series, films, and other media formats.
How the Company Makes MoneyChina Literature makes money through a multifaceted revenue model that includes online reading services, IP operations, and content licensing. The company generates revenue by offering premium content through subscriptions and pay-per-view models on its digital platforms. In addition, it monetizes its vast library of works by licensing content to third parties for adaptation into films, TV series, and games. Significant partnerships with media production companies enhance its IP development capabilities, further contributing to its revenue. Advertising services on its platforms also provide an additional income stream.

China Literature Financial Statement Overview

Summary
Despite a strong revenue growth of 15.8%, the company's financial performance is hindered by a net income loss in 2024. The balance sheet is strong with low leverage and high equity ratio, and cash flow remains robust with a significant increase in free cash flow, indicating good liquidity and operational flexibility.
Income Statement
58
Neutral
The company showed a significant decline in net income, turning from a profit of HKD 804.9 million in 2023 to a loss of HKD 209.2 million in 2024. Gross profit margin decreased slightly from 48.1% in 2023 to 48.3% in 2024. Revenue growth was strong at 15.8% from 2023 to 2024, but the negative net income and EBIT in 2024 are concerning.
Balance Sheet
70
Positive
The company maintains a strong equity position with an equity ratio of 80.1% in 2024. The debt-to-equity ratio is low at 0.009, indicating low leverage. However, return on equity turned negative in 2024, reflecting the net loss.
Cash Flow
82
Very Positive
Free cash flow increased significantly by 152.4% from 2023 to 2024, showing strong cash generation capability. The operating cash flow to net income ratio improved substantially, indicating better cash earnings quality. The company shows a robust cash flow position despite the net income loss.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue8.12B7.01B7.63B8.67B8.53B
Gross Profit3.92B3.37B4.03B4.60B4.23B
EBITDA748.35M1.22B1.20B1.75B-2.62B
Net Income-209.22M804.88M608.19M1.85B-4.50B
Balance Sheet
Total Assets22.95B23.19B22.73B23.30B21.32B
Cash, Cash Equivalents and Short-Term Investments7.62B6.28B7.51B7.21B6.26B
Total Debt166.21M238.10M617.98M1.45B1.33B
Total Liabilities4.57B4.16B4.78B6.11B6.22B
Stockholders Equity18.37B19.02B17.96B17.19B15.09B
Cash Flow
Free Cash Flow2.41B954.13M1.25B879.35M821.95M
Operating Cash Flow2.53B1.13B1.58B1.12B1.11B
Investing Cash Flow-1.76B-3.39B528.10M936.23M-4.19B
Financing Cash Flow-346.01M-510.82M-1.15B-349.99M-92.34M

China Literature Technical Analysis

Technical Analysis Sentiment
Positive
Last Price30.60
Price Trends
50DMA
28.13
Positive
100DMA
27.54
Positive
200DMA
27.39
Positive
Market Momentum
MACD
0.44
Positive
RSI
61.67
Neutral
STOCH
51.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0772, the sentiment is Positive. The current price of 30.6 is above the 20-day moving average (MA) of 29.75, above the 50-day MA of 28.13, and above the 200-day MA of 27.39, indicating a bullish trend. The MACD of 0.44 indicates Positive momentum. The RSI at 61.67 is Neutral, neither overbought nor oversold. The STOCH value of 51.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0772.

China Literature Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$40.59B45.8217.66%2.48%21.71%103.69%
72
Outperform
HK$18.81B7.3010.79%8.36%0.43%21.65%
68
Neutral
€25.63B14.726.58%8.61%-6.14%-15.39%
66
Neutral
$29.71B27.55-1.14%13.74%-125.64%
64
Neutral
HK$8.20B41.372.01%4.49%-15.71%-80.38%
61
Neutral
$40.40B-0.91-12.15%3.89%2.03%-69.70%
58
Neutral
HK$3.06B-0.40%-19.99%98.97%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0772
China Literature
30.60
5.60
22.40%
HK:2390
Zhihu, Inc. Class A
12.50
4.05
47.93%
HK:1896
Maoyan Entertainment
7.33
0.12
1.66%
HK:9898
Weibo Corp Class A
76.85
19.26
33.44%
HK:1357
Meitu
9.50
7.11
296.99%
HK:2518
Autohome Inc Class A
52.50
1.99
3.95%

China Literature Corporate Events

China Literature Schedules Board Meeting to Review Interim Results
Jun 26, 2025

China Literature Limited has announced a board meeting scheduled for August 12, 2025, to discuss and approve the interim results for the first half of the year ending June 30, 2025. The meeting will also consider the payment of an interim dividend, reflecting the company’s ongoing financial strategies and potential shareholder returns.

The most recent analyst rating on (HK:0772) stock is a Buy with a HK$32.00 price target. To see the full list of analyst forecasts on China Literature stock, see the HK:0772 Stock Forecast page.

China Literature Expands Stake in Target Company with Strategic Acquisition
May 30, 2025

China Literature Limited has announced a significant acquisition, where its PRC operating entity, Shanghai Hongwen, has agreed to acquire a 26.67% equity interest in a target company for approximately RMB324.80 million. This acquisition will increase China Literature’s stake in the target company to 31.48%, although the target will not become a subsidiary, and its financials will remain separate. This transaction is classified as a connected transaction under Hong Kong’s Listing Rules due to Tencent’s involvement, a major shareholder in both China Literature and the target company.

The most recent analyst rating on (HK:0772) stock is a Buy with a HK$32.00 price target. To see the full list of analyst forecasts on China Literature stock, see the HK:0772 Stock Forecast page.

China Literature Limited Successfully Passes All Resolutions at 2025 AGM
May 30, 2025

China Literature Limited held its Annual General Meeting (AGM) on May 30, 2025, where all proposed resolutions were passed by poll. The resolutions included the re-election of directors, authorization of director remuneration, re-appointment of auditors, and granting of mandates to the directors for share issuance and buyback. The successful passing of these resolutions indicates strong shareholder support and positions the company for continued operational stability and strategic growth.

The most recent analyst rating on (HK:0772) stock is a Buy with a HK$32.00 price target. To see the full list of analyst forecasts on China Literature stock, see the HK:0772 Stock Forecast page.

China Literature Limited Announces 2025 Annual General Meeting
Apr 22, 2025

China Literature Limited has announced its upcoming annual general meeting scheduled for May 30, 2025, in Hong Kong. Key agenda items include the consideration of audited financial statements, re-election of directors, and re-appointment of auditors. The meeting will also address resolutions related to the issuance of additional shares and related securities, reflecting the company’s strategic focus on expanding its financial and operational capabilities. This announcement underscores the company’s commitment to maintaining robust corporate governance and enhancing shareholder value.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 12, 2025