China Success Finance Group Holdings (HKSE:03623) Beneish M-Score : -3.82 (As of May. 21, 2024)

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What is China Success Finance Group Holdings Beneish M-Score?

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

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 -3.82 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for China Success Finance Group Holdings's Beneish M-Score or its related term are showing as below:

HKSE:03623' s Beneish M-Score Range Over the Past 10 Years
Min: -5.99 Med: -3.55 Max: 1
Current: -3.82

During the past 12 years, the highest Beneish M-Score of China Success Finance Group Holdings was 1.00. The lowest was -5.99. And the median was -3.55.

China Success Finance Group Holdings 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 China Success Finance Group Holdings 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

0.528 * 1

0.404 * 0.9309

0.892 * 0.2304

0.115 * 1.043

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 2.7946

4.679 * -0.06632

0.327 * 1.0447

-3.82

* 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.

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was HK$0.00 Mil.
Revenue was HK$17.11 Mil.
Gross Profit was HK$17.11 Mil.
Total Current Assets was HK$0.00 Mil.
Total Assets was HK$705.42 Mil.
Property, Plant and Equipment(Net PPE) was HK$233.21 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$12.93 Mil.
Selling, General, & Admin. Expense(SGA) was HK$56.41 Mil.
Total Current Liabilities was HK$0.00 Mil.
Long-Term Debt & Capital Lease Obligation was HK$190.52 Mil.
Net Income was HK$-36.56 Mil.
Gross Profit was HK$0.00 Mil.
Cash Flow from Operations was HK$10.23 Mil.

Total Receivables was HK$0.00 Mil.
Revenue was HK$74.27 Mil.
Gross Profit was HK$74.27 Mil.
Total Current Assets was HK$0.00 Mil.
Total Assets was HK$825.86 Mil.
Property, Plant and Equipment(Net PPE) was HK$231.96 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$13.44 Mil.
Selling, General, & Admin. Expense(SGA) was HK$87.63 Mil.
Total Current Liabilities was HK$0.00 Mil.
Long-Term Debt & Capital Lease Obligation was HK$213.51 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)
	=	(0 / 17.108)	/	(0 / 74.268)
	=	0	/	0
	=	1

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)
	=	(74.268 / 74.268)	/	(17.108 / 17.108)
	=	1	/	1
	=	1

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 - (0 + 233.206) / 705.417)	/	(1 - (0 + 231.956) / 825.863)
	=	0.669407	/	0.719135
	=	0.9309

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
	=	17.108	/	74.268
	=	0.2304

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))
	=	(13.443 / (13.443 + 231.956))	/	(12.928 / (12.928 + 233.206))
	=	0.05478	/	0.052524
	=	1.043

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)
	=	(56.412 / 17.108)	/	(87.631 / 74.268)
	=	3.297405	/	1.179929
	=	2.7946

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)
	=	((190.524 + 0) / 705.417)	/	((213.508 + 0) / 825.863)
	=	0.270087	/	0.258527
	=	1.0447

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
	=	(-36.555 - 0	-	10.228)	/	705.417
	=	-0.06632

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.

China Success Finance Group Holdings has a M-score of -3.82 suggests that the company is unlikely to be a manipulator.

China Success Finance Group Holdings Beneish M-Score Related Terms

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China Success Finance Group Holdings (HKSE:03623) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Diversified Financial Services » China Success Finance Group Holdings Ltd (HKSE:03623) » Definitions » Beneish M-Score

Traded in Other Exchanges

N/A

Address

28 Queen’s Road East, 604 6th Floor, Tesbury Centre, Wanchai, Hong Kong, HKG

Website

https://www.chinasuccessfinance.com

China Success Finance Group Holdings Ltd is an investment holding company. It is a guaranteed service provider offering financial and non-financial guarantee services, financial leasing, and financial consultancy services in China. The company's diversified business lines include asset management, fund management, investment and mergers and acquisitions, financial leasing, financing guarantee, overseas investment Capital, real estate finance, and microfinance The group operates two business segments: Financial services and Yangmianshan. The main business of Yangmianshan is sales of market hogs in the PRC business. The business operations of the company are carried out principally in the PRC.