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Shifang Holding (HKSE:01831) Probability of Financial Distress (%) : 11.38% (As of Mar. 05, 2025)


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What is Shifang Holding Probability of Financial Distress (%)?

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, Shifang Holding's Probability of Financial Distress (%) is 11.38%.

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.


Competitive Comparison of Shifang Holding's Probability of Financial Distress (%)

For the Advertising Agencies subindustry, Shifang Holding'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.


Shifang Holding's Probability of Financial Distress (%) Distribution in the Media - Diversified Industry

For the Media - Diversified industry and Communication Services sector, Shifang Holding's Probability of Financial Distress (%) distribution charts can be found below:

* The bar in red indicates where Shifang Holding's Probability of Financial Distress (%) falls into.



Shifang Holding 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
=-2.05

The Probability of Financial Distress (%) (PFD) was then obtianed by:

PFD=1/(1 + e^(-LPFD))*100%
=11.38%

The eight explanatory variables are:

1. NIMTAAVG = Net Income to Market Total Assets

NIMTAAVG=Net Income / Market Total Assets
=Net Income / (Market Cap + Total Liabilities)

*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.

2. TLMTA = Total liabilities to Market Total Assets

TLMTA=Total Liabilities / Market Total Assets

3. CASHMTA = Cash to Market Total Assets

For non-financial companies, CASHMTA is measured as:

CASHMTA=Cash, Cash Equivalents, Marketable Securities / Market Total Assets

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).

6. RSIZE = Relative Size

RSIZE=log (Market Cap / Total Market Cap of S&P 500 companies)

7. MB = Market to Adjusted Book Equity Ratio


8. PRICE

PRICE is measured as the log of the stock price, capped at log(15).


Shifang Holding  (HKSE:01831) 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.


Shifang Holding Probability of Financial Distress (%) Related Terms

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Shifang Holding Business Description

Traded in Other Exchanges
N/A
Address
No. 121 Gutian Road, 6th Floor, Hua Fu Mansion, Gulou District, Fujian Province, Fuzhou, CHN, 350005
Shifang Holding Ltd is an investment holding company engaged in the business of publishing and advertising in the People's Republic of China. The company operates in two business segments; Publishing and advertising segment includes the provision of advertising services, marketing and consulting services, printing services, and agency commission from sales of service pack; The tourism and integrated developments segment include the provision of tourism and integrated services through its media, resort, and eco-tourism integrated development projects and sales of agricultural products, including the Yongtai Distinctive Town Project and Cooperative Project in YongFu Town. Maximum revenue is gained from Publishing and advertising segment. The company operates in the PRC.
Executives
Chen Zhi
Nian Jiaxing 2101 Beneficial owner
Sheng Ping Guo Ji Fa Zhan You Xian Gong Si
Forever Joy Investments Limited 2101 Beneficial owner
Xu Dan 2201 Interest of corporation controlled by you
Shenzhen Energy Gaofei Fund Management Co., Ltd 2101 Beneficial owner
Ye Xuejin 2201 Interest of corporation controlled by you
Victory Color International Investment Limited 2101 Beneficial owner
Wu Yufang 2201 Interest of corporation controlled by you

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