China Information Technology Development (SEHK:8178) - Share price, News & Analysis

Q: What is the Fair Price of 8178 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

8178 (HK$0.14) is trading below our estimate of [[fair value]] (HK$0.29)

8178 fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	0/6
Past Performance	0/6
Financial Health	5/6
Dividends	0/6

8178 Stock Overview

Rewards

Trading at 52.2% below our estimate of its fair value

Risk Analysis

Shareholders have been substantially diluted in the past year

Does not have a meaningful market cap (HK$72M)

China Information Technology Development Competitors

OneForce Holdings

SEHK:1933

HK$100.1m

Kantone Holdings

SEHK:1059

HK$143.2m

GET Holdings

SEHK:8100

HK$157.8m

Enterprise Development Holdings

SEHK:1808

HK$33.3m

Price History & Performance

Summary of all time highs, changes and price drops for China Information Technology Development
Historical stock prices
Current Share Price	HK$0.14
52 Week High	HK$0.44
52 Week Low	HK$0.12
Beta	0.39
1 Month Change	-12.50%
3 Month Change	-20.00%
1 Year Change	-65.00%
3 Year Change	-93.79%
5 Year Change	-95.58%
Change since IPO	-99.88%

Shareholder Returns

	8178	HK Software	HK Market
7D	0%	0.8%	2.1%
1Y	-65.0%	-52.0%	-23.3%

Return vs Industry: 8178 underperformed the Hong Kong Software industry which returned -52% over the past year.

Return vs Market: 8178 underperformed the Hong Kong Market which returned -23.3% over the past year.

Price Volatility

Is 8178's price volatile compared to industry and market?
8178 volatility
8178 Average Weekly Movement	6.9%
Software Industry Average Movement	8.6%
Market Average Movement	7.0%
10% most volatile stocks in HK Market	13.8%
10% least volatile stocks in HK Market	3.3%

Stable Share Price: 8178 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: 8178's weekly volatility has decreased from 13% to 7% over the past year.

About the Company

Founded	Employees	CEO	Website
2001	59	Daniel Wong	https://www.citd.com.hk

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.

China Information Technology Development Fundamentals Summary

How do China Information Technology Development's earnings and revenue compare to its market cap?
8178 fundamental statistics
Market Cap	HK$72.06m
Earnings (TTM)	-HK$90.10m
Revenue (TTM)	HK$62.36m

1.2x

P/S Ratio

-0.8x

P/E Ratio

Is 8178 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
8178 income statement (TTM)
Revenue	HK$62.36m
Cost of Revenue	HK$35.16m
Gross Profit	HK$27.20m
Other Expenses	HK$117.31m
Earnings	-HK$90.10m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-0.18
Gross Margin	43.62%
Net Profit Margin	-144.48%
Debt/Equity Ratio	25.5%

How did 8178 perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is 8178 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-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales 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 8178?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 8178. This is calculated by dividing 8178's market cap by their current preferred multiple.
What is 8178's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	HK$72.06m

8178 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/Revenue	2.1x
Enterprise Value/EBITDA	-5.6x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does 8178's PS Ratio compare to its peers?

8178 PS Ratio vs Peers

The above table shows the PS ratio for 8178 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	0.8x
1933 OneForce Holdings	0.2x	n/a	HK$100.1m
1059 Kantone Holdings	1x	n/a	HK$143.2m
8100 GET Holdings	1.3x	n/a	HK$157.8m
1808 Enterprise Development Holdings	0.7x	n/a	HK$33.3m
8178 China Information Technology Development	1.2x	n/a	HK$72.1m

Forward PS

Price-To-Sales vs Peers: 8178 is expensive based on its Price-To-Sales Ratio (1.2x) compared to the peer average (0.8x).

Price to Earnings Ratio vs Industry

How does 8178's PE Ratio compare vs other companies in the HK Software Industry?

Price-To-Sales vs Industry: 8178 is good value based on its Price-To-Sales Ratio (1.2x) compared to the Hong Kong Software industry average (1.3x)

Price to Sales Ratio vs Fair Ratio

What is 8178's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

8178 PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	1.2x
Fair PS Ratio	n/a

Price-To-Sales vs Fair Ratio: Insufficient data to calculate 8178's Price-To-Sales Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of 8178 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 8178 (HK$0.14) is trading below our estimate of fair value (HK$0.29)

Significantly Below Fair Value: 8178 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 8178's PEG Ratio to determine if it is good value.

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Future Growth

How is China Information Technology Development forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

70.1%

Forecasted Software industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as China Information Technology Development has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

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Examine whether China Information Technology Development is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
China Information Technology Development competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has China Information Technology Development performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

15.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 8178 is currently unprofitable.

Growing Profit Margin: 8178 is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: 8178 is unprofitable, but has reduced losses over the past 5 years at a rate of 15.2% per year.

Accelerating Growth: Unable to compare 8178's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 8178 is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (-4.2%).

Return on Equity

High ROE: 8178 has a negative Return on Equity (-25.4%), as it is currently unprofitable.

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Financial Health

How is China Information Technology Development's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: 8178's short term assets (HK$93.2M) exceed its short term liabilities (HK$53.1M).

Long Term Liabilities: 8178's short term assets (HK$93.2M) exceed its long term liabilities (HK$80.5M).

Debt to Equity History and Analysis

Debt Level: 8178's net debt to equity ratio (17.3%) is considered satisfactory.

Reducing Debt: 8178's debt to equity ratio has increased from 14.7% to 25.5% over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable 8178 has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: 8178 is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 31.8% per year.

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Dividend

What is China Information Technology Development 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 8178's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate 8178'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 8178's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 8178'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 8178 has not reported any payouts.

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Management

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

2.6yrs

Average management tenure

CEO

Daniel Wong (61 yo)

2.58yrs

Tenure

HK$1,018,000

Compensation

Mr. King Shiu Wong, also known as Daniel, serves as Chairman and Chief Executive Officer at China Information Technology Development Limited since November 25, 2019. He is also the authorized representativ...

CEO Compensation Analysis

Compensation vs Market: Daniel's total compensation ($USD129.69K) is below average for companies of similar size in the Hong Kong market ($USD233.02K).

Compensation vs Earnings: Daniel's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: 8178's management team is considered experienced (2.6 years average tenure).

Board Members

Experienced Board: 8178's board of directors are considered experienced (4.8 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: 8178 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 substantially diluted in the past year, with total shares outstanding growing by 83.7%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31