Lianlian DigiTech Co., Ltd. Class H (2598) AI Stock Analysis

• Market Cap: HK$7.22B
• Dividend Yield: N/A
• Average Volume (3M): 2.14M
• Price to Earnings (P/E): 3.8
• Beta (1Y): 0.30
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: HK
• Employees: 1,103
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 1.52
• Shares Outstanding: 460,058,780
• 10 Day Avg. Volume: 1,334,695
• 30 Day Avg. Volume: 2,142,479
• PEG Ratio: 0.74
• Price to Book (P/B): 7.63
• Price to Sales (P/S): 7.13
• P/FCF Ratio: -74.79
• 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: HK$10.00
• Price Target Upside: 25.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 10.33
• Revenue Forecast (FY): HK$12.81B

• Rating: 58 Neutral
• Price Target: HK$7.50 ▼(-6.13% Downside)

The overall stock score reflects a mixed financial performance with strong revenue growth but liquidity concerns. The technical analysis indicates a bearish trend, while the low P/E ratio suggests potential undervaluation. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Revenue Growth

Consistent revenue growth at 5.92% indicates a healthy upward trend, reflecting strong market demand and effective business strategies.

Balance Sheet Strength

A low debt-to-equity ratio of 0.13 suggests financial stability and low leverage, providing flexibility for future investments and growth.

Return on Equity

A high return on equity of 88.23% indicates efficient use of equity to generate profits, showcasing strong management performance and profitability.

Negative Factors

Cash Flow Challenges

Negative cash flows suggest liquidity challenges, potentially limiting the company's ability to fund operations and invest in growth opportunities.

Profit Margin Concerns

An unusually high net profit margin of 114.43% may indicate one-time gains or accounting issues, raising concerns about the sustainability of profits.

Operational Efficiency

Low EBIT and EBITDA margins suggest operational inefficiencies, which could impact long-term profitability and competitiveness in the market.

Lianlian DigiTech Co., Ltd. Class H Business Overview & Revenue Model

Company Description

Lianlian DigiTech Co., Ltd., together with its subsidiaries, provides digital payment services and value-added services to merchants and enterprises in China. It also provides property rental and management, micro-loan, and factoring services, as well as digital marketing, operation support, and referral services; and e-wallet, software development, and information technology services. The company was incorporated in 2009 and is based in Hangzhou, China.

How the Company Makes Money

Lianlian DigiTech generates revenue primarily through transaction fees charged on its digital payment services and mobile wallet transactions. Additionally, the company earns income from subscription fees for premium services offered to businesses, which include advanced analytics and integration solutions. Partnerships with financial institutions and e-commerce platforms further bolster revenue streams, as Lianlian facilitates seamless payment processing for these partners. The company may also explore additional revenue opportunities through value-added services such as marketing tools and financial advisory services.

Lianlian DigiTech Co., Ltd. Class H Financial Statement Overview

Summary

Lianlian DigiTech Co., Ltd. shows a mixed financial performance. The income statement reflects strong revenue growth but raises concerns with unusually high net profit margins. The balance sheet is solid with low leverage and high return on equity, suggesting financial stability. However, the cash flow statement indicates potential liquidity challenges, with negative cash flows and declining free cash flow growth. Overall, while the company demonstrates growth and stability in some areas, cash flow management remains a critical area for improvement.

Income Statement

The company shows a positive revenue growth rate of 5.92% in the TTM period, indicating a healthy upward trend. However, the net profit margin is exceptionally high at 114.43%, which may suggest potential accounting anomalies or one-time gains. The gross profit margin remains stable at around 51.6%, but the EBIT and EBITDA margins are relatively low, indicating potential inefficiencies in operations.

Balance Sheet

The balance sheet reflects a strong equity position with a low debt-to-equity ratio of 0.13 in the TTM period, indicating low financial leverage. The return on equity is notably high at 88.23%, suggesting effective use of equity to generate profits. However, the equity ratio is not explicitly calculated, but the overall asset base appears robust.

