China Information Technology Development (8178) AI Stock Analysis

• Market Cap: HK$28.68M
• Dividend Yield: N/A
• Average Volume (3M): 1.71M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.62
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: HK
• Employees: 70
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): N/A
• Shares Outstanding: 114,739,700
• 10 Day Avg. Volume: 923,275
• 30 Day Avg. Volume: 1,711,241
• PEG Ratio: -0.10
• Price to Book (P/B): 0.92
• Price to Sales (P/S): 5.64
• P/FCF Ratio: 2.57K
• 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: 37 Underperform
• Price Target: HK$0.23 ▼(-10.77% Downside)

The overall stock score reflects significant financial and technical challenges. The company's declining revenues, persistent losses, and negative cash flow are major concerns. Additionally, technical indicators point to a bearish trend, and the lack of earnings and dividend yield further weaken the stock's attractiveness.

Positive Factors

Strong equity base

A ~78% equity ratio provides a durable solvency buffer against operating shocks, reducing bankruptcy risk and supporting multi-month funding of projects. This strong capital base gives management flexibility to pursue strategic partnerships or absorb further short-term losses without immediate distress.

Improving operating cash flow

Rising operating cash flow and a positive OCF-to-net-income ratio signal better core cash generation, which is more sustainable than accounting profits. Durable cash improvement supports working capital, project execution and limited reinvestment without immediate external financing, if trends persist.

High gross margin

A 54% gross margin indicates the business retains substantial value over direct costs, reflecting pricing power or low variable costs in services/software. If management can control operating expenses, this structural margin provides a clear path toward restoring operating profitability as revenues stabilize or grow.

Negative Factors

Declining revenue

A 15.7% year-over-year revenue decline is a material structural headwind that reduces operating leverage and makes fixed-cost recovery harder. Sustained top-line weakness erodes scale benefits, constrains margin improvement prospects and lengthens the timeline to achieve consistent profitability.

Severe net losses

Deep negative net margin (~-90.7%) and negative EBIT/EBITDA indicate fundamental unprofitability, signaling structural issues in cost base or pricing. Persistent heavy losses deplete retained earnings, impair reinvestment capacity, and increase pressure for restructuring or external capital over the medium term.

Volatile and negative free cash flow

Volatile free cash flow and negative FCF-to-net-income show cash conversion is unreliable, raising liquidity and funding risk. Over several months this limits ability to invest in sales, R&D or large contracts, and increases dependence on financing or asset sales to sustain operations and support growth initiatives.

China Information Technology Development Business Overview & Revenue Model

Company Description

China Information Technology Development Limited, an investment holding company, provides software development, system integration, and technical support and maintenance services in the People's Republic of China. The company develops and sells computer software and hardware; and provides IT infrastructure solutions and maintenance, money lending, and securities trading services. It also offers office management services; big data application services; and asset acquisition, management, and consultancy services. The company was formerly known as Xteam Software International Limited. China Information Technology Development Limited was founded in 2001 and is headquartered in Kwun Tong, Hong Kong.

How the Company Makes Money

The company generates revenue primarily through service contracts for IT consulting, software development, and system integration projects. Key revenue streams include project-based fees, recurring maintenance and support services, and licensing of proprietary software solutions. Additionally, China Information Technology Development may engage in partnerships with other technology firms and government entities, allowing it to access larger contracts and projects, thereby contributing significantly to its earnings. The company also explores opportunities in emerging technologies such as cloud computing and big data analytics, which may provide additional revenue sources.

China Information Technology Development Financial Statement Overview

Summary

Weak fundamentals driven by declining revenue (-15.7% YoY) and very large losses (net margin -90.7%) with negative EBIT/EBITDA margins. Balance sheet shows a strong equity ratio (~78%) and slightly improved leverage, but negative ROE and volatile free cash flow keep overall financial quality low.

Income Statement

The company shows a declining revenue trend with a significant negative revenue growth rate of -15.7% from 2023 to 2024. Gross profit margin improved slightly to 54%, but the net profit margin remains deeply negative at -90.7% in 2024. EBIT and EBITDA margins are also negative, indicating continued operational challenges and a lack of profitability.

Balance Sheet

The debt-to-equity ratio has improved slightly, indicating reduced leverage, but remains a concern. The equity ratio is stable at around 78%, suggesting a strong equity base relative to total assets. However, the return on equity is negative due to continued net losses, reflecting inefficient use of shareholder funds.

Cash Flow

The company has shown improvement in operating cash flow, but free cash flow remains volatile. The operating cash flow to net income ratio is positive, indicating some improvement in cash generation, but free cash flow to net income remains negative, pointing to cash flow challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	42.26M	41.48M	49.23M	59.32M	66.09M	45.69M
Gross Profit	23.52M	22.40M	21.64M	17.40M	23.71M	16.42M
EBITDA	-11.51M	-32.10M	-13.32M	-70.97M	-73.83M	6.05M
Net Income	-85.57M	-37.63M	-22.75M	-82.30M	-90.42M	-9.76M
Balance Sheet
Total Assets	278.86M	327.90M	349.88M	468.78M	487.86M	560.07M
Cash, Cash Equivalents and Short-Term Investments	1.77M	5.69M	12.15M	15.27M	24.39M	35.02M
Total Debt	68.30M	62.29M	68.06M	141.88M	88.90M	107.99M
Total Liabilities	88.77M	82.90M	88.94M	192.59M	133.60M	144.48M
Stockholders Equity	200.98M	255.53M	270.76M	284.02M	358.86M	419.81M
Cash Flow
Free Cash Flow	-3.91M	91.00K	-20.04M	-6.95M	8.75M	1.70M
Operating Cash Flow	-3.85M	130.00K	-17.16M	-6.90M	8.85M	2.06M
Investing Cash Flow	107.00K	129.00K	6.03M	-51.69M	4.06M	20.00M
Financing Cash Flow	-12.14M	-8.21M	9.21M	65.60M	-14.29M	-18.29M

China Information Technology Development Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.26
• 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:8178, the sentiment is Negative. The current price of 0.26 is above the 20-day moving average (MA) of 0.26, below the 50-day MA of 0.27, and below the 200-day MA of 1.66, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 42.70 is Neutral, neither overbought nor oversold. The STOCH value of 36.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:8178.

China Information Technology Development Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8319	71 Outperform	HK$104.43M	8.44	7.12%	6.41%	3.21%	-12.00%
8033	66 Neutral	HK$78.86M	5.42	6.73%	7.87%	-1.57%	-18.62%
1147	64 Neutral	HK$335.37M	27.80	5.44%	1.49%	28.18%	47.50%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1460	61 Neutral	HK$241.34M	14.18	2.96%	3.33%	8.45%	-30.47%
8611	47 Neutral	HK$425.88M	-96.81	-57.46%	―	29.99%	-113.64%
8178	37 Underperform	HK$28.68M	-0.25	-37.29%	―	―	―