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China Literature Ltd. (HK:0772)
:0772
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China Literature (0772) AI Stock Analysis

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HK:0772

China Literature

(OTC:0772)

Rating:66Neutral
Price Target:
HK$34.00
▲(13.71%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, 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 MoneyChina Literature makes money through multiple revenue streams, with the primary one being the monetization of its digital content. This includes subscription fees and advertising revenue from its online reading platforms. The company also generates income by licensing its intellectual properties for adaptation into films, television series, and games, leveraging the popularity of its stories to create profitable multimedia franchises. Additionally, China Literature benefits from strategic partnerships, particularly with Tencent, which helps in distributing content across a broader audience and integrating its services with Tencent's ecosystem, thus enhancing user engagement and revenue potential.

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
Neutral
Last Price29.90
Price Trends
50DMA
29.69
Positive
100DMA
27.88
Positive
200DMA
27.59
Positive
Market Momentum
MACD
0.35
Positive
RSI
45.98
Neutral
STOCH
27.12
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0772, the sentiment is Neutral. The current price of 29.9 is below the 20-day moving average (MA) of 30.80, above the 50-day MA of 29.69, and above the 200-day MA of 27.59, indicating a neutral trend. The MACD of 0.35 indicates Positive momentum. The RSI at 45.98 is Neutral, neither overbought nor oversold. The STOCH value of 27.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
66
Neutral
$31.55B27.55-1.14%13.74%-125.64%
61
Neutral
$42.21B-3.57-11.12%4.05%2.99%-33.83%
$7.03B34.6417.66%3.38%
€2.81B14.356.58%7.15%
74
Outperform
HK$18.83B7.3110.79%8.50%0.43%21.65%
58
Neutral
HK$8.87B44.742.01%4.16%-15.71%-80.38%
58
Neutral
HK$2.98B-0.40%-19.99%98.97%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0772
China Literature
29.90
5.05
20.32%
MEIUF
Meitu
0.86
0.58
207.14%
DE:8AHA
Autohome Inc Class A
5.75
1.02
21.56%
HK:9898
Weibo Corp Class A
75.70
24.42
47.62%
HK:1896
Maoyan Entertainment
7.70
0.53
7.39%
HK:2390
Zhihu, Inc. Class A
11.28
3.11
38.07%

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.

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