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WH Group (HKSE:00288) Beneish M-Score : -2.94 (As of May. 12, 2024)


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What is WH Group 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 -2.94 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

HKSE:00288' s Beneish M-Score Range Over the Past 10 Years
Min: -2.99   Med: -2.6   Max: -2.4
Current: -2.94

During the past 11 years, the highest Beneish M-Score of WH Group was -2.40. The lowest was -2.99. And the median was -2.60.


WH Group Beneish M-Score Historical Data

The historical data trend for WH Group'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.

* Premium members only.

WH Group Beneish M-Score Chart

WH Group Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.64 -2.60 -2.54 -2.58 -2.94

WH Group Quarterly Data
Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22 Sep22 Dec22 Jun23 Sep23 Dec23
Beneish M-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - -2.58 - - -2.94

Competitive Comparison of WH Group's Beneish M-Score

For the Packaged Foods subindustry, WH Group'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.


WH Group's Beneish M-Score Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, WH Group's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where WH Group's Beneish M-Score falls into.



WH Group 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 WH Group for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.8262+0.528 * 0.9419+0.404 * 1.0387+0.892 * 0.9354+0.115 * 1.0248
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0511+4.679 * -0.051515-0.327 * 0.9352
=-2.94

* 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$10,746 Mil.
Revenue was HK$204,898 Mil.
Gross Profit was HK$40,025 Mil.
Total Current Assets was HK$57,121 Mil.
Total Assets was HK$149,784 Mil.
Property, Plant and Equipment(Net PPE) was HK$56,926 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$6,084 Mil.
Selling, General, & Admin. Expense(SGA) was HK$22,383 Mil.
Total Current Liabilities was HK$36,378 Mil.
Long-Term Debt & Capital Lease Obligation was HK$19,626 Mil.
Net Income was HK$4,912 Mil.
Gross Profit was HK$0 Mil.
Cash Flow from Operations was HK$12,628 Mil.
Total Receivables was HK$13,905 Mil.
Revenue was HK$219,050 Mil.
Gross Profit was HK$40,305 Mil.
Total Current Assets was HK$62,353 Mil.
Total Assets was HK$154,579 Mil.
Property, Plant and Equipment(Net PPE) was HK$56,717 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$6,228 Mil.
Selling, General, & Admin. Expense(SGA) was HK$22,765 Mil.
Total Current Liabilities was HK$38,810 Mil.
Long-Term Debt & Capital Lease Obligation was HK$22,990 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)
=(10746.285 / 204897.913) / (13904.724 / 219050.014)
=0.052447 / 0.063477
=0.8262

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)
=(40305.016 / 219050.014) / (40025.225 / 204897.913)
=0.183999 / 0.195342
=0.9419

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 - (57120.877 + 56925.632) / 149784.154) / (1 - (62353.269 + 56716.639) / 154579.117)
=0.238594 / 0.229715
=1.0387

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
=204897.913 / 219050.014
=0.9354

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))
=(6228.32 / (6228.32 + 56716.639)) / (6083.834 / (6083.834 + 56925.632))
=0.098949 / 0.096554
=1.0248

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)
=(22382.887 / 204897.913) / (22764.51 / 219050.014)
=0.109239 / 0.103924
=1.0511

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)
=((19626.027 + 36378.048) / 149784.154) / ((22990.286 + 38810.219) / 154579.117)
=0.373899 / 0.399799
=0.9352

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
=(4912.364 - 0 - 12628.447) / 149784.154
=-0.051515

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.

WH Group has a M-score of -2.94 suggests that the company is unlikely to be a manipulator.


WH Group Beneish M-Score Related Terms

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WH Group (HKSE:00288) Business Description

Traded in Other Exchanges
Address
1 Austin Road West, Unit 7602B-7604A, Level 76, International Commerce Centre, Kowloon, Hong Kong, HKG
WH Group, listed on the Hong Kong exchange, is a holding company and the world's largest vertically integrated producer of pork and related packaged meat products. Its revenue is mainly derived from activities undertaken by its China and U.S. operations, which are respectively via 70.3%-owned Henan Shuanghui Investment & Development Co., or Shuanghui, and wholly owned Smithfield Foods Inc. In the U.S., its key packaged meats brands, in which it has an 8% market share, include Nathan's hot dogs, Armour, John Morrell, and Curly's, while in China, products are mainly under the Shuanghui brand, where it also has a 32% market share. We expect the company's operating profit to be split almost equally between the U.S. and China going forward with a small contribution from Europe.

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