China Literature Ltd. (HK:0772)
:0772
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China Literature
(0772)
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Rating:46Neutral
Price Target:
HK$20.00
▼(-43.37% Downside)
Action:Reiterated
Date:06/05/26
The score is held down primarily by worsening profitability and the 2025 reversal to negative operating/free cash flow, reinforced by bearish price momentum (below key moving averages with negative MACD). A strong, low-leverage balance sheet is the main stabilizing factor, but losses and a negative P/E limit valuation support.
Positive Factors
Low leverage / strong balance sheet
A very low leverage profile and sizable equity provide lasting financial flexibility, reducing solvency risk and enabling the company to fund content acquisition, IP development or weather cyclical revenue shocks without immediate refinancing pressure.
Negative Factors
Volatile and declining revenue trend
Inconsistent top-line momentum and a sharp 2025 decline undermine predictability of IP hit rates and recurring reader monetization. Persistent volatility complicates content investment pacing and weakens long-term planning for adaptations and licensing pipelines.
Read all positive and negative factors
Positive Factors
Negative Factors
Low leverage / strong balance sheet
A very low leverage profile and sizable equity provide lasting financial flexibility, reducing solvency risk and enabling the company to fund content acquisition, IP development or weather cyclical revenue shocks without immediate refinancing pressure.
Read all positive factors
China Literature (0772) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
HK$20.84B
Dividend YieldN/A
Average Volume (3M)4.19M
Price to Earnings (P/E)―
Beta (1Y)1.44
Revenue Growth-9.16%
EPS Growth-273.98%
CountryHK
Employees1,740
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)-0.74
Shares Outstanding1,021,476,260
10 Day Avg. Volume4,011,075
30 Day Avg. Volume4,186,547
Financial Highlights & Ratios
PEG Ratio-0.15
Price to Book (P/B)1.72
Price to Sales (P/S)4.10
P/FCF Ratio-82.65
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
HK$37.06Price Target Upside4.94% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)1.25
Revenue Forecast (FY)HK$7.95B
China Literature Business Overview & Revenue Model
Company Description
China Literature Limited is a major investment holding company that manages a leading digital literature platform across the People's Republic of China. It strategically monetizes its extensive catalog of intellectual properties (IPs) through key ...
How the Company Makes Money
China Literature primarily makes money through (1) online reading and related digital content services and (2) commercialization of its literary IP.
1) Online reading and related digital content services
- Paid digital reading: The company moneti...
China Literature Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
78
Positive
Cash Flow
39
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 7.37B | 8.12B | 7.01B | 7.63B | 8.67B |
| Gross Profit | 3.54B | 3.92B | 3.37B | 4.03B | 4.60B |
| EBITDA | 641.81M | 748.35M | 1.22B | 1.20B | 1.12B |
| Net Income | -776.05M | -209.22M | 804.88M | 608.19M | 1.85B |
Balance Sheet | |||||
| Total Assets | 21.59B | 22.95B | 23.19B | 22.73B | 23.30B |
| Cash, Cash Equivalents and Short-Term Investments | 7.73B | 7.62B | 6.28B | 7.51B | 7.21B |
| Total Debt | 181.43M | 166.21M | 238.10M | 617.98M | 1.45B |
| Total Liabilities | 4.06B | 4.57B | 4.16B | 4.78B | 6.11B |
| Stockholders Equity | 17.53B | 18.37B | 19.02B | 17.96B | 17.19B |
Cash Flow | |||||
| Free Cash Flow | -365.16M | 2.41B | 954.13M | 1.25B | 879.35M |
| Operating Cash Flow | -276.51M | 2.53B | 1.13B | 1.58B | 1.12B |
| Investing Cash Flow | -1.06B | -1.76B | -3.39B | 528.10M | 936.23M |
| Financing Cash Flow | -225.94M | -346.01M | -510.82M | -1.15B | -349.99M |
China Literature Technical Analysis
Negative
35.32
Price Trends
24.87
Negative
28.70
Negative
33.37
Negative
Market Momentum
-1.09
Positive
31.30
Neutral
8.53
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0772, the sentiment is Negative. The current price of 35.32 is above the 20-day moving average (MA) of 23.04, above the 50-day MA of 24.87, and above the 200-day MA of 33.37, indicating a bearish trend. The MACD of -1.09 indicates Positive momentum. The RSI at 31.30 is Neutral, neither overbought nor oversold. The STOCH value of 8.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0772.
China Literature Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | HK$3.97T | 14.63 | 19.90% | 0.75% | 14.96% | 21.57% | |
72 Outperform | HK$5.76B | 8.88 | 6.13% | 4.71% | 13.41% | 210.17% | |
68 Neutral | HK$14.14B | 4.67 | 9.89% | 8.13% | 1.60% | 4.87% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
54 Neutral | HK$308.75B | 755.55 | 0.13% | ― | -2.26% | -98.47% | |
51 Neutral | HK$1.63B | -8.52 | -4.79% | ― | -19.31% | -2719.11% | |
46 Neutral | HK$20.84B | -23.33 | -4.23% | ― | -9.16% | -273.98% |
* Communication Services Sector Average
HK:0772
China Literature
20.40
-8.60
-29.66%
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China Literature Corporate Events
China Literature books RMB300 million tax hit after Xinjiang subsidiary review
Jun 3, 2026
China Literature has disclosed that a subsidiary completed a self-review of tax risks related to its own entities in Khorgos, Xinjiang, following a notice from local tax authorities. The review concluded that the subsidiary must make supplementary...
China Literature Moves to Majority Control in Target Firm via Tencent-Linked Deal
Jun 2, 2026
China Literature’s PRC operating entity Shanghai Hongwen has agreed to acquire an additional 28.22% stake in a target company from Tencent-controlled Linzhi Lichuang for RMB400.78 million. The deal will raise China Literature’s holding...
China Literature Shareholders Approve All AGM Resolutions and Refresh Board
Jun 2, 2026
China Literature reported the voting results of its June 2, 2026 annual general meeting in Hong Kong, where shareholders approved all resolutions put forward, including the receipt of 2025 financial statements, director remuneration arrangements, ...
China Literature Sets Out Board Line-Up and Committee Roles
Jun 2, 2026
China Literature Limited has disclosed the current composition of its board of directors, detailing the roles of executive, non-executive, and independent non-executive members. The board is led by Chairman Pu Hai Tao, with Hou Xiaonan serving as ...
China Literature Sets 2026 AGM to Approve Board Changes and Share Issuance Mandate
Apr 30, 2026
China Literature Limited has convened its annual general meeting for 2:30 p.m. on June 2, 2026, in Hong Kong, where shareholders will review the audited financial statements for the year ended December 31, 2025 and consider routine corporate gover...
China Literature Refreshes Board With New Independent Directors Ahead of 2026 AGM
Apr 17, 2026
China Literature Limited announced that independent non-executive directors Yu Chor Woon Carol and Liu Junmin will retire by rotation and not seek re-election at the company’s 2026 annual general meeting after nearly nine years on the board....
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.