China Literature (0772) AI Stock Analysis

• Market Cap: HK$27.06B
• Dividend Yield: N/A
• Average Volume (3M): 4.22M
• 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: 87
• Industry: Internet Content & Information
• EPS (TTM): -0.22
• Shares Outstanding: 1,025,028,100
• 10 Day Avg. Volume: 3,411,380
• 30 Day Avg. Volume: 4,215,119
• PEG Ratio: 1.96
• Price to Book (P/B): 1.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.91
• 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: HK$29.69
• Price Target Upside: 12.47% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

The overall stock score of 62.5 reflects strong revenue growth and cash flow performance, offset by a net income loss and poor valuation metrics. The solid balance sheet provides a cushion, but the negative P/E ratio and lack of dividends are significant drawbacks. Technical indicators show moderate momentum but face resistance at longer-term averages.

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

Income Statement

Balance Sheet

Cash Flow

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
7.92B	7.01B	7.63B	8.67B	8.53B	8.35B
	Gross Profit
3.85B	3.37B	4.03B	4.60B	4.23B	3.69B
	EBIT
852.81M	709.31M	1.42B	1.25B	966.43M	1.19B
	EBITDA
956.56M	1.22B	1.20B	1.75B	-2.62B	1.61B
	Net Income Common Stockholders
932.50M	804.88M	608.19M	1.85B	-4.50B	1.10B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
628.54M	6.28B	7.51B	7.21B	6.26B	6.35B
	Total Assets
6.38B	23.19B	22.73B	23.30B	21.32B	26.25B
	Total Debt
878.18M	238.10M	617.98M	1.45B	1.33B	1.39B
	Net Debt
547.09M	-2.56B	-4.93B	-3.08B	-1.52B	-4.54B
	Total Liabilities
1.92B	4.16B	4.78B	6.11B	6.22B	6.84B
	Stockholders Equity
4.38B	19.02B	17.96B	17.19B	15.09B	19.40B
Cash Flow		Free Cash Flow
2.10B	954.13M	1.25B	879.35M	821.95M	565.92M
	Operating Cash Flow
2.13B	1.13B	1.58B	1.12B	1.11B	782.50M
	Investing Cash Flow
-2.48B	-3.39B	528.10M	936.23M	-4.19B	-1.29B
	Financing Cash Flow
-107.68M	-510.82M	-1.15B	-349.99M	-92.34M	-1.93B

China Literature Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 26.40
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 26.4 is above the 20-day moving average (MA) of 26.20, above the 50-day MA of 26.05, and below the 200-day MA of 26.65, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 50.76 is Neutral, neither overbought nor oversold. The STOCH value of 33.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0772.

China Literature Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0700	78 Outperform	$4.72T	22.22	21.25%	0.64%	8.88%	54.27%
1024	78 Outperform	HK$228.41B	13.46	27.71%	―	9.84%	142.09%
9992	78 Outperform	€253.24B	75.82	33.41%	0.17%	103.44%	186.51%
1810	76 Outperform	$1.31T	48.83	13.43%	―	32.62%	32.85%
3690	70 Outperform	$851.70B	21.27	22.27%	―	19.90%	157.52%
0772	63 Neutral	HK$27.06B	27.55	-1.14%	―	13.74%	-125.64%
Sector *	60 Neutral	$14.02B	6.62	-2.88%	3.71%	2.35%	-37.08%

China Literature Corporate Events

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.

China Literature Expects 2024 Net Loss Due to Goodwill Impairment

China Literature Limited has issued a profit warning, anticipating a net loss of RMB150 million to RMB250 million for the 2024 financial year, primarily due to a non-cash impairment of goodwill from its 2018 acquisition of New Classics Media Holdings Limited. Despite the expected loss, the company plans to focus on developing top-tier film and drama content, which may lead to higher production costs and extended project timelines. However, this strategic shift is expected to strengthen its market position and create long-term value for its intellectual property business.