Fact based stock research
Hotai Finance (TSEC:6592)

TW0006592009

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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.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Hotai Finance stock research in summary

hfcfinance.com.tw

ANALYSIS: With an Obermatt Combined Rank of 18 (worse than 82% compared with investment alternatives), Hotai Finance (Consumer Finance, Taiwan) shares have lower financial characteristics compared with similar stocks. Shares of Hotai Finance are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives) and show below-average growth (Growth Rank of 11) but are safely financed (Safety Rank of 72), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 18, is a sell recommendation based on Hotai Finance's financial characteristics. As the company Hotai Finance's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 35) and low growth (Obermatt Growth Rank of 11), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 72) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. 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	35
Growth Rank	11
Safety Rank	72
Combined Rank	18

Country	Taiwan
Industry	Consumer Finance
Index	FTSE Taiwan
Size class	Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

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

Research History: Hotai Finance

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	71	39	20	35
GROWTH
