China Literature Ltd. (772) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

China Literature Ltd.

Dadi International Group Ltd.

Winto Group (Holdings) Ltd.

One Media Group Ltd.

Hung Hing Printing Group Ltd.

Smart Globe Holdings Ltd.

Prosperous Printing Co., Ltd.

eprint Group Ltd.

Meta Media Holdings Ltd.

Sino Splendid Holdings Ltd.

Why is China Literature Ltd. ?

High Debt company with Weak Long Term Fundamental Strength

Poor long term growth as Operating profit has grown by an annual rate -7.41% of over the last 5 years
The company is Net-Debt Free
ROCE(HY) Lowest at -4.44%
INTEREST COVERAGE RATIO(Q) Lowest at 4,422.96
RAW MATERIAL COST(Y) Grown by 10% (YoY)

With ROE of 6.17%, it has a Expensive valuation with a 1.50 Price to Book Value

Over the past year, while the stock has generated a return of -10.89%, its profits have risen by 19.6% ; the PEG ratio of the company is 1.2

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -10.89% returns in the last 1 year, the stock has also underperformed Hang Seng Hong Kong in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you sell?

All quantity irrespective of whether you are making profits or losses

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Media & Entertainment)

When to re-enter? - We will constantly monitor the company and review our call based on new data

Is China Literature Ltd. for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

China Literature Ltd.

-10.89%

-0.24

53.91%

Hang Seng Hong Kong

8.76%

0.45

19.63%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

-4.31%

EBIT Growth (5y)

-7.41%

EBIT to Interest (avg)

23.36

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.41

Sales to Capital Employed (avg)

0.43

Tax Ratio

32.67%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

0.01%

ROCE (avg)

5.70%

ROE (avg)

6.22%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.50

EV to EBIT

72.82

EV to EBITDA

40.40

EV to Capital Employed

1.78

EV to Sales

3.09

PEG Ratio

1.23

Dividend Yield

ROCE (Latest)

2.45%

ROE (Latest)

6.17%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Bullish

Dow Theory

Mildly Bearish

OBV

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

4What is working for the Company

CASH AND EQV(HY)

Highest at HKD 8,606.44 MM

DEBT-EQUITY RATIO (HY)

Lowest at -43.05 %

INVENTORY TURNOVER RATIO(HY)

Highest at 3.23 times

NET SALES(Q)

Highest at HKD 4,571.28 MM

-10What is not working for the Company

ROCE(HY)

Lowest at -4.44%

INTEREST COVERAGE RATIO(Q)

Lowest at 4,422.96

RAW MATERIAL COST(Y)

Grown by 10% (YoY

OPERATING PROFIT(Q)

Lowest at HKD 174.22 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 3.81 %

PRE-TAX PROFIT(Q)

Lowest at HKD 187.18 MM

NET PROFIT(Q)

Lowest at HKD 256.26 MM

EPS(Q)

Lowest at HKD -1.74

Here's what is working for China Literature Ltd.

Net Sales

Highest at HKD 4,571.28 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (HKD MM)

Cash and Eqv

Highest at HKD 8,606.44 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debt-Equity Ratio

Lowest at -43.05 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Inventory Turnover Ratio

Highest at 3.23 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Here's what is not working for China Literature Ltd.

Interest Coverage Ratio

Lowest at 4,422.96

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Operating Profit

Lowest at HKD 174.22 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (HKD MM)

Operating Profit Margin

Lowest at 3.81 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Pre-Tax Profit

Lowest at HKD 187.18 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is negative

Pre-Tax Profit (HKD MM)

Net Profit

Lowest at HKD 256.26 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is negative

Net Profit (HKD MM)

EPS

Lowest at HKD -1.74

in the last five periods

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (HKD)

Raw Material Cost

Grown by 10% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales