China Literature (0772) AI Stock Analysis

• Market Cap: $29.74B
• Dividend Yield: N/A
• Average Volume (3M): 7.11M
• Price to Earnings (P/E): 27.6
• Beta (1Y): 1.33
• Revenue Growth: 13.74%
• EPS Growth: -125.64%
• Country: HK
• Employees: 1,740
• Sector: Communication Services
• Sector Strength: 89
• Industry: Internet Content & Information
• EPS (TTM): -0.22
• Shares Outstanding: 1,022,089,230
• 10 Day Avg. Volume: 11,304,703
• 30 Day Avg. Volume: 7,110,449
• 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: $30.22
• Price Target Upside: 2.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 61 Neutral
• Price Target: HK$29.00 ▼(-1.19%Downside)

The stock's score is primarily supported by strong cash flow and a solid balance sheet, despite profitability issues. Technical indicators show neutral momentum, while the valuation is negatively impacted by the net loss and lack of dividend yield.

China Literature Business Overview & Revenue Model

Company Description

China Literature Limited, an investment holding company, operates an online literature platform in the People's Republic of China. The company promotes intellectual properties primarily through its online literature platforms, such as QQ Reading and Qidian; and New Classics Media, a film and TV drama series production house. It is also involved in the self-operated channels business on partner distribution platforms. In addition, the company licenses the content to third-party partners for distribution, as well as offers online paid reading and content adaptations into various entertainment formats. Further, it provides reading, copyright commercialization, and writer cultivation and brokerage services; and operates text work reading and related open platform through technology methods and digital media, including personal computers, Internet, and mobile network. Additionally, the company engages in the production and distribution of television series, web series, and films; licensing and distribution of film and television properties; licensing copyrights; sale of physical books; and operation of in-house online games, etc. The company was founded in 2002 and is headquartered in Shanghai, the People's Republic of China. China Literature Limited is a subsidiary of Tencent Holdings Limited.

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

China Literature experienced strong revenue growth but faced profitability challenges with a net loss in 2024. The balance sheet is solid with low leverage and a strong equity position. Cash flow performance is strong, supporting the company's liquidity and operational flexibility despite the income loss.

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
	EBIT
-336.12M	709.31M	1.42B	1.25B	966.43M
	EBITDA
748.35M	1.22B	1.20B	1.75B	-2.62B
	Net Income Common Stockholders
-209.22M	804.88M	608.19M	1.85B	-4.50B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.62B	6.28B	7.51B	7.21B	6.26B
	Total Assets
22.95B	23.19B	22.73B	23.30B	21.32B
	Total Debt
166.21M	238.10M	617.98M	1.45B	1.33B
	Net Debt
-3.10B	-2.56B	-4.93B	-3.08B	-1.52B
	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: 29.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 29.35 is above the 20-day moving average (MA) of 27.22, above the 50-day MA of 26.42, and above the 200-day MA of 26.86, indicating a bullish trend. The MACD of 0.74 indicates Negative momentum. The RSI at 62.43 is Neutral, neither overbought nor oversold. The STOCH value of 77.46 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
Sector *	61 Neutral	$14.78B	5.89	-4.32%	3.67%	2.75%	-30.30%
0772	61 Neutral	$29.74B	27.55	-1.14%	―	13.74%	-125.64%
MEIUF		$3.84B	34.64	17.66%	―	―	―
8AHA		€2.70B	12.46	6.58%	7.57%	―	―
9898	72 Outperform	HK$18.78B	7.29	10.79%	8.25%	0.43%	21.65%
1896	67 Neutral	HK$8.60B	45.35	2.01%	―	-15.71%	-80.38%
2390	54 Neutral	HK$2.83B	―	-0.40%	―	-19.99%	98.97%

China Literature Corporate Events

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.

China Literature Reports 2024 Results, Boosted by IP Success and AI Integration

China Literature Limited reported its annual results for 2024, showing a 15.8% increase in revenues to RMB 8.1 billion, despite an operating loss of RMB 336 million. The company highlighted the success of its IP operations, with revenues rising 34% year-over-year, driven by blockbuster titles and the commercialization of popular content like ‘Ne Zha 22.’ The integration of AI technologies, such as the DeepSeek-R1 model in their ‘Writer Assistant’ tool, has enhanced content creation, leading to significant growth in user engagement and new writer income. These developments underscore China Literature’s strategic focus on quality content and technological innovation, reinforcing its leading position in the industry.