company background image
772

China Literature SEHK:772 Stock Report

Last Price

HK$36.80

Market Cap

HK$37.6b

7D

7.0%

1Y

-57.9%

Updated

25 Jun, 2022

Data

Company Financials +
772 fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance2/6
Financial Health6/6
Dividends0/6

772 Stock Overview

China Literature Limited, an investment holding company, operates an online literature platform in the People’s Republic of China.

China Literature Competitors

 

 

 

 

 

 

 

 

 

 

 

 

Price History & Performance

Summary of all time highs, changes and price drops for China Literature
Historical stock prices
Current Share PriceHK$36.80
52 Week HighHK$89.30
52 Week LowHK$23.00
Beta0.53
1 Month Change19.87%
3 Month Change18.52%
1 Year Change-57.94%
3 Year Change0%
5 Year Changen/a
Change since IPO-64.06%

Recent News & Updates

Jun 22
We Like These Underlying Return On Capital Trends At China Literature (HKG:772)

We Like These Underlying Return On Capital Trends At China Literature (HKG:772)

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for...

Jun 01
We Think China Literature (HKG:772) Can Stay On Top Of Its Debt

We Think China Literature (HKG:772) Can Stay On Top Of Its Debt

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Mar 29
China Literature's (HKG:772) Solid Profits Have Weak Fundamentals

China Literature's (HKG:772) Solid Profits Have Weak Fundamentals

Despite posting some strong earnings, the market for China Literature Limited's ( HKG:772 ) stock hasn't moved much...

Mar 05
Returns Are Gaining Momentum At China Literature (HKG:772)

Returns Are Gaining Momentum At China Literature (HKG:772)

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for...

Shareholder Returns

772HK MediaHK Market
7D7.0%3.8%2.1%
1Y-57.9%-47.7%-23.3%

Return vs Industry: 772 underperformed the Hong Kong Media industry which returned -47.7% over the past year.

Return vs Market: 772 underperformed the Hong Kong Market which returned -23.3% over the past year.

Price Volatility

Is 772's price volatile compared to industry and market?
772 volatility
772 Average Weekly Movement8.2%
Media Industry Average Movement10.6%
Market Average Movement7.0%
10% most volatile stocks in HK Market13.8%
10% least volatile stocks in HK Market3.3%

Stable Share Price: 772 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: 772's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20021,975Edward Chenghttps://ir.yuewen.com

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.

China Literature Fundamentals Summary

How do China Literature's earnings and revenue compare to its market cap?
772 fundamental statistics
Market CapCN¥32.08b
Earnings (TTM)CN¥1.85b
Revenue (TTM)CN¥8.67b

17.4x

P/E Ratio

3.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
772 income statement (TTM)
RevenueCN¥8.67b
Cost of RevenueCN¥4.06b
Gross ProfitCN¥4.60b
Other ExpensesCN¥2.76b
EarningsCN¥1.85b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)1.81
Gross Margin53.11%
Net Profit Margin21.30%
Debt/Equity Ratio6.8%

How did 772 perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is 772 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 772?

Other financial metrics that can be useful for relative valuation.

772 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue3x
Enterprise Value/EBITDA23.3x
PEG Ratio7.2x

Price to Earnings Ratio vs Peers

How does 772's PE Ratio compare to its peers?

772 PE Ratio vs Peers
The above table shows the PE ratio for 772 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average57.7x

Price-To-Earnings vs Peers: 772 is good value based on its Price-To-Earnings Ratio (17.4x) compared to the peer average (57.7x).


Price to Earnings Ratio vs Industry

How does 772's PE Ratio compare vs other companies in the Media Industry?

Price-To-Earnings vs Industry: 772 is expensive based on its Price-To-Earnings Ratio (17.4x) compared to the Hong Kong Media industry average (13x)


Price to Earnings Ratio vs Fair Ratio

What is 772's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

772 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio17.4x
Fair PE Ratio10.4x

Price-To-Earnings vs Fair Ratio: 772 is expensive based on its Price-To-Earnings Ratio (17.4x) compared to the estimated Fair Price-To-Earnings Ratio (10.4x).


Share Price vs Fair Value

What is the Fair Price of 772 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 772 (HK$36.8) is trading below our estimate of fair value (HK$127.4)

Significantly Below Fair Value: 772 is trading below fair value by more than 20%.


Price to Earnings Growth Ratio

PEG Ratio: 772 is poor value based on its PEG Ratio (7.2x)


Discover undervalued companies

Future Growth

How is China Literature forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


2.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 772's forecast earnings growth (2.4% per year) is above the savings rate (1.5%).

Earnings vs Market: 772's earnings (2.4% per year) are forecast to grow slower than the Hong Kong market (17% per year).

High Growth Earnings: 772's earnings are forecast to grow, but not significantly.

Revenue vs Market: 772's revenue (10.4% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 772's revenue (10.4% 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 (8.5%).


Discover growth companies

Past Performance

How has China Literature performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-29.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 772 has a large one-off gain of CN¥1.3B impacting its December 31 2021 financial results.

Growing Profit Margin: 772 became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: 772 has become profitable over the past 5 years, growing earnings by -29.2% per year.

Accelerating Growth: 772 has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: 772 has become profitable in the last year, making it difficult to compare its past year earnings growth to the Media industry (76.4%).


Return on Equity

High ROE: 772's Return on Equity (10.7%) is considered low.


Discover strong past performing companies

Financial Health

How is China Literature's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: 772's short term assets (CN¥12.7B) exceed its short term liabilities (CN¥4.5B).

Long Term Liabilities: 772's short term assets (CN¥12.7B) exceed its long term liabilities (CN¥1.6B).


Debt to Equity History and Analysis

Debt Level: 772 has more cash than its total debt.

Reducing Debt: 772's debt to equity ratio has reduced from 11.1% to 6.8% over the past 5 years.

Debt Coverage: 772's debt is well covered by operating cash flow (95.2%).

Interest Coverage: 772 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Discover healthy companies

Dividend

What is China Literature current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage

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 recent payouts.

High Dividend: Unable to evaluate 772's dividend yield against the top 25% of dividend payers, as the company has not reported any recent 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.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as 772 has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure


CEO

Edward Cheng (46 yo)

2.17yrs

Tenure

CN¥28,769,000

Compensation

Mr. Wu Cheng, also known as Edward, serves as Non-Executive Director at Maoyan Entertainment since June 9, 2020. He serves as the Chief Executive Officer & Executive Director of China Literature Limited si...


Leadership Team

Experienced Management: 772's management team is considered experienced (2.2 years average tenure).


Board Members

Experienced Board: 772's board of directors are considered experienced (3.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

China Literature Limited's employee growth, exchange listings and data sources


Key Information

  • Name: China Literature Limited
  • Ticker: 772
  • Exchange: SEHK
  • Founded: 2002
  • Industry: Publishing
  • Sector: Media
  • Implied Market Cap: HK$37.648b
  • Shares outstanding: 1.02b
  • Website: https://ir.yuewen.com

Number of Employees


Location

  • China Literature Limited
  • No. 690 Bi Bo Road
  • Block 6
  • Shanghai
  • 201203
  • China

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/06/25 00:00
End of Day Share Price2022/06/24 00:00
Earnings2021/12/31
Annual Earnings2021/12/31


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.