Digital Hollywood Interactive Limited (2022) AI Stock Analysis

• Market Cap: HK$100.25M
• Dividend Yield: N/A
• Average Volume (3M): 320.53K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.53
• Revenue Growth: -5.90%
• EPS Growth: 60.75%
• Country: HK
• Employees: 107
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): >-0.01
• Shares Outstanding: 2,000,000,000
• 10 Day Avg. Volume: 142,000
• 30 Day Avg. Volume: 320,533
• PEG Ratio: 0.09
• Price to Book (P/B): 0.50
• Price to Sales (P/S): 1.38
• P/FCF Ratio: -5.17
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 45 Neutral
• Price Target: HK$0.06 ▼(-5.00% Downside)

The overall stock score is primarily influenced by the company's weak financial performance and valuation metrics. Despite a short-term bullish technical trend, the negative P/E ratio and lack of dividend yield highlight significant risks. The absence of earnings call insights and corporate events further limits the potential for positive revaluation.

Positive Factors

Cash Position

A strong cash position relative to debt provides financial flexibility and reduces the risk of insolvency, allowing the company to navigate operational challenges.

Gross Profit Margin

A stable gross profit margin indicates the company can maintain its pricing power and cost control, essential for long-term profitability despite revenue declines.

Leverage Levels

Low leverage levels reduce financial risk and interest burden, providing the company with more room to maneuver financially and invest in growth opportunities.

Negative Factors

Revenue Decline

Continued revenue decline reflects challenges in market competition or product appeal, which could hinder long-term growth and market position.

Net Losses

Persistent net losses and negative margins indicate operational inefficiencies, threatening the company's ability to achieve profitability and sustainable growth.

Cash Flow Issues

Inconsistent and negative cash flow from operations limits the company's ability to invest in growth and may necessitate external financing, increasing financial risk.

Digital Hollywood Interactive Limited Business Overview & Revenue Model

Company Description

Digital Hollywood Interactive Limited, an investment holding company, publishes online games for China-based game developers in North America, Europe, the People's Republic of China, and internationally. The company develops, operates, and publishes various games comprising casual games, and mid-and hardcore games in web and mobile formats to various demographic user communities; and provides game redesign, optimization, marketing, distribution, monetization, payment support, and other user-related services. It also offers marketing and technical support services. The company was founded in 2010 and is headquartered in Guangzhou, China.

How the Company Makes Money

Digital Hollywood Interactive Limited generates revenue through multiple streams. Primarily, the company earns money from the sale of its mobile games and interactive applications, which are available for purchase or free download with in-app purchases. These in-app purchases can include game upgrades, additional content, and virtual goods. Additionally, the company partners with brands for sponsored content and promotional collaborations within its games, providing another source of income. Subscription models for premium content and exclusive access to new game features also contribute to revenue. Furthermore, strategic partnerships with distribution platforms and licensing agreements play a significant role in expanding the company’s reach and boosting earnings.

Digital Hollywood Interactive Limited Financial Statement Overview

Summary

Digital Hollywood Interactive Limited is facing significant financial challenges with declining revenues, persistent net losses, and inconsistent cash flows. Although the company maintains a strong cash position relative to debt, ongoing operational inefficiencies and shrinking equity highlight risks to financial stability.

Income Statement

The company has experienced declining revenues over recent years, with revenue dropping from 17.9 million in 2019 to 9.1 million in 2024. Profitability metrics such as the gross profit margin remain around 45%, but consistent net losses and negative EBIT and EBITDA margins highlight ongoing financial struggles. Revenue growth is negative, indicating a challenging environment for top-line expansion.

Balance Sheet

The balance sheet shows a strong cash position, with cash consistently exceeding total debt, resulting in negative net debt. However, the stockholders' equity has decreased over time, indicating potential erosion of value. The debt-to-equity ratio remains low, suggesting manageable leverage levels. Despite the asset base contraction, the equity ratio is relatively stable.

