China Literature (0772) AI Stock Analysis

• Market Cap: $29.71B
• Dividend Yield: N/A
• Average Volume (3M): 7.37M
• Price to Earnings (P/E): 27.6
• Beta (1Y): 1.30
• Revenue Growth: 13.74%
• EPS Growth: -125.64%
• Country: HK
• Employees: 1,740
• Sector: Communication Services
• Sector Strength: 83
• Industry: Internet Content & Information
• EPS (TTM): 0.48
• Shares Outstanding: 1,021,089,230
• 10 Day Avg. Volume: 3,750,294
• 30 Day Avg. Volume: 7,374,337
• PEG Ratio: -0.66
• Price to Book (P/B): 1.51
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 21.58
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $33.99
• Price Target Upside: 11.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 66 Neutral
• 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 Business Overview & Revenue Model

Company Description

China 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 Money

China 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

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

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

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.12B	7.01B	7.63B	8.67B	8.53B
Gross Profit	3.92B	3.37B	4.03B	4.60B	4.23B
EBITDA	748.35M	1.22B	1.20B	1.75B	-2.62B
Net Income	-209.22M	804.88M	608.19M	1.85B	-4.50B
Balance Sheet
Total Assets	22.95B	23.19B	22.73B	23.30B	21.32B
Cash, Cash Equivalents and Short-Term Investments	7.62B	6.28B	7.51B	7.21B	6.26B
Total Debt	166.21M	238.10M	617.98M	1.45B	1.33B
Total Liabilities	4.57B	4.16B	4.78B	6.11B	6.22B
Stockholders Equity	18.37B	19.02B	17.96B	17.19B	15.09B
Cash Flow
Free Cash Flow	2.41B	954.13M	1.25B	879.35M	821.95M
Operating Cash Flow	2.53B	1.13B	1.58B	1.12B	1.11B
Investing Cash Flow	-1.76B	-3.39B	528.10M	936.23M	-4.19B
Financing Cash Flow	-346.01M	-510.82M	-1.15B	-349.99M	-92.34M

China Literature Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 30.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1357	74 Outperform	$40.59B	45.82	17.66%	2.48%	21.71%	103.69%
9898	72 Outperform	HK$18.81B	7.30	10.79%	8.36%	0.43%	21.65%
2518	68 Neutral	€25.63B	14.72	6.58%	8.61%	-6.14%	-15.39%
0772	66 Neutral	$29.71B	27.55	-1.14%	―	13.74%	-125.64%
1896	64 Neutral	HK$8.20B	41.37	2.01%	4.49%	-15.71%	-80.38%
Sector *	61 Neutral	$40.40B	-0.91	-12.15%	3.89%	2.03%	-69.70%
2390	58 Neutral	HK$3.06B	―	-0.40%	―	-19.99%	98.97%

China Literature Corporate Events

China Literature Schedules Board Meeting to Review Interim Results

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

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

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

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.