China Literature (0772) AI Stock Analysis

• Market Cap: $25.63B
• Dividend Yield: N/A
• Average Volume (3M): 4.05M
• Price to Earnings (P/E): 27.6
• Beta (1Y): 1.33
• Revenue Growth: 13.74%
• EPS Growth: -125.64%
• Country: HK
• Employees: 1,740
• Sector: Communication Services
• Sector Strength: 86
• Industry: Internet Content & Information
• EPS (TTM): -0.22
• Shares Outstanding: 1,025,028,100
• 10 Day Avg. Volume: 5,476,973
• 30 Day Avg. Volume: 4,050,364
• PEG Ratio: 1.96
• Price to Book (P/B): 1.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.91
• 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: $29.66
• Price Target Upside: 15.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 58 Neutral
• Price Target: HK$25.00 ▼( -2.72% Downside)

China Literature's strong cash flow and solid balance sheet are key strengths, reflecting financial stability despite the net loss. However, the stock faces challenges with a negative P/E ratio and bearish technical indicators, suggesting potential short-term weakness. Overall, the stock is moderately positioned but requires improvement in profitability to enhance its appeal.

China Literature Business Overview & Revenue Model

Company Description

China Literature Limited, an investment holding company, operates an online literature platform in the People's Republic of China. The company promotes intellectual properties primarily through its online literature platforms, such as QQ Reading and Qidian; and New Classics Media, a film and TV drama series production house. It is also involved in the self-operated channels business on partner distribution platforms. In addition, the company licenses the content to third-party partners for distribution, as well as offers online paid reading and content adaptations into various entertainment formats. Further, it provides reading, copyright commercialization, and writer cultivation and brokerage services; and operates text work reading and related open platform through technology methods and digital media, including personal computers, Internet, and mobile network. Additionally, the company engages in the production and distribution of television series, web series, and films; licensing and distribution of film and television properties; licensing copyrights; sale of physical books; and operation of in-house online games, etc. The company was founded in 2002 and is headquartered in Shanghai, the People's Republic of China. China Literature Limited is a subsidiary of Tencent Holdings Limited.

How the Company Makes Money

China Literature makes money through a multifaceted revenue model that includes online reading services, IP operations, and content licensing. The company generates revenue by offering premium content through subscriptions and pay-per-view models on its digital platforms. In addition, it monetizes its vast library of works by licensing content to third parties for adaptation into films, TV series, and games. Significant partnerships with media production companies enhance its IP development capabilities, further contributing to its revenue. Advertising services on its platforms also provide an additional income stream.

China Literature Financial Statement Overview

Summary

Income Statement

Balance Sheet

Cash Flow

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
7.92B	7.01B	7.63B	8.67B	8.53B	8.35B
	Gross Profit
3.85B	3.37B	4.03B	4.60B	4.23B	3.69B
	EBIT
852.81M	709.31M	1.42B	1.25B	966.43M	1.19B
	EBITDA
956.56M	1.22B	1.20B	1.75B	-2.62B	1.61B
	Net Income Common Stockholders
932.50M	804.88M	608.19M	1.85B	-4.50B	1.10B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
628.54M	6.28B	7.51B	7.21B	6.26B	6.35B
	Total Assets
6.38B	23.19B	22.73B	23.30B	21.32B	26.25B
	Total Debt
878.18M	238.10M	617.98M	1.45B	1.33B	1.39B
	Net Debt
547.09M	-2.56B	-4.93B	-3.08B	-1.52B	-4.54B
	Total Liabilities
1.92B	4.16B	4.78B	6.11B	6.22B	6.84B
	Stockholders Equity
4.38B	19.02B	17.96B	17.19B	15.09B	19.40B
Cash Flow		Free Cash Flow
2.10B	954.13M	1.25B	879.35M	821.95M	565.92M
	Operating Cash Flow
2.13B	1.13B	1.58B	1.12B	1.11B	782.50M
	Investing Cash Flow
-2.48B	-3.39B	528.10M	936.23M	-4.19B	-1.29B
	Financing Cash Flow
-107.68M	-510.82M	-1.15B	-349.99M	-92.34M	-1.93B

China Literature Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 25.70
• 50DMA: Positive
• 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:0772, the sentiment is Neutral. The current price of 25.7 is below the 20-day moving average (MA) of 26.29, below the 50-day MA of 26.08, and below the 200-day MA of 26.66, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 50.86 is Neutral, neither overbought nor oversold. The STOCH value of 33.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:0772.

China Literature Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$14.21B	6.47	-3.76%	3.69%	2.48%	-35.46%
0772	58 Neutral	$25.63B	27.55	-1.14%	―	13.74%	-125.64%
TCTZF		$598.64B	22.17	21.25%	0.66%	―	―
MPNGF		$106.50B	21.33	22.27%	―	―	―
XIACF		$181.69B	52.85	13.43%	―	―	―
735		€30.68B	77.30	33.41%	0.15%	―	―
1024	77 Outperform	HK$214.85B	13.05	27.71%	―	9.84%	142.09%

China Literature Corporate Events

China Literature Limited Announces 2025 Annual General Meeting

China Literature Limited has announced its upcoming annual general meeting scheduled for May 30, 2025, in Hong Kong. Key agenda items include the consideration of audited financial statements, re-election of directors, and re-appointment of auditors. The meeting will also address resolutions related to the issuance of additional shares and related securities, reflecting the company’s strategic focus on expanding its financial and operational capabilities. This announcement underscores the company’s commitment to maintaining robust corporate governance and enhancing shareholder value.

China Literature Reports 2024 Results, Boosted by IP Success and AI Integration

China Literature Limited reported its annual results for 2024, showing a 15.8% increase in revenues to RMB 8.1 billion, despite an operating loss of RMB 336 million. The company highlighted the success of its IP operations, with revenues rising 34% year-over-year, driven by blockbuster titles and the commercialization of popular content like ‘Ne Zha 22.’ The integration of AI technologies, such as the DeepSeek-R1 model in their ‘Writer Assistant’ tool, has enhanced content creation, leading to significant growth in user engagement and new writer income. These developments underscore China Literature’s strategic focus on quality content and technological innovation, reinforcing its leading position in the industry.

China Literature Expects 2024 Net Loss Due to Goodwill Impairment

China Literature Limited has issued a profit warning, anticipating a net loss of RMB150 million to RMB250 million for the 2024 financial year, primarily due to a non-cash impairment of goodwill from its 2018 acquisition of New Classics Media Holdings Limited. Despite the expected loss, the company plans to focus on developing top-tier film and drama content, which may lead to higher production costs and extended project timelines. However, this strategic shift is expected to strengthen its market position and create long-term value for its intellectual property business.