Executive Summary
China Literature Limited, an investment holding company, operates an online literature platform in the People’s Republic of China.
Rewards
Risk Analysis
Snowflake Analysis
Flawless balance sheet with moderate growth potential.
Similar Companies
Share Price & News
How has China Literature's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: 772's share price has been volatile over the past 3 months.
Market Performance
7 Day Return
1.5%
772
-2.6%
HK Media
2.7%
HK Market
1 Year Return
-18.5%
772
-28.8%
HK Media
-19.8%
HK Market
Return vs Industry: 772 exceeded the Hong Kong Media industry which returned -27.7% over the past year.
Return vs Market: 772 exceeded the Hong Kong Market which returned -21.6% over the past year.
Shareholder returns
| 772 | Industry | Market | |
|---|---|---|---|
| 7 Day | 1.5% | -2.6% | 2.7% |
| 30 Day | -9.4% | -7.3% | -7.2% |
| 90 Day | -15.8% | -17.2% | -12.1% |
| 1 Year | -18.5%-18.5% | -27.2%-28.8% | -16.9%-19.8% |
| 3 Year | n/a | -55.0%-60.7% | 0.9%-9.3% |
| 5 Year | n/a | -66.6%-69.8% | -12.6%-26.7% |
Price Volatility Vs. Market
How volatile is China Literature's share price compared to the market and industry in the last 5 years?
Simply Wall St News
16 hours ago | Simply Wall St
Is China Literature Limited (HKG:772) Potentially Undervalued?1 week ago | Simply Wall St
Analysts' Revenue Estimates For China Literature Limited (HKG:772) Are Surging HigherValuation
Is China Literature undervalued compared to its fair value and its price relative to the market?
26.5%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: 772 (HK$31.05) is trading below our estimate of fair value (HK$42.7)
Significantly Below Fair Value: 772 is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: 772 is poor value based on its PE Ratio (25.8x) compared to the Media industry average (11.5x).
PE vs Market: 772 is poor value based on its PE Ratio (25.8x) compared to the Hong Kong market (9.1x).
Price to Earnings Growth Ratio
PEG Ratio: 772 is poor value based on its PEG Ratio (1.9x)
Price to Book Ratio
PB vs Industry: 772 is overvalued based on its PB Ratio (1.5x) compared to the HK Media industry average (0.7x).
Next Steps
Future Growth
How is China Literature forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
13.8%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: 772's forecast earnings growth (13.8% per year) is above the savings rate (1.6%).
Earnings vs Market: 772's earnings (13.8% per year) are forecast to grow faster than the Hong Kong market (11.5% per year).
High Growth Earnings: 772's earnings are forecast to grow, but not significantly.
Revenue vs Market: 772's revenue (11.7% per year) is forecast to grow faster than the Hong Kong market (10% per year).
High Growth Revenue: 772's revenue (11.7% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: 772's Return on Equity is forecast to be low in 3 years time (7.2%).
Next Steps
Past Performance
How has China Literature performed over the past 5 years?
48.9%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: 772 has a large one-off gain of CN¥300.3M impacting its December 31 2019 financial results.
Growing Profit Margin: 772's current net profit margins (13.1%) are lower than last year (18.1%).
Past Earnings Growth Analysis
Earnings Trend: 772 has become profitable over the past 5 years, growing earnings by 48.9% per year.
Accelerating Growth: 772's earnings growth over the past year (20.4%) is below its 5-year average (48.9% per year).
Earnings vs Industry: 772 earnings growth over the past year (20.4%) exceeded the Media industry -2.2%.
Return on Equity
High ROE: 772's Return on Equity (5.7%) is considered low.
Next Steps
Financial Health
How is China Literature's financial position?
Financial Position Analysis
Short Term Liabilities: 772's short term assets (CN¥12.2B) exceed its short term liabilities (CN¥5.9B).
Long Term Liabilities: 772's short term assets (CN¥12.2B) exceed its long term liabilities (CN¥925.5M).
Debt to Equity History and Analysis
Debt Level: 772's debt to equity ratio (6.7%) is considered satisfactory.
Reducing Debt: 772's debt to equity ratio has reduced from 15.6% to 6.7% over the past 5 years.
Debt Coverage: 772's debt is well covered by operating cash flow (60.1%).
Interest Coverage: 772's interest payments on its debt are well covered by EBIT (53.4x coverage).
