Fact based stock research
China Development Financial (TSEC:2883)

TW0002883006

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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China Development Financial stock research in summary

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ANALYSIS: With an Obermatt Combined Rank of 61 (better than 61% compared with investment alternatives), China Development Financial (Life & Health Insurance, Taiwan) shares have above-average financial characteristics compared with similar stocks. Shares of China Development Financial are a good value (attractively priced) with a consolidated Value Rank of 55 (better than 55% of alternatives), are safely financed (Safety Rank of 85, which means low debt burdens), but show below-average growth (Growth Rank of 27). ...read more

RECOMMENDATION: A Combined Rank of 61, is a buy recommendation based on China Development Financial's financial characteristics. As the company China Development Financial's key financial metrics exhibit good value (Obermatt Value Rank of 55) but low growth (Obermatt Growth Rank of 27) while being safely financed (Obermatt Safety Rank of 85), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 55% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	n/a
Growth Rank	n/a
Safety Rank	n/a
Combined Rank	n/a

Country	Taiwan
Industry	Life & Health Insurance
Index	FTSE Taiwan
Size class	X-Large

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Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: China Development Financial

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	58	19	56	n/a
GROWTH
GROWTH	53	100	31	n/a
SAFETY
SAFETY	97	85	85	n/a
SENTIMENT
SENTIMENT	n/a	31	40	^new
360° VIEW
360° VIEW	n/a	53	7	^new

Most recent update of the stock research: . Financial reporting date used for calculating ranks: . Stock research history is based on the Obermatt Method. The higher the rank, the better China Development Financial is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	58	19	56	n/a
GROWTH
GROWTH	53	100	31	n/a
SAFETY
SAFETY	97	85	85	n/a
COMBINED
COMBINED	97	61	61	n/a

Last update of combined financial performance: . Stock analysis on combined financial performance: The higher the rank of China Development Financial the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 55 (better than 55% compared with alternatives), China Development Financial shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for China Development Financial. Price-to-Profit (also referred to as price-earnings, P/E) is 84 which means that the stock price compared with what market professionals expect for future profits is lower than for 84% of comparable companies, indicating a good value concerning China Development Financial's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 35, which means that the stock price is lower as regards to invested capital than for 35% of comparable investments. On the other hand, Price-to-Sales is less favorable than 72% of alternatives (only 28% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 33% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 55, is a buy recommendation based on China Development Financial's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	80	36	29	n/a
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	50	39	79	n/a
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	36	26	36	n/a
DIVIDEND YIELD
DIVIDEND YIELD	34	15	72	n/a
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	58	19	56	n/a

Last update of Value Rank: . Stock analysis on value ratios: The higher the rank, the lower the value ratio of China Development Financial; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), China Development Financial shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for China Development Financial. Sales Growth has a rank of 90, which means that, currently, professionals expect the company to grow more than 90% of its competitors. Profit Growth with a rank of 85 is also above average. But Capital Growth has only a rank of 1, and Stock Returns with 5 are also below-average. Stock returns for China Development Financial have recently been below 95% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for China Development Financial. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with the Obermatt Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	4	100	93	n/a
PROFIT GROWTH
PROFIT GROWTH	97	82	85	n/a
CAPITAL GROWTH
CAPITAL GROWTH	n/a	47	1	n/a
STOCK RETURNS
STOCK RETURNS	100	100	3	n/a
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	53	100	31	n/a

Last update of Growth Rank: . Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of China Development Financial.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 85 (better than 85% compared with alternatives) for 2023, the company China Development Financial has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of China Development Financial is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for China Development Financial. Refinancing is at 97, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 97% of its competitors. Liquidity is also good at 97, meaning the company generates more profit to service its debt than 97% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 22, which means the company has an above-average debt-to-equity ratio. It has more debt than 78% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 85 (better than 85% compared with alternatives), China Development Financial has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and China Development Financial could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with China Development Financial and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	88	15	18	n/a
REFINANCING
REFINANCING	72	97	97	n/a
LIQUIDITY
LIQUIDITY	91	67	93	n/a
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	97	85	85	n/a

Last update of Safety Rank: . Stock analysis on safety metrics: The higher the rank, the lower the leverage of China Development Financial and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	59	30	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	9	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	20	16	^new
MARKET PULSE
MARKET PULSE	n/a	88	89	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	31	40	^new

Last update of Sentiment Rank: . Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for China Development Financial.
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