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China Literature
(0772)
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Rating:53Neutral
Price Target:
HK$22.00
▲(9.56% Upside)
Action:Reiterated
Date:09/06/26
The score is held back primarily by weakening financial performance—losses and a sharp deterioration in cash flow—despite a strong, low-leverage balance sheet. Technicals provide some support in the near term, but the longer-term downtrend remains a headwind. Valuation is also constrained by negative earnings and the absence of a dividend yield in the provided data.
Positive Factors
Integrated IP business model
The combination of digital reading and downstream IP licensing gives China Literature multiple ways to monetize original works. Successful titles can generate value beyond initial reader payments through adaptations and related commercialization, supporting a scalable content ecosystem.
Negative Factors
Deepening net losses
The move from profitability into substantially larger losses indicates that the current cost base and spending levels are not being covered by gross profit. Persistent losses would weaken retained equity, limit reinvestment capacity, and make sustainable earnings recovery more dependent on execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Integrated IP business model
The combination of digital reading and downstream IP licensing gives China Literature multiple ways to monetize original works. Successful titles can generate value beyond initial reader payments through adaptations and related commercialization, supporting a scalable content ecosystem.
Read all positive factors
China Literature (0772) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
HK$22.16B
Dividend YieldN/A
Average Volume (3M)6.78M
Price to Earnings (P/E)―
Beta (1Y)1.38
Revenue Growth11.79%
EPS Growth-1226.27%
CountryHK
Employees1,700
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)-1.45
Shares Outstanding1,017,367,300
10 Day Avg. Volume9,940,359
30 Day Avg. Volume6,784,893
Financial Highlights & Ratios
PEG Ratio-0.15
Price to Book (P/B)1.72
Price to Sales (P/S)4.10
P/FCF Ratio-82.64
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
HK$25.14Price Target Upside25.18% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)0.62
Revenue Forecast (FY)HK$7.32B
China Literature Business Overview & Revenue Model
Company Description
China Literature Limited is a major investment holding company that manages a leading digital literature platform across the People's Republic of China. It strategically monetizes its extensive catalog of intellectual properties (IPs) through key ...
How the Company Makes Money
China Literature primarily generates revenue through (1) online reading and related digital content services and (2) monetization of its IP portfolio beyond reading. In online reading, the company earns money from paid reading (users paying to acc...
China Literature Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
78
Positive
Cash Flow
39
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.66B | 7.37B | 8.12B | 7.01B | 7.63B | 8.67B |
| Gross Profit | 3.69B | 3.54B | 3.92B | 3.37B | 4.03B | 4.60B |
| EBITDA | 464.41M | 641.81M | 748.35M | 1.22B | 1.20B | 1.12B |
| Net Income | -1.49B | -776.05M | -209.22M | 804.88M | 608.19M | 1.85B |
Balance Sheet | ||||||
| Total Assets | 21.31B | 21.59B | 22.95B | 23.19B | 22.73B | 23.30B |
| Cash, Cash Equivalents and Short-Term Investments | 7.65B | 7.73B | 7.62B | 6.28B | 7.51B | 7.21B |
| Total Debt | 156.51M | 181.43M | 166.21M | 238.10M | 617.98M | 1.45B |
| Total Liabilities | 3.83B | 4.06B | 4.57B | 4.16B | 4.78B | 6.11B |
| Stockholders Equity | 17.47B | 17.53B | 18.37B | 19.02B | 17.96B | 17.19B |
Cash Flow | ||||||
| Free Cash Flow | 350.63M | -365.16M | 2.41B | 954.13M | 1.25B | 879.35M |
| Operating Cash Flow | 396.68M | -276.51M | 2.53B | 1.13B | 1.58B | 1.12B |
| Investing Cash Flow | 436.63M | -1.06B | -1.76B | -3.39B | 528.10M | 936.23M |
| Financing Cash Flow | -232.57M | -225.94M | -346.01M | -510.82M | -1.15B | -349.99M |
China Literature Technical Analysis
Positive
20.08
Price Trends
20.20
Positive
22.25
Negative
27.96
Negative
Market Momentum
0.12
Negative
56.99
Neutral
41.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0772, the sentiment is Positive. The current price of 20.08 is below the 20-day moving average (MA) of 20.95, below the 50-day MA of 20.20, and below the 200-day MA of 27.96, indicating a neutral trend. The MACD of 0.12 indicates Negative momentum. The RSI at 56.99 is Neutral, neither overbought nor oversold. The STOCH value of 41.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0772.
China Literature Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | HK$3.99T | 14.64 | 20.47% | 1.20% | 15.97% | 18.45% | |
74 Outperform | HK$5.01B | 11.89 | 3.92% | 5.16% | -6.86% | 379.60% | |
69 Neutral | HK$13.12B | 5.08 | 8.15% | 8.95% | 1.85% | -14.40% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
53 Neutral | HK$22.16B | -12.84 | -8.53% | ― | 11.79% | -1226.27% | |
52 Neutral | HK$1.35B | -1.95 | -7.89% | ― | -13.13% | -332.19% | |
47 Neutral | HK$253.04B | -47.64 | -1.74% | ― | -0.83% | -116.20% |
* Communication Services Sector Average
HK:0772
China Literature
21.78
-19.18
-46.83%
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442.80
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Baidu, Inc. Class A
95.90
-10.30
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53.40
-33.43
-38.50%
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4.27
-3.48
-44.93%
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6.94
-5.95
-46.16%
China Literature Corporate Events
China Literature Grants Nearly 8 Million RSUs to Directors and Staff Under 2020 Scheme
Aug 13, 2026
China Literature has granted 7,950,965 restricted share units under its 2020 RSU Scheme to two directors, Huang Yan and Cao Huayi, and other employees of the group. The RSUs are granted at nil consideration and represent an equivalent number of sh...
China Literature Grants 779,812 Share Options Under Employee Incentive Plan
Aug 13, 2026
China Literature has granted a total of 779,812 share options under its Share Option Plan to director Huang Yan and other eligible employees, with an exercise price of HK$22.40 per share and a ten-year validity period. The options will vest in fou...
China Literature Boosts IP-Driven Revenue but Profit Slides on Investment Push
Aug 11, 2026
China Literature reported a 10.7% year-on-year rise in revenue to RMB3.53 billion and an 11.1% increase in gross profit for the first half of 2026, but operating profit and net profit fell sharply due to higher costs and investments, with profit a...
China Literature Sets August Board Meeting to Review Interim Results and Dividend
Jun 23, 2026
China Literature Limited has scheduled a board meeting for August 11, 2026 to review and approve its unaudited interim results for the six months ending June 30, 2026, and to authorize their publication. The board will also consider the possibilit...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.