Balance Sheet
Next Steps
Dividend
What is China Literature's current dividend yield, its reliability and sustainability?
Dividend Yield vs Market
Notable Dividend: Unable to evaluate 772's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.
High Dividend: Unable to evaluate 772's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if 772's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if 772's dividend payments have been increasing.
Current Payout to Shareholders
Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: No need to calculate the sustainability of 772's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
5.3yrs
Average management tenure
CEO
Wenhui Wu (41yo)
5.42s
Tenure
CN¥4,288,000
Compensation
Mr. Wu Wenhui serves as Co-Chief Executive Officer and Executive Director of China Literature Limited since November 06, 2014. Mr. Wu has been the President of Cloudary Corporation at Shanda Interactive En ...
CEO Compensation Analysis
Compensation vs Market: Wenhui's total compensation ($USD605.11K) is about average for companies of similar size in the Hong Kong market ($USD501.84K).
Compensation vs Earnings: Wenhui's compensation has been consistent with company performance over the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Co-CEO & Executive Director | 5.42yrs | CN¥4.29m | 2.68% CN¥849.8m | |
| Co-CEO & Executive Director | 5.42yrs | CN¥6.87m | no data | |
| President | no data | no data | no data | |
| Group GM of Investment & Joint Company Secretary | 5.08yrs | no data | no data | |
| Head of Capital Markets & Investor Relations | no data | no data | no data | |
| Senior Vice President | no data | no data | no data | |
| Senior Vice President | no data | no data | no data | |
| Joint Company Secretary | 2.83yrs | no data | no data |
5.3yrs
Average Tenure
42yo
Average Age
Experienced Management: 772's management team is seasoned and experienced (5.3 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Co-CEO & Executive Director | 5.42yrs | CN¥4.29m | 2.68% CN¥849.8m | |
| Co-CEO & Executive Director | 5.42yrs | CN¥6.87m | no data | |
| Non-Executive Director | 0.42yr | no data | 0.00031% CN¥98.4k | |
| Independent Non-Executive Director | 2.5yrs | CN¥657.00k | no data | |
| Independent Non-Executive Director | 2.5yrs | CN¥657.00k | no data | |
| Chairman of the Board | no data | no data | 0.028% CN¥8.8m | |
| Independent Non-Executive Director | 2.5yrs | CN¥876.00k | no data | |
| Non-Executive Director | 0.92yr | no data | 4.08% CN¥1.3b | |
| Non-Executive Director | 0.92yr | no data | no data |
2.5yrs
Average Tenure
49yo
Average Age
Experienced Board: 772's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: 772 insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 11.1%.
Top Shareholders
Company Information
China Literature Limited's company bio, employee growth, exchange listings and data sources
Key Information
- Name: China Literature Limited
- Ticker: 772
- Exchange: SEHK
- Founded: 2002
- Industry: Publishing
- Sector: Media
- Market Cap: HK$31.743b
- Shares outstanding: 1.02b
- Website: https://ir.yuewen.com
Number of Employees
Location
- China Literature Limited
- No. 690 Bi Bo Road
- Block 6
- Shanghai
- China
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| 772 | SEHK (The Stock Exchange of Hong Kong Ltd.) | Yes | Ordinary Shares | HK | HKD | Nov 2017 |
| C2X | DB (Deutsche Boerse AG) | Yes | Ordinary Shares | DE | EUR | Nov 2017 |
| CHLL.F | OTCPK (Pink Sheets LLC) | Yes | Ordinary Shares | US | USD | Nov 2017 |
| 772 | SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect) | Yes | Ordinary Shares | HK | HKD | Nov 2017 |
| 772 | SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect) | Yes | Ordinary Shares | HK | HKD | Nov 2017 |
Biography
China Literature Limited, an investment holding company, operates an online literature platform in the People’s Republic of China. The company’s flagship product is QQ Reading, a unified mobile content aggregation and distribution platform. As of December 31, 2018, its library featured 7.7 million writers and 11.2 million works of literature, including 10.7 million original literary works created by writers on its platform, 350 thousand works that are sourced from third-party platforms, and 200 thousand e-books. 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, such as Baidu, Sogou, JD.com, and Xiaomi Duokan 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.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/04/07 14:49 |
| End of Day Share Price | 2020/04/07 00:00 |
| Earnings | 2019/12/31 |
| Annual Earnings | 2019/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.