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CStone Pharmaceuticals (HKSE:02616) Probability of Financial Distress (%) : 0.31% (As of Dec. 12, 2024)


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What is CStone Pharmaceuticals 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, CStone Pharmaceuticals's Probability of Financial Distress (%) is 0.31%.

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 CStone Pharmaceuticals's Probability of Financial Distress (%)

For the Biotechnology subindustry, CStone Pharmaceuticals'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.


CStone Pharmaceuticals's Probability of Financial Distress (%) Distribution in the Biotechnology Industry

For the Biotechnology industry and Healthcare sector, CStone Pharmaceuticals's Probability of Financial Distress (%) distribution charts can be found below:

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



CStone Pharmaceuticals 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
=-5.77

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

PFD=1/(1 + e^(-LPFD))*100%
=0.31%

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).


CStone Pharmaceuticals  (HKSE:02616) 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.


CStone Pharmaceuticals Probability of Financial Distress (%) Related Terms

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CStone Pharmaceuticals Business Description

Industry
Traded in Other Exchanges
Address
218 Xinghu Street, C1 Building, North Block, Suzhou Industrial Park, Suzhou, CHN, 215123
CStone Pharmaceuticals is engaged in the development and commercialization of tumor immunotherapy and molecular-targeted drugs. It has been operating in one reportable segment, the research and development of complex biopharmaceutical products.
Executives
Yang Jianxin 2101 Beneficial owner
Su Zhou Gong Ye Yuan Qu Zheng Ze Yuan Shi Chuang Ye Tou Zi Qi Ye You Xian He Huo 2101 Beneficial owner
Su Zhou Gong Ye Yuan Qu Zheng Ze Ji Ming Gu Quan Tou Zi Guan Li You Xian Gong Si 2201 Interest of corporation controlled by you
Su Zhou Gong Ye Yuan Qu Zheng Ze Jian Kang Chuang Ye Tou Zi Guan Li Zhong Xin You Xian He Huo 2501 Other
Su Zhou Gong Ye Yuan Qu Yuan He Yuan Dian Chuang Ye Tou Zi Guan Li You Xian Gong Si 2201 Interest of corporation controlled by you
Su Zhou Gong Ye Yuan Qu Guan Wei Hui 2201 Interest of corporation controlled by you
Su Zhou Gong Ye Yuan Qu Jing Ji Fa Zhan You Xian Gong Si 2201 Interest of corporation controlled by you
Fei Jianjiang 2201 Interest of corporation controlled by you
Su Zhou Yuan He Kong Gu Gu Fen You Xian Gong Si 2201 Interest of corporation controlled by you
Wuxi Healthcare Ventures Ii, L.p. 2101 Beneficial owner
Wuxi Healthcare Management, Llc 2201 Interest of corporation controlled by you
Morgan Stanley 2201 Interest of corporation controlled by you
Gic Private Limited 2102 Investment manager
Jiang Frank Ningjun 2307 Founder of a discretionary trust who can infl
Graceful Beauty Limited 2101 Beneficial owner

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