CHTC Fong's International Co (HKSE:00641) Beneish M-Score : -2.86 (As of May. 21, 2024)

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What is CHTC Fong's International Co Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.86 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for CHTC Fong's International Co's Beneish M-Score or its related term are showing as below:

HKSE:00641' s Beneish M-Score Range Over the Past 10 Years
Min: -3.34 Med: -2.56 Max: -1.78
Current: -2.86

During the past 13 years, the highest Beneish M-Score of CHTC Fong's International Co was -1.78. The lowest was -3.34. And the median was -2.56.

CHTC Fong's International Co Beneish M-Score Historical Data

The historical data trend for CHTC Fong's International Co's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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CHTC Fong's International Co Beneish M-Score Chart

CHTC Fong's International Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.46

-2.99

-2.57

-2.75

-2.86

CHTC Fong's International Co Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Beneish M-Score	Get a 7-Day Free Trial															-2.57	-	-2.75	-	-2.86

Competitive Comparison of CHTC Fong's International Co's Beneish M-Score

For the Specialty Industrial Machinery subindustry, CHTC Fong's International Co's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

CHTC Fong's International Co's Beneish M-Score Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, CHTC Fong's International Co's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where CHTC Fong's International Co's Beneish M-Score falls into.

CHTC Fong's International Co Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of CHTC Fong's International Co for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.3385

0.528 * 0.9191

0.404 * 0.9023

0.892 * 0.6993

0.115 * 1.1153

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.2239

4.679 * -0.064559

0.327 * 1.0386

-2.86

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was HK$325 Mil.
Revenue was HK$1,740 Mil.
Gross Profit was HK$490 Mil.
Total Current Assets was HK$1,220 Mil.
Total Assets was HK$3,449 Mil.
Property, Plant and Equipment(Net PPE) was HK$1,389 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$105 Mil.
Selling, General, & Admin. Expense(SGA) was HK$680 Mil.
Total Current Liabilities was HK$2,162 Mil.
Long-Term Debt & Capital Lease Obligation was HK$86 Mil.
Net Income was HK$-239 Mil.
Gross Profit was HK$0 Mil.
Cash Flow from Operations was HK$-16 Mil.

Total Receivables was HK$347 Mil.
Revenue was HK$2,489 Mil.
Gross Profit was HK$643 Mil.
Total Current Assets was HK$1,247 Mil.
Total Assets was HK$3,964 Mil.
Property, Plant and Equipment(Net PPE) was HK$1,648 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$140 Mil.
Selling, General, & Admin. Expense(SGA) was HK$794 Mil.
Total Current Liabilities was HK$2,475 Mil.
Long-Term Debt & Capital Lease Obligation was HK$13 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI	=	(Receivables_t / Revenue_t)	/	(Receivables_t-1 / Revenue_t-1)
	=	(324.651 / 1740.33)	/	(346.842 / 2488.688)
	=	0.186546	/	0.139367
	=	1.3385

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI	=	GrossMargin_t-1	/	GrossMargin_t
	=	(GrossProfit_t-1 / Revenue_t-1)	/	(GrossProfit_t / Revenue_t)
	=	(643.445 / 2488.688)	/	(489.572 / 1740.33)
	=	0.258548	/	0.28131
	=	0.9191

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (1220.193 + 1389.394) / 3449.021)	/	(1 - (1246.663 + 1648.359) / 3964.398)
	=	0.243383	/	0.269745
	=	0.9023

4. SGI = Sales Growth Index

Ratio of Revenue in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI	=	Sales_t	/	Sales_t-1
	=	Revenue_t	/	Revenue_t-1
	=	1740.33	/	2488.688
	=	0.6993

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI	=	(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))	/	(Depreciation_t / (Depreciaton_t + PPE_t))
	=	(139.951 / (139.951 + 1648.359))	/	(104.851 / (104.851 + 1389.394))
	=	0.078259	/	0.07017
	=	1.1153

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI	=	(SGA_t / Sales_t)	/	(SGA_t-1 /Sales_t-1)
	=	(679.841 / 1740.33)	/	(794.298 / 2488.688)
	=	0.390639	/	0.319163
	=	1.2239

7. LVGI = Leverage Index

The ratio of total debt to Total Assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((85.978 + 2162.363) / 3449.021)	/	((13.239 + 2474.914) / 3964.398)
	=	0.651878	/	0.627624
	=	1.0386

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA	=	(IncomefromContinuingOperations_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(NetIncome_t - NonOperatingIncome_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(-238.623 - 0	-	-15.956)	/	3449.021
	=	-0.064559

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

CHTC Fong's International Co has a M-score of -2.86 suggests that the company is unlikely to be a manipulator.

CHTC Fong's International Co Beneish M-Score Related Terms

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CHTC Fong's International Co (HKSE:00641) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » CHTC Fong's International Co Ltd (HKSE:00641) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

51 Kwai Cheong Road, Level 13, Tower 2, Kowloon Commerce Centre, Kwai Chung, Hong Kong, HKG

Website

https://www.fongs.com

CHTC Fong's International Co Ltd is engaged in manufacturing machines, equipment, and other related parts. The group through its subsidiaries operates in three reportable segments which include manufacturing and sale of dyeing and finishing machines, trading of stainless steel supplies and Manufacture and sale of stainless steel casting products. Its business activity functions through various geographical regions which include China, Hong Kong, the Asia-Pacific, Europe, North America, South America, and others. While the majority of the company revenues for Fong's Industries are derived through the dyeing and finishing machines segment.

CHTC Fong's International Co (HKSE:00641) Headlines

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