Digital Hollywood Interactive Limited (2022) AI Stock Analysis

• Market Cap: HK$98.40M
• Dividend Yield: N/A
• Average Volume (3M): 335.47K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.55
• 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: 207,600
• 30 Day Avg. Volume: 335,466
• 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: 42 Neutral
• Price Target: HK$0.05 ▼(-13.33% Downside)

The score is primarily weighed down by weak financial performance (declining revenue, ongoing losses, and poor cash generation). Technicals add a mildly negative bias due to weak momentum, while valuation is also constrained by loss-making earnings and no dividend support.

Positive Factors

Diversified revenue model across games, subscriptions, and partnerships

A multi-pronged monetization model (direct sales, IAP, subscriptions, sponsorships and licensing) supports recurring and varied revenue levers. This diversity reduces reliance on a single product lifecycle and enhances resiliency as the company scales its interactive content portfolio over months to years.

Net-cash balance sheet reduces solvency risk

A net-cash position gives the company durable financial flexibility: it can fund development, absorb shocks, and pursue partnerships or licensing without immediate external financing. This structural strength reduces short- and medium-term solvency risk and supports strategic investment.

Healthy gross margins around 45%

Sustained gross margins near 45% indicate product-level profitability potential in its digital offerings. If managed with disciplined operating cost control, these margins provide room to invest in content and user acquisition while maintaining pathway to improved operating leverage over the medium term.

Negative Factors

Multi-year revenue decline

A prolonged top-line contraction weakens market position and limits resources for content investment. Continued revenue erosion undermines scale advantages in user acquisition and platform partnerships, making recovery and profitable growth more challenging over the coming 2–6 months without structural changes.

Persistent net losses and negative operating margins

Ongoing net losses and negative EBIT/EBITDA signal that the core business is not yet sustainably profitable. This long-running unprofitability constrains reinvestment capacity, increases reliance on external funding for growth, and raises execution risk for long-term margin improvement.

Weak and inconsistent operating/free cash flow

Negative and inconsistent cash generation limits the firm's ability to fund development cycles, marketing, and partnerships internally. Poor free cash flow increases dependency on financing and can delay critical product roadmaps, hampering sustainable growth and competitive positioning over months.

Digital Hollywood Interactive Limited Business Overview & Revenue Model

Company Description

Digital Hollywood Interactive Limited is a technology-driven company specializing in interactive digital media and entertainment solutions. Founded in 2022, the company operates primarily within the gaming and entertainment sectors, focusing on the development of innovative software applications, mobile games, and interactive content that enhance user engagement. By leveraging cutting-edge technology, Digital Hollywood Interactive aims to create immersive experiences for consumers across various platforms, including mobile devices, consoles, and virtual reality environments.

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: Neutral
• 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 0.05, above the 50-day MA of 0.05, and above the 200-day MA of 0.06, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 44.61 is Neutral, neither overbought nor oversold. The STOCH value of 7.50 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
6860	66 Neutral	HK$379.34M	12.44	3.47%	―	-25.66%	-23.36%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6933	53 Neutral	HK$295.32M	-10.16	-28.25%	―	-3.02%	72.76%
8267	46 Neutral	HK$134.86M	-23.25	-2.00%	―	20.90%	70.71%
0484	44 Neutral	HK$144.78M	-1.49	-15.08%	―	65.41%	-313.74%
8282	44 Neutral	HK$39.33M	-100.00	-1.54%	―	8.14%	99.25%
2022	42 Neutral	HK$98.40M	-6.31	-7.87%	―	-5.90%	60.75%

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.