Cash Flow

Cash flow analysis reveals inconsistent operating cash flow, with recent years showing negative free cash flow. The company struggles to generate cash from operations, which affects its ability to invest and sustain operations without external financing. The free cash flow to net income ratio is weak, reflecting operational inefficiencies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.12M	9.06M	9.91M	11.14M	12.75M	17.55M
Gross Profit	4.29M	4.14M	4.10M	4.66M	5.41M	9.16M
EBITDA	-2.43M	-2.87M	-4.90M	-5.04M	-2.05M	-2.17M
Net Income	-2.00M	-3.21M	-5.77M	-5.86M	-3.37M	-3.64M
Balance Sheet
Total Assets	31.71M	32.81M	37.96M	44.30M	52.00M	56.27M
Cash, Cash Equivalents and Short-Term Investments	17.83M	19.08M	22.26M	25.03M	32.68M	31.91M
Total Debt	464.10K	640.82K	1.02M	1.27M	1.72M	1.92M
Total Liabilities	7.35M	7.77M	9.78M	10.00M	10.81M	11.17M
Stockholders Equity	24.37M	25.04M	28.18M	34.30M	41.19M	45.11M
Cash Flow
Free Cash Flow	-1.70M	-2.41M	-2.53M	-3.08M	1.83M	6.51M
Operating Cash Flow	-1.70M	-70.68K	-2.47M	-2.96M	1.84M	6.56M
Investing Cash Flow	-1.13M	-2.53M	-63.65K	-2.78M	3.52M	-5.05M
Financing Cash Flow	0.00	-359.96K	-332.45K	-325.95K	-308.04K	-318.11K

Digital Hollywood Interactive Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2022, the sentiment is Negative. The current price of 0.06 is above the 20-day moving average (MA) of 0.06, above the 50-day MA of 0.06, and above the 200-day MA of 0.05, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 27.15 is Positive, neither overbought nor oversold. The STOCH value of 19.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2022.

Digital Hollywood Interactive Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6860	60 Neutral	HK$368.19M	12.07	3.47%	―	-25.66%	-23.36%
2022	45 Neutral	HK$100.25M	―	-7.87%	―	-5.90%	60.75%
8267	45 Neutral	HK$177.36M	-30.57	-2.00%	―	20.90%	70.71%
0484	44 Neutral	€134.68M	-1.38	-15.08%	―	65.41%	-313.74%
8282	44 Neutral	HK$38.76M	-98.55	-1.54%	―	8.14%	99.25%
6933	29 Underperform	HK$141.24M	-4.86	-28.25%	―	-3.02%	72.76%

Digital Hollywood Interactive Limited Corporate Events

Digital Hollywood Interactive Forms Strategic Joint Venture for Game Development

Digital Hollywood Interactive Limited has announced a supplemental disclosure regarding the formation of a joint venture company with an 80:20 ownership structure. This venture aims to co-develop games based on intellectual property rights associated with Chinese action movies and modern romance dramas. The company sees this partnership as a strategic move to enhance its future earning capacity and growth potential by leveraging its partner’s IP rights. Reserved matters in the joint venture require a supermajority board approval, ensuring significant decisions are carefully managed. The joint venture partner is wholly owned by The Sir Run Run Shaw Charitable Trust.

Digital Hollywood Interactive Updates Share Option Scheme Details

Digital Hollywood Interactive Limited has issued a supplemental announcement regarding its 2024 Annual Report, specifically providing additional details about its Post-IPO Share Option Scheme. The announcement clarifies the acceptance process for the share options, stating that an option is considered accepted when the grantee signs the acceptance letter and pays a non-refundable RMB1.00 consideration. This update does not affect any other information in the 2024 Annual Report.

Digital Hollywood Interactive Forms Joint Venture for Game Development

Digital Hollywood Interactive Limited announced the formation of a joint venture company with a share capital of HK$28.5 million, in collaboration with a JV Partner. Hollywood HK, a subsidiary of the company, will hold an 80% stake in the new venture, which will focus on game products development. This strategic move aims to enhance the company’s position in the gaming industry by leveraging the JV Partner’s intellectual property rights. The joint venture will be consolidated into the company’s financial statements, reflecting its impact on the company’s operations and market positioning.