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Digital China Holdings Limited (HK:0861)
:0861

Digital China Holdings (0861) AI Stock Analysis

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HK

Digital China Holdings

(OTC:0861)

Rating:43Neutral
Price Target:
Digital China Holdings is currently facing significant financial and operational challenges. The company's financial performance is under pressure due to declining revenues, negative profit margins, and liquidity issues. Technical indicators show bearish trends, suggesting potential further downside. Valuation metrics add to the concerns with a negative P/E ratio, despite a modest dividend yield. Overall, these factors contribute to a low stock score, reflecting substantial risks in the current environment.

Digital China Holdings (0861) vs. iShares MSCI Hong Kong ETF (EWH)

Digital China Holdings Business Overview & Revenue Model

Company DescriptionDigital China Holdings Limited, an investment holding company, provides big data products and solutions for government and enterprise customers primarily in Mainland China. The Big Data Products and Solutions segment sells data software products focused on spatial-temporal big data and artificial intelligence. This segment offers data fabric comprising Yan Cloud DaaS, a software platform that supports data sharing, interoperability, and integration of isolated digital islands; and Sysnet, an integration platform that integrates various data, applications, and services. It also provides data hub, including data management, security, innovation, and aggregation products; and digital twin, which constructs a digital replica of the physical city, as well as data solutions for city and supply chain digital native transformation, and fintech. The Software and Operating Services segment offers end-to-end data-enabled supply chain operating services, as well as software development, testing, operation, and maintenance services. The Traditional Services segment provides systems integration services, e-commerce supply chain services, and software and operating services. The segment also engages in the investments, property sales and rental, and other businesses. It also engages in provision of logistics, systems integration, technical, network optimization, rural agricultural internet, data processing and manpower outsourcing, and cloud application system services; development and construction of science and technology park; finance lease and property development business; operation of sm@rt city platform; and sale of financial specialized equipment and surveying service software. In addition, the company offers Quattro, a touchless multi-biometric access control reader; and Aibion Trio, a contactless multi-biometric access control solution. Digital China Holdings Limited was incorporated in 2000 and is headquartered in Wan Chai, Hong Kong.
How the Company Makes MoneyDigital China Holdings generates revenue through multiple streams, primarily by offering IT services and solutions. The company earns money by providing system integration services, where it designs and implements IT systems tailored to client needs. Additionally, it offers managed services, which include outsourcing IT functions and providing ongoing support for IT infrastructure and applications. Cloud computing services, such as cloud storage and cloud-based software solutions, also contribute significantly to its earnings. The company has strategic partnerships with major technology firms, enabling it to offer a wide array of cutting-edge digital solutions. Revenue is further bolstered by the sale and distribution of IT products and software licenses.

Digital China Holdings Financial Statement Overview

Summary
Overall, Digital China Holdings is facing financial challenges, marked by declining revenues, negative profit margins, and a concerning lack of cash flow in 2024. The balance sheet remains relatively stable, but the company's ability to generate returns and maintain liquidity is under significant pressure.
Income Statement
45
Neutral
Digital China Holdings has experienced declining revenues, with a negative revenue growth rate from 2023 to 2024. The gross profit margin for 2024 is approximately 13.76%, which is lower compared to prior years. The company posted a net loss in 2024, resulting in a negative net profit margin. There is a significant decline in EBIT and EBITDA margins, indicating challenges in maintaining operational efficiency.
Balance Sheet
55
Neutral
The company's debt-to-equity ratio is relatively stable, but there is an increasing trend in total debt over the years. The equity ratio for 2024 stands at approximately 26.13%, reflecting a moderate level of equity financing. However, the return on equity is negative due to the net loss, indicating inefficiency in generating returns for shareholders.
Cash Flow
30
Negative
The absence of operating and free cash flow in 2024 highlights severe cash flow management issues. The company previously had positive free cash flow growth, but this has deteriorated significantly. The lack of cash flow metrics for 2024 suggests potential liquidity concerns.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
17.72B20.20B17.75B20.54B19.82B
Gross Profit
2.44B3.04B2.94B3.76B3.36B
EBIT
365.86M-106.49M583.15M1.20B297.18M
EBITDA
114.45M-843.71M856.79M1.71B1.72B
Net Income Common Stockholders
-270.22M-2.02B466.50M973.67M965.35M
Balance SheetCash, Cash Equivalents and Short-Term Investments
3.54B4.18B3.26B3.85B4.20B
Total Assets
23.74B25.10B24.77B29.60B28.02B
Total Debt
3.81B3.40B3.74B4.19B4.51B
Net Debt
461.81M518.38M1.22B1.41B1.44B
Total Liabilities
13.62B13.67B12.46B14.73B14.26B
Stockholders Equity
5.83B6.93B8.36B10.16B9.43B
Cash FlowFree Cash Flow
0.00587.13M432.03M393.71M1.02B
Operating Cash Flow
0.00746.14M525.56M540.70M1.15B
Investing Cash Flow
0.00334.18M-47.88M20.37M1.51B
Financing Cash Flow
0.00-759.22M-249.29M-926.23M-1.54B

Digital China Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price3.20
Price Trends
50DMA
2.71
Positive
100DMA
2.95
Positive
200DMA
3.06
Positive
Market Momentum
MACD
0.15
Negative
RSI
69.70
Neutral
STOCH
75.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0861, the sentiment is Positive. The current price of 3.2 is above the 20-day moving average (MA) of 2.86, above the 50-day MA of 2.71, and above the 200-day MA of 3.06, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 69.70 is Neutral, neither overbought nor oversold. The STOCH value of 75.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0861.

