CHC
ConstructionValuation Breakdown
Construction and industrial firms have characteristics of both cyclical businesses (lumpy project-based revenue) and growth companies (expanding order books). This model blends two approaches 50/50: EV/EBITDA valuation (captures current earning power relative to peers) and FCF-based DCF (captures future cash generation potential). If EV/EBITDA produces a negative value (debt exceeds enterprise value), only DCF is used.
Valuation Track Record
Retroactive intrinsic value vs actual close price — CHC
Earnings Quality
Fiscal year 2025
Financial Forensics
Beneish M-Score · 2025
The Beneish M-Score of -2.654 indicates a low likelihood of earnings manipulation, as it is well below the manipulation threshold of -1.78. However, the earnings quality score of 30.3/100, particularly the zero scores in cash conversion and revenue quality, raises concerns about the sustainability of reported earnings.
- Earnings Quality Score of 30.3/100, indicating poor earnings quality.
- Cash conversion score of 0.0/100 suggests significant issues in converting earnings to cash.
- Revenue quality score of 0.0/100 raises concerns about the legitimacy of revenue recognition.
- Beneish M-Score of -2.654 suggests a lower likelihood of earnings manipulation.
- DSRI of 0.8591 indicates that inventory levels are well managed relative to sales.
With 51.0% ownership by a state-owned enterprise, there is a potential risk of political influence impacting corporate governance and decision-making. However, this also provides stability and access to resources.
Investors should closely monitor cash flow and revenue recognition practices, given the low earnings quality scores. It may be prudent to adopt a cautious approach until improvements in cash conversion and revenue legitimacy are observed.
Generated by AI based on quantitative data. Not financial advice.
Quantitative Scores
Key Ratios
Company Overview
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