China Railway Construction (SHSE:601186) Beneish M-Score : -2.19 (As of Dec. 11, 2024)

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What is China Railway Construction 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 -2.19 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

SHSE:601186' s Beneish M-Score Range Over the Past 10 Years
Min: -5.26 Med: -2.35 Max: 0.66
Current: -2.19

During the past 13 years, the highest Beneish M-Score of China Railway Construction was 0.66. The lowest was -5.26. And the median was -2.35.

China Railway Construction Beneish M-Score Historical Data

The historical data trend for China Railway Construction'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.

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China Railway Construction Beneish M-Score Chart

China Railway Construction Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.31

-2.39

0.66

-2.47

-2.40

China Railway Construction Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Beneish M-Score	Get a 7-Day Free Trial															-2.40	-2.40	-2.37	-2.24	-2.19

Competitive Comparison of China Railway Construction's Beneish M-Score

For the Engineering & Construction subindustry, China Railway Construction'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.

China Railway Construction's Beneish M-Score Distribution in the Construction Industry

For the Construction industry and Industrials sector, China Railway Construction's Beneish M-Score distribution charts can be found below:

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

China Railway Construction 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 Railway Construction 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 * 1.1093

0.528 * 0.9955

0.404 * 1.1252

0.892 * 0.9867

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.8209

4.679 * 0.026403

0.327 * 1.0163

-2.19

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was ¥580,126 Mil.
Revenue was 241988.402 + 241187.926 + 274948.792 + 331530.291 = ¥1,089,655 Mil.
Gross Profit was 22367.01 + 25652.865 + 21413.612 + 44395.667 = ¥113,829 Mil.
Total Current Assets was ¥1,139,108 Mil.
Total Assets was ¥1,810,274 Mil.
Property, Plant and Equipment(Net PPE) was ¥86,010 Mil.
Depreciation, Depletion and Amortization(DDA) was ¥0 Mil.
Selling, General, & Admin. Expense(SGA) was ¥7,849 Mil.
Total Current Liabilities was ¥1,090,821 Mil.
Long-Term Debt & Capital Lease Obligation was ¥254,816 Mil.
Net Income was 3793.281 + 5877.154 + 6025.004 + 6677.431 = ¥22,373 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = ¥0 Mil.
Cash Flow from Operations was -7341.719 + -35082.373 + -46593.91 + 63594.622 = ¥-25,423 Mil.

Total Receivables was ¥530,033 Mil.
Revenue was 265403.204 + 267521.446 + 273538.545 + 297891.327 = ¥1,104,355 Mil.
Gross Profit was 25726.043 + 26937.177 + 21251.517 + 40930.605 = ¥114,845 Mil.
Total Current Assets was ¥1,113,427 Mil.
Total Assets was ¥1,681,665 Mil.
Property, Plant and Equipment(Net PPE) was ¥85,122 Mil.
Depreciation, Depletion and Amortization(DDA) was ¥0 Mil.
Selling, General, & Admin. Expense(SGA) was ¥9,689 Mil.
Total Current Liabilities was ¥1,029,462 Mil.
Long-Term Debt & Capital Lease Obligation was ¥200,542 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)
	=	(580126.32 / 1089655.411)	/	(530033.169 / 1104354.522)
	=	0.532394	/	0.479948
	=	1.1093

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)
	=	(114845.342 / 1104354.522)	/	(113829.154 / 1089655.411)
	=	0.103993	/	0.104463
	=	0.9955

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 - (1139107.89 + 86009.63) / 1810274.491)	/	(1 - (1113426.775 + 85121.809) / 1681665.291)
	=	0.323242	/	0.287285
	=	1.1252

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
	=	1089655.411	/	1104354.522
	=	0.9867

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))
	=	(0 / (0 + 85121.809))	/	(0 / (0 + 86009.63))
	=	0	/	0
	=	1

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)
	=	(7848.59 / 1089655.411)	/	(9689.475 / 1104354.522)
	=	0.007203	/	0.008774
	=	0.8209

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)
	=	((254815.857 + 1090821.011) / 1810274.491)	/	((200542.071 + 1029462.309) / 1681665.291)
	=	0.743333	/	0.73142
	=	1.0163

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
	=	(22372.87 - 0	-	-25423.38)	/	1810274.491
	=	0.026403

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 Railway Construction has a M-score of -2.19 suggests that the company is unlikely to be a manipulator.

China Railway Construction Beneish M-Score Related Terms

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China Railway Construction Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Construction » China Railway Construction Corp Ltd (SHSE:601186) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

01186:Hong Kong 4FF:Germany

Address

East, No. 40 Fuxing Road, Haidian District, Beijing, CHN, 100855

Website

https://www.crcc.cn

China Railway Construction Corp Ltd operates as an infrastructure construction firm. It largely derives contracting revenue. It builds railways, highways and municipal works, such as subways and light rail systems. The company also engages in survey and design, manufacturing, logistics, and property development. It operates the following business segment: Construction, Planning & Design, manufacturing and Real Estate; and Other Business Operations. Most of the firm's revenue gets dominated by the Construction segment that engages in the construction of infrastructure such as railways, highways, metropolitan railways, and real estate projects.

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