Digital China Holdings (0861) AI Stock Analysis

• Market Cap: $4.30B
• Dividend Yield: 2.39%
• Average Volume (3M): 9.02M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.35
• Revenue Growth: -6.07%
• EPS Growth: 86.55%
• Country: HK
• Employees: 19,268
• Sector: Industrials
• Sector Strength: 72
• Industry: Information Technology Services
• EPS (TTM): 0.01
• Shares Outstanding: 1,673,607,400
• 10 Day Avg. Volume: 6,291,478
• 30 Day Avg. Volume: 9,022,346
• PEG Ratio: 0.21
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 0.27
• P/FCF Ratio: 12.97
• Enterprise Value/Market Cap: 2.74
• Enterprise Value/Revenue: 0.62
• Enterprise Value/Gross Profit: 4.59
• Enterprise Value/Ebitda: 70.02
• 1Y Price Target: $4.19
• Price Target Upside: 43.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 43 Neutral
• Price Target: HK$3.00 ▲(2.39% Upside)

Digital China Holdings faces significant financial challenges, with declining revenues and severe cash flow issues being the most impactful factors. The technical analysis indicates a bearish trend, and the valuation is poor due to a negative P/E ratio, despite a moderate dividend yield. These factors collectively result in a low overall stock score.

Digital China Holdings Business Overview & Revenue Model

Company Description

Digital China Holdings Limited is a leading information technology services provider in China, specializing in digital transformation solutions. The company operates primarily in sectors such as cloud computing, big data, and IT services, offering a wide range of products and services including IT infrastructure, software development, and system integration. Digital China is committed to driving digital innovation across various industries, leveraging its extensive technology portfolio to enhance operational efficiency and customer experience.

How the Company Makes Money

Digital China generates revenue through multiple channels, primarily by providing IT services and solutions to businesses and government entities. Key revenue streams include cloud services, where the company offers infrastructure as a service (IaaS) and platform as a service (PaaS) solutions, as well as software licensing and maintenance services. Additionally, the company earns income from system integration projects, which involve customizing IT solutions for clients. Strategic partnerships with major technology firms and investments in emerging technologies further bolster its earnings potential, enabling the company to tap into new markets and enhance its service offerings.

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

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

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

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	19.00B	17.72B	20.20B	20.64B	20.54B	19.82B
Gross Profit	2.56B	2.44B	2.87B	2.94B	3.76B	3.36B
EBITDA	167.86M	114.45M	-843.71M	668.63M	1.71B	1.72B
Net Income	-271.02M	-270.22M	-2.02B	360.92M	711.59M	612.97M
Balance Sheet
Total Assets	25.39B	23.74B	25.10B	24.77B	29.60B	28.02B
Cash, Cash Equivalents and Short-Term Investments	2.39B	3.54B	3.20B	3.26B	4.61B	4.20B
Total Debt	5.50B	3.81B	3.40B	3.74B	4.24B	4.51B
Total Liabilities	15.13B	13.62B	13.67B	12.46B	14.73B	14.26B
Stockholders Equity	6.32B	5.83B	6.93B	8.36B	10.16B	9.43B
Cash Flow
Free Cash Flow	341.72M	375.80M	587.13M	432.03M	393.71M	1.02B
Operating Cash Flow	375.14M	405.53M	746.14M	525.56M	540.70M	1.15B
Investing Cash Flow	79.10M	-223.02M	334.18M	-47.88M	20.37M	1.51B
Financing Cash Flow	652.89M	-60.38M	-678.68M	-249.29M	-926.23M	-1.54B

Digital China Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.93
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0861, the sentiment is Negative. The current price of 2.93 is below the 20-day moving average (MA) of 3.01, below the 50-day MA of 3.11, and below the 200-day MA of 3.00, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 43.54 is Neutral, neither overbought nor oversold. The STOCH value of 42.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0861.

Digital China Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0046	―	HK$393.14M	13.34	5.83%	6.67%	-1.26%	-10.80%
1522	―	HK$786.43M	4.30	6.75%	6.40%	7.39%	2.23%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
0354	―	$15.44B	24.38	4.70%	0.89%	5.43%	-6.88%
1985	―	HK$438.00M	48.50	4.04%	7.25%	20.83%	-75.45%
0861	―	$4.30B	―	-4.20%	2.39%	-6.07%	86.55%
3680	―	HK$1.80B	651.43	4.78%	―	-25.92%	―

Digital China Holdings Corporate Events

Digital China Holdings to Discuss Interim Results in Investor Conference

Digital China Holdings Limited announced that it will hold an investor conference on September 5, 2025, to discuss its interim financial results for the first half of the year. The teleconference aims to provide stakeholders with insights into the company’s performance and strategic direction, potentially impacting its market positioning and investor relations.

The most recent analyst rating on (HK:0861) stock is a Buy with a HK$4.29 price target. To see the full list of analyst forecasts on Digital China Holdings stock, see the HK:0861 Stock Forecast page.

Digital China Holdings Reports Strong Interim Revenue Growth in 2025

Digital China Holdings Limited announced its unaudited interim results for the first half of 2025, reporting a 12.13% increase in revenue compared to the same period in 2024, reaching RMB 7.87 billion. The company’s profit attributable to equity holders rose by 40.70%, indicating strong financial performance despite a reported overall loss for the period. The results highlight the company’s growth in big data products and solutions, which maintained an 18% share of total revenue, underscoring its strategic focus on this sector.

The most recent analyst rating on (HK:0861) stock is a Buy with a HK$4.29 price target. To see the full list of analyst forecasts on Digital China Holdings stock, see the HK:0861 Stock Forecast page.

Digital China Holdings Changes Hong Kong Share Registrar

Digital China Holdings Limited has announced a change in its branch share registrar and transfer office in Hong Kong, effective from August 31, 2025. The new registrar will be Tricor Investor Services Limited, and all applications for the registration of share transfers should be directed to them from this date. This change is part of the company’s ongoing efforts to streamline its operations and enhance shareholder services.

The most recent analyst rating on (HK:0861) stock is a Buy with a HK$4.29 price target. To see the full list of analyst forecasts on Digital China Holdings stock, see the HK:0861 Stock Forecast page.

Digital China Holdings Announces Board Meeting to Review Interim Results

Digital China Holdings Limited has announced an upcoming board meeting scheduled for August 27, 2025, to review and approve the unaudited consolidated interim results for the first half of the year and to consider the payment of an interim dividend. This meeting could potentially impact the company’s financial strategy and shareholder returns, reflecting its operational performance and future outlook.

The most recent analyst rating on (HK:0861) stock is a Buy with a HK$4.29 price target. To see the full list of analyst forecasts on Digital China Holdings stock, see the HK:0861 Stock Forecast page.