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Tan Chong International (HKSE:00693) Financial Strength : 5 (As of Dec. 2023)


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What is Tan Chong International Financial Strength?

Tan Chong International has the Financial Strength Rank of 5.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Tan Chong International's Interest Coverage for the quarter that ended in Dec. 2023 was 2.30. Tan Chong International's debt to revenue ratio for the quarter that ended in Dec. 2023 was 0.65. As of today, Tan Chong International's Altman Z-Score is 1.41.


Competitive Comparison of Tan Chong International's Financial Strength

For the Auto & Truck Dealerships subindustry, Tan Chong International's Financial Strength, along with its competitors' market caps and Financial Strength 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.


Tan Chong International's Financial Strength Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Tan Chong International's Financial Strength distribution charts can be found below:

* The bar in red indicates where Tan Chong International's Financial Strength falls into.



Tan Chong International Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

Tan Chong International's Interest Expense for the months ended in Dec. 2023 was HK$-112 Mil. Its Operating Income for the months ended in Dec. 2023 was HK$258 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was HK$3,171 Mil.

Tan Chong International's Interest Coverage for the quarter that ended in Dec. 2023 is

Interest Coverage=-1*Operating Income (Q: Dec. 2023 )/Interest Expense (Q: Dec. 2023 )
=-1*257.601/-111.8
=2.30

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Tan Chong International's Debt to Revenue Ratio for the quarter that ended in Dec. 2023 is

Debt to Revenue Ratio=Total Debt (Q: Dec. 2023 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(5243.353 + 3170.945) / 13019.908
=0.65

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Tan Chong International has a Z-score of 1.41, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of 1.41 is in distress zone. This implies bankruptcy possibility in the next two years.

* 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.


Tan Chong International  (HKSE:00693) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Tan Chong International has the Financial Strength Rank of 5.


Tan Chong International Financial Strength Related Terms

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Tan Chong International (HKSE:00693) Business Description

Traded in Other Exchanges
Address
6-8 Harbour Road, Unit 3001, 30th Floor, Shui On Centre, Wanchai, Hong Kong, HKG
Tan Chong International Ltd is an automobile dealer. It offers vehicles of Nissan brand in Singapore, Hong Kong, China and Thailand. The company has five business lines namely, Motor vehicle distribution and dealership business, Heavy commercial vehicle and industrial equipment distribution business, Property rentals and development, Transportation and Other operations which include investment holding, hire purchase financing, provision of workshop services and the manufacturing of vehicle seats. The company generates the majority of revenue from Motor vehicle distribution and dealership business.

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