Nine Dragons Paper (Holdings) (HKSE:02689) Beneish M-Score : -1.45 (As of May. 03, 2024)

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What is Nine Dragons Paper (Holdings) 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.

Warning Sign:

Beneish M-Score -1.45 higher than -1.78, which implies that the company might have manipulated its financial results.

The historical rank and industry rank for Nine Dragons Paper (Holdings)'s Beneish M-Score or its related term are showing as below:

HKSE:02689' s Beneish M-Score Range Over the Past 10 Years
Min: -3.11 Med: -2.46 Max: -1.45
Current: -1.45

During the past 13 years, the highest Beneish M-Score of Nine Dragons Paper (Holdings) was -1.45. The lowest was -3.11. And the median was -2.46.

Nine Dragons Paper (Holdings) Beneish M-Score Historical Data

The historical data trend for Nine Dragons Paper (Holdings)'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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Nine Dragons Paper (Holdings) Beneish M-Score Chart

Nine Dragons Paper (Holdings) Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Beneish M-Score

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-2.61

-3.10

-1.78

-2.31

-1.45

Nine Dragons Paper (Holdings) 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															-	-2.31	-	-1.45	-

Competitive Comparison of Nine Dragons Paper (Holdings)'s Beneish M-Score

For the Paper & Paper Products subindustry, Nine Dragons Paper (Holdings)'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.

Nine Dragons Paper (Holdings)'s Beneish M-Score Distribution in the Forest Products Industry

For the Forest Products industry and Basic Materials sector, Nine Dragons Paper (Holdings)'s Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Nine Dragons Paper (Holdings)'s Beneish M-Score falls into.

Nine Dragons Paper (Holdings) 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 Nine Dragons Paper (Holdings) 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 * 1.0195

0.528 * 4.0171

0.404 * 1.0822

0.892 * 0.8203

0.115 * 0.9769

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.25

4.679 * -0.077147

0.327 * 1.1486

-1.45

This Year (Jun23) TTM:

Last Year (Jun22) TTM:

Total Receivables was HK$5,477 Mil.
Revenue was HK$62,060 Mil.
Gross Profit was HK$1,674 Mil.
Total Current Assets was HK$32,217 Mil.
Total Assets was HK$131,966 Mil.
Property, Plant and Equipment(Net PPE) was HK$94,730 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$4,138 Mil.
Selling, General, & Admin. Expense(SGA) was HK$5,142 Mil.
Total Current Liabilities was HK$30,703 Mil.
Long-Term Debt & Capital Lease Obligation was HK$47,253 Mil.
Net Income was HK$-2,607 Mil.
Gross Profit was HK$0 Mil.
Cash Flow from Operations was HK$7,574 Mil.

Total Receivables was HK$6,548 Mil.
Revenue was HK$75,651 Mil.
Gross Profit was HK$8,196 Mil.
Total Current Assets was HK$38,239 Mil.
Total Assets was HK$125,520 Mil.
Property, Plant and Equipment(Net PPE) was HK$82,870 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$3,533 Mil.
Selling, General, & Admin. Expense(SGA) was HK$5,015 Mil.
Total Current Liabilities was HK$21,324 Mil.
Long-Term Debt & Capital Lease Obligation was HK$43,233 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)
	=	(5476.571 / 62060.496)	/	(6548.463 / 75651.434)
	=	0.088246	/	0.086561
	=	1.0195

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)
	=	(8195.868 / 75651.434)	/	(1673.718 / 62060.496)
	=	0.108337	/	0.026969
	=	4.0171

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 - (32216.755 + 94730.197) / 131965.721)	/	(1 - (38238.822 + 82870.128) / 125519.927)
	=	0.038031	/	0.035142
	=	1.0822

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
	=	62060.496	/	75651.434
	=	0.8203

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))
	=	(3532.987 / (3532.987 + 82870.128))	/	(4138.182 / (4138.182 + 94730.197))
	=	0.04089	/	0.041855
	=	0.9769

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)
	=	(5142.256 / 62060.496)	/	(5014.586 / 75651.434)
	=	0.082859	/	0.066285
	=	1.25

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)
	=	((47253.434 + 30703.489) / 131965.721)	/	((43233.047 + 21324.013) / 125519.927)
	=	0.590736	/	0.514317
	=	1.1486

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
	=	(-2606.89 - 0	-	7573.869)	/	131965.721
	=	-0.077147

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.

Nine Dragons Paper (Holdings) has a M-score of -1.45 signals that the company is likely to be a manipulator.

Nine Dragons Paper (Holdings) Beneish M-Score Related Terms

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Nine Dragons Paper (Holdings) (HKSE:02689) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Forest Products » Nine Dragons Paper (Holdings) Ltd (HKSE:02689) » Definitions » Beneish M-Score

Traded in Other Exchanges

NDGPY:USA NDGPF:USA N3Y:Germany

Address

No.12, Xincheng Road, Songshan Lake High-Tech Industrial Development Zone, Guangdong Province, Dongguan, CHN

Website

http://www.ndpaper.com

Nine Dragons Paper (Holdings) Ltd operates as a paper products manufacturer. The company predominantly produces liner board, corrugating medium, and coated duplex boards. In addition to packaging paperboard, the Group is also engaged in the production of printing and writing a paper in Dongguan and Taicang and the development of packaging paperboard and specialty paper production in Leshan, Sichuan Province. Substantial part of the company's revenues are generated from the sale of packaging paper and the rest from sales of printing and writing paper, high-value specialty paper products, and Pulp.

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