Digital China Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
HK$660.60M3.946.11%7.94%1.20%-3.85%
71
Outperform
HK$349.46M12.055.78%7.64%1.39%-11.89%
68
Neutral
HK$429.00M11.0919.22%3.15%32.84%36.36%
62
Neutral
$11.81B10.34-7.44%2.91%7.41%-7.93%
43
Neutral
$4.84B-4.20%2.44%-10.06%86.09%
$1.74B23.134.43%1.06%
39
Underperform
HK$703.87M-127.76%1.50%43.09%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0861
Digital China Holdings
3.29
>-0.01
-0.27%
CFTLF
Chinasoft International
0.64
0.18
39.13%
HK:1522
BII Railway Transportation Technology Holdings Co., Ltd.
0.32
0.03
10.34%
HK:1985
Microware Group Ltd.
1.43
0.24
20.17%
HK:3680
Suoxinda Holdings Limited
0.89
-0.35
-28.23%
HK:0046
Computer & Technologies Holdings Ltd.
1.44
-0.55
-27.64%

Digital China Holdings Corporate Events

Digital China Reports Q1 2025 Financial Results and Advances FinTech Strategy
Apr 25, 2025

Digital China Information Service Group Company Ltd. reported a net loss of RMB 92.94 million for the first quarter of 2025, despite achieving operating revenues of RMB 2.160 billion. The company continues to advance its FinTech strategy, securing significant contracts in financial software services and expanding its presence in the finance sector. Key projects include the development of core banking systems and treasury solutions for various banks, as well as advancements in artificial intelligence applications for financial processes. These efforts aim to enhance operational efficiency and expand market reach, positioning the company as a leader in digital financial solutions.

Digital China Holdings Announces Annual General Meeting Agenda
Apr 25, 2025

Digital China Holdings Limited has announced its upcoming annual general meeting, scheduled for June 27, 2025, at the Conrad Hong Kong. Key agenda items include the adoption of the company’s financial statements for the year ending December 31, 2024, the declaration of a final dividend, re-election of several directors, and the re-appointment of SHINEWING (HK) CPA Limited as auditors. Additionally, the meeting will consider resolutions related to the issuance and management of company shares, which could impact the company’s capital structure and shareholder value.

Digital China Holdings Releases 2024 Annual Results
Apr 2, 2025

Digital China Holdings Limited announced the release of its annual results for the year ended December 31, 2024, during an investor conference held via teleconference on April 2, 2025. The results presentation, which is available on the company’s website, reflects the company’s ongoing commitment to transparency and communication with stakeholders, potentially impacting its market positioning and investor relations positively.

Digital China Holdings Reports 2024 Financial Results with Reduced Losses
Mar 28, 2025

Digital China Holdings Limited announced its annual financial results for the year ended December 31, 2024, reporting a revenue decline of 8.86% compared to the previous year. Despite the overall revenue drop, the company saw growth in its big data and software segments, and significantly reduced its losses attributable to equity holders by 86.15%. The board has recommended a final dividend of HK6.0 cents per share, reflecting a total dividend of HK7.0 cents per share for the year.

Digital China Holdings Declares Final Dividend for 2024
Mar 28, 2025

Digital China Holdings Limited has announced a final cash dividend of HKD 0.06 per share for the financial year ending December 31, 2024. This announcement, dated March 28, 2025, signifies the company’s stable financial performance and commitment to delivering shareholder value. The dividend will be paid on July 16, 2025, following shareholder approval on June 27, 2025, and the ex-dividend date is set for July 3, 2025. This move is likely to reinforce investor confidence and bolster the company’s standing in the market.

Digital China Holdings Projects Reduced Losses for 2024
Mar 20, 2025

Digital China Holdings Limited announced a significant reduction in its expected loss for the year ending December 31, 2024, projecting a loss between RMB 240 million and RMB 300 million, compared to a loss of approximately RMB 1,834 million in the previous year. This improvement is attributed to a decrease in share of losses from associates and joint ventures, as well as a reduction in impairment losses on wealth management products and investment properties. The announcement highlights the ongoing challenges faced by the company, including losses from its subsidiary, Digital China Information Service Company Ltd., which is expected to report a loss for the year. The final financial results are still being prepared and will be disclosed in the company’s annual results announcement at the end of March 2025.

Digital China Holdings Schedules Board Meeting to Approve Annual Results
Mar 18, 2025

Digital China Holdings Limited has announced that its board of directors will meet on March 28, 2025, to review and approve the audited annual results for the year ending December 31, 2024. The meeting will also consider recommending a final dividend, reflecting the company’s ongoing commitment to shareholder returns.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.