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Cheung Kong Holdings Ltd (OTCPK:CHEUY)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Cheung Kong Holdings Ltd has an F-score of 7 indicating the company's financial situation is typical for a stable company.

CHEUY' s 10-Year Piotroski F-Score Range
Min: 2   Max: 7
Current: 7

2
7

During the past 13 years, the highest Piotroski F-Score of Cheung Kong Holdings Ltd was 7. The lowest was 2. And the median was 6.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was $4,637 Mil.
Cash Flow from Operations was $915 Mil.
Revenue was $2,769 Mil.
Gross Profit was $1,740 Mil.
Average Total Assets from the begining of this year (Dec12)
to the end of this year (Dec13) was (52460.3379337 + 55276.7465842) / 2 = $53,869 Mil.
Total Assets was $55,277 Mil.
Long-Term Debt was $5,085 Mil.
Total Current Assets was $15,108 Mil.
Total Current Liabilities was $1,994 Mil.
Net Income was $4,180 Mil.

Revenue was $2,758 Mil.
Gross Profit was $1,492 Mil.
Average Total Assets from the begining of last year (Dec11)
to the end of last year (Dec12) was (48078.5879928 + 52460.3379337) / 2 = $50,269 Mil.
Total Assets was $52,460 Mil.
Long-Term Debt was $5,546 Mil.
Total Current Assets was $13,459 Mil.
Total Current Liabilities was $2,604 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Cheung Kong Holdings Ltd's current net income (ttm) was 4,637. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Cheung Kong Holdings Ltd's current cash flow from operations (ttm) was 915. ==> Positive ==> Score 1.

Q3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income (TTM)/Average Total Assets from Dec12 to Dec13
=4636.76205208/53868.5422589
=0.08607551

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Dec11 to Dec12
=4180.05933187/50269.4629632
=0.08315305

Cheung Kong Holdings Ltd's return on assets of this year was 0.08607551. Cheung Kong Holdings Ltd's return on assets of last year was 0.08315305. ==> This year is higher. ==> Score 1.

Q4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA =< ROA.

Cheung Kong Holdings Ltd's current net income (ttm) was 4,637. Cheung Kong Holdings Ltd's current cash flow from operations (ttm) was 915. ==> 915 =< 4,637 ==> CFROA =< ROA ==> Score 0.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Dec13)=Long-Term Debt/Total Assets
=5085.33127095/55276.7465842
=0.09199766

Gearing (Last Year: Dec12)=Long-Term Debt/Total Assets
=5546.36914743/52460.3379337
=0.105725

Cheung Kong Holdings Ltd's gearing of this year was 0.09199766. Cheung Kong Holdings Ltd's gearing of last year was 0.105725. ==> This year is lower or equal to last year. ==> Score 1.

Q6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Dec13)=Total Current Assets/Total Current Liabilities
=15107.6308327/1993.55503996
=7.57823613

Current Ratio (Last Year: Dec12)=Total Current Assets/Total Current Liabilities
=13458.6611634/2604.02424868
=5.16840854

Cheung Kong Holdings Ltd's current ratio of this year was 7.57823613. Cheung Kong Holdings Ltd's current ratio of last year was 5.16840854. ==> This year's current ratio is higher. ==> Score 1.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Cheung Kong Holdings Ltd's number of shares in issue this year was 2316.2. Cheung Kong Holdings Ltd's number of shares in issue last year was 2316.2. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Q8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=1739.75251353/2768.75483372
=0.62835196

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1492.19656907/2757.51322069
=0.5411385

Cheung Kong Holdings Ltd's gross margin of this year was 0.62835196. Cheung Kong Holdings Ltd's gross margin of last year was 0.5411385. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Average Total Assets from Dec12 to Dec13
=2768.75483372/53868.5422589
=0.05139836

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Dec11 to Dec12
=2757.51322069/50269.4629632
=0.05485464

Cheung Kong Holdings Ltd's asset turnover of this year was 0.05139836. Cheung Kong Holdings Ltd's asset turnover of last year was 0.05485464. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+0+1+1+1+1+0
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Cheung Kong Holdings Ltd has an F-score of 7 indicating the company's financial situation is typical for a stable company.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities, Altman Z-Score, Beneish M-Score


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Cheung Kong Holdings Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 0101011001
Q3 1111
Q4 0000
Q5 0101
Q6 0100
Q7 1111
Q8 1111
Q9 1011
F-score 5757
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