Hocheng (TPE:1810) Beneish M-Score : -2.87 (As of May. 16, 2024)

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What is Hocheng 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 -2.87 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

TPE:1810' s Beneish M-Score Range Over the Past 10 Years
Min: -2.95 Med: -2.58 Max: -1.91
Current: -2.87

During the past 13 years, the highest Beneish M-Score of Hocheng was -1.91. The lowest was -2.95. And the median was -2.58.

Hocheng Beneish M-Score Historical Data

The historical data trend for Hocheng'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.

* Premium members only.

Hocheng Beneish M-Score Chart

Hocheng Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.71

-2.75

-1.91

-2.55

-2.95

Hocheng Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-2.48	-2.73	-2.89	-2.95	-2.87

Competitive Comparison of Hocheng's Beneish M-Score

For the Furnishings, Fixtures & Appliances subindustry, Hocheng'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.

Hocheng's Beneish M-Score Distribution in the Furnishings, Fixtures & Appliances Industry

For the Furnishings, Fixtures & Appliances industry and Consumer Cyclical sector, Hocheng's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Hocheng's Beneish M-Score falls into.

Hocheng 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 Hocheng 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 * 1.0309

0.528 * 1.0418

0.404 * 1.2964

0.892 * 1.014

0.115 * 0.9606

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0231

4.679 * -0.117837

0.327 * 1.0325

-2.87

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was NT$1,175 Mil.
Revenue was 1133.532 + 1264.741 + 1208.483 + 1302.563 = NT$4,909 Mil.
Gross Profit was 267.093 + 334.701 + 276.502 + 324.739 = NT$1,203 Mil.
Total Current Assets was NT$4,266 Mil.
Total Assets was NT$10,573 Mil.
Property, Plant and Equipment(Net PPE) was NT$3,570 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$234 Mil.
Selling, General, & Admin. Expense(SGA) was NT$1,111 Mil.
Total Current Liabilities was NT$3,255 Mil.
Long-Term Debt & Capital Lease Obligation was NT$110 Mil.
Net Income was -17.944 + 37.028 + -13.283 + 8.419 = NT$14 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = NT$0 Mil.
Cash Flow from Operations was -36.74 + 60.334 + 636.677 + 599.809 = NT$1,260 Mil.

Total Receivables was NT$1,124 Mil.
Revenue was 1095 + 1240.116 + 1162.236 + 1344.325 = NT$4,842 Mil.
Gross Profit was 264.224 + 330.305 + 295.28 + 346.244 = NT$1,236 Mil.
Total Current Assets was NT$4,295 Mil.
Total Assets was NT$9,981 Mil.
Property, Plant and Equipment(Net PPE) was NT$3,693 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$232 Mil.
Selling, General, & Admin. Expense(SGA) was NT$1,071 Mil.
Total Current Liabilities was NT$2,589 Mil.
Long-Term Debt & Capital Lease Obligation was NT$488 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)
	=	(1174.661 / 4909.319)	/	(1123.698 / 4841.677)
	=	0.239272	/	0.232089
	=	1.0309

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)
	=	(1236.053 / 4841.677)	/	(1203.035 / 4909.319)
	=	0.255294	/	0.245051
	=	1.0418

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 - (4265.799 + 3570.404) / 10572.718)	/	(1 - (4295.193 + 3692.948) / 9980.798)
	=	0.258828	/	0.199649
	=	1.2964

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
	=	4909.319	/	4841.677
	=	1.014

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))
	=	(231.892 / (231.892 + 3692.948))	/	(234.006 / (234.006 + 3570.404))
	=	0.059083	/	0.061509
	=	0.9606

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)
	=	(1110.834 / 4909.319)	/	(1070.784 / 4841.677)
	=	0.22627	/	0.22116
	=	1.0231

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)
	=	((110.14 + 3255.182) / 10572.718)	/	((488.039 + 2588.947) / 9980.798)
	=	0.318302	/	0.308291
	=	1.0325

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
	=	(14.22 - 0	-	1260.08)	/	10572.718
	=	-0.117837

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.

Hocheng has a M-score of -2.87 suggests that the company is unlikely to be a manipulator.

Hocheng Beneish M-Score Related Terms

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Hocheng (TPE:1810) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Furnishings, Fixtures & Appliances » Hocheng Corp (TPE:1810) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 398, Xingshan Road, First floor, Neihu District, Taipei, TWN, 11469

Website

https://www.hcg.com.tw

Hocheng Corp is a Taiwan-based company, that engages in the manufacture and sale of bathroom fixtures, kitchen equipment, and shower enclosures. The company products include hygiene porcelains, water supply copper wares, bathtubs and table boards, toilet covers, kitchenware, and ceramic plates, among others. Its hygiene porcelains include toilets, water tanks, washbasins, sewage basins, and urine buckets. The Group has four reportable departments: the Taiwan business department, the investment department, the China business department, and the Philippine business department.

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