Cash Flow

The cash flow statement reveals challenges, with negative operating and free cash flows in the TTM period, indicating potential liquidity issues. The free cash flow growth rate is negative, and the operating cash flow to net income ratio is also negative, suggesting difficulties in converting income into cash. Despite these issues, the free cash flow to net income ratio is positive, indicating some level of cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.48B	1.31B	1.03B	742.75M	643.64M	588.50M
Gross Profit	763.82M	682.52M	577.35M	465.97M	444.23M	381.88M
EBITDA	44.32M	-433.03M	-607.38M	-118.74M	-63.53M	-58.64M
Net Income	1.69B	-168.22M	-656.06M	-916.54M	-746.59M	-368.16M
Balance Sheet
Total Assets	19.15B	14.54B	10.47B	10.15B	8.48B	9.22B
Cash, Cash Equivalents and Short-Term Investments	1.84B	13.41B	10.53B	9.09B	1.06B	1.65B
Total Debt	348.13M	506.77M	455.02M	278.20M	21.94M	15.58M
Total Liabilities	16.53B	13.30B	9.87B	9.09B	6.56B	6.64B
Stockholders Equity	2.61B	1.23B	589.30M	1.06B	1.92B	2.58B
Cash Flow
Free Cash Flow	-39.55M	-125.30M	89.84M	2.59B	-120.00M	3.42B
Operating Cash Flow	-29.31M	-111.06M	94.65M	2.61B	-93.25M	3.43B
Investing Cash Flow	1.48B	-131.03M	-201.80M	-941.07M	-528.25M	-367.91M
Financing Cash Flow	-467.77M	569.13M	149.18M	242.59M	-6.26M	1.30B

Lianlian DigiTech Co., Ltd. Class H Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2598, the sentiment is Negative. The current price of 7.99 is above the 20-day moving average (MA) of 6.51, above the 50-day MA of 7.40, and below the 200-day MA of 8.90, indicating a bearish trend. The MACD of -0.32 indicates Negative momentum. The RSI at 40.01 is Neutral, neither overbought nor oversold. The STOCH value of 44.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2598.

Lianlian DigiTech Co., Ltd. Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6608	73 Outperform	HK$8.14B	14.88	7.02%	―	16.43%	17.05%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
2598	58 Neutral	HK$7.22B	3.81	94.40%	―	―	―
9923	58 Neutral	HK$3.73B	33.49	3.35%	―	-9.32%	477.27%
0818	54 Neutral	HK$1.35B	9.34	1.98%	―	-17.23%	-6.20%
6682	43 Neutral	HK$22.20B	-103.04	-3.20%	―	―	―
9959	41 Neutral	HK$4.98B	-4.56	-12.22%	―	11.43%	-94.89%

Lianlian DigiTech Co., Ltd. Class H Corporate Events

Lianlian DigiTech Announces Leadership Restructuring

Lianlian DigiTech Co., Ltd. has announced significant changes in its leadership structure, appointing Mr. Shen Enguang and Mr. Sun Dali as co-presidents effective November 11, 2025. This move is expected to enhance the company’s strategic planning and operational management. Additionally, the company has proposed the resignation of its current CEO, Mr. Xin Jie, due to personal reasons, with Mr. Zhang Zhengyu, the Chairman of the Board, recommended to take over the CEO role in March 2026. These leadership changes are aimed at strengthening the company’s management team and aligning its strategic goals.

Lianlian DigiTech Announces H Share Repurchase Plan

Lianlian DigiTech Co., Ltd. has announced its intention to repurchase its H Shares on the open market under a general mandate granted by its shareholders. The board believes that the current share price does not reflect the company’s intrinsic value and sees the repurchase as beneficial for shareholders, indicating confidence in the company’s long-term growth prospects. The repurchase plan will be funded by internal resources and is subject to market conditions and regulatory compliance.