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Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, China Modern Dairy Holdings's Probability of Financial Distress (%) is 0.15%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
China Modern Dairy Holdings (HKSE:01117) Probability of Financial Distress (%) Explanation
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk in the upcoming year. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
China Modern Dairy Holdings Probability of Financial Distress (%) Related Terms
HKSE:01117 vs ADM, BG, TSN: Probability of Financial Distress (%) Comparison
For the Farm Products subindustry, China Modern Dairy Holdings's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) 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.
China Modern Dairy Holdings Probability of Financial Distress (%) vs Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, China Modern Dairy Holdings's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where China Modern Dairy Holdings's Probability of Financial Distress (%) falls into.
China Modern Dairy Holdings Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
LPFD
=
-20.12 * NIMTAAVG
+
1.60 * TLMTA
-
7.88 * EXRETAVG
+
1.55 * SIGMA
-
0.005 * RSIZE
-
2.27 * CASHMTA
+
0.070 * MB
-
0.09 * PRICE
-
8.87
=
-6.50
The Probability of Financial Distress (%) (PFD) was then obtianed by:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
What does a Probability of Financial Distress (%) of 0.15% mean?
China Modern Dairy Holdings (HKSE:01117) has a Probability of Financial Distress (%) of 0.15% as of Aug. 31, 2026.
Is China Modern Dairy Holdings' Probability of Financial Distress (%) too high?
China Modern Dairy Holdings' current Probability of Financial Distress (%) is 0.15%. Overall, China Modern Dairy Holdings has a GF Score™ of 57/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does China Modern Dairy Holdings' Probability of Financial Distress (%) compare to ADM and BG?
China Modern Dairy Holdings' Probability of Financial Distress (%) of 0.15% can be compared against companies in the Consumer Packaged Goods industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Probability of Financial Distress (%) for a Consumer Packaged Goods company?
A good Probability of Financial Distress (%) depends on the Consumer Packaged Goods industry context. However, Probability of Financial Distress (%) should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Probability of Financial Distress (%) mean?
A high Probability of Financial Distress (%) can signal that a stock is expensive relative to its fundamentals. China Modern Dairy Holdings's current Probability of Financial Distress (%) is 0.15%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is China Modern Dairy Holdings stock overvalued right now?
Based on GuruFocus' analysis, China Modern Dairy Holdings (HKSE:01117) is currently considered Significantly Overvalued. The stock's GF Value™ is HK$0.96, compared to a current price of HK$1.56 — trading 62.5% above its estimated fair value. The current Probability of Financial Distress (%) is 0.15%. China Modern Dairy Holdings' overall GF Score™ is 57/100 with 10 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Probability of Financial Distress (%) calculated?
Probability of Financial Distress (%) is calculated from a company's financial statements. For China Modern Dairy Holdings (HKSE:01117), the current Probability of Financial Distress (%) is 0.15% as of Aug. 31, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is China Modern Dairy Holdings (HKSE:01117) Overvalued in 2026?
Based on GuruFocus' analysis, China Modern Dairy Holdings stock appears to be overvalued.
The current stock price of HK$1.56 is trading 62.5% above its estimated GF Value™ of HK$0.96.
GuruFocus considers China Modern Dairy Holdings to be Significantly Overvalued.
Key valuation signals for HKSE:01117:
Probability of Financial Distress (%): 0.15%
GF Value™: HK$0.96 vs. price of HK$1.56 (62.5% above fair value)
No single metric tells the full story. See the HKSE:01117 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
China Modern Dairy Holdings Ltd operates in the Chinese food industry. The business of the company includes the production of raw milk, and its revenue mainly depends on the sale of raw milk. The company produces and sells raw milk to customers for processing into dairy products, Liquid Milk, ice cream, formula milk and other dairy products business, which relates to its sale of liquid milk products. It also engaged in new business areas such as feed business, intelligent e-commerce platforms, and forage grass planting. The segments of the company are the Raw milk business and the integrated dairy farming solutions business. The company generates the majority of its revenue from the Raw milk business that engages in raising and breeding dairy cows to produce and sell raw milk.
57GF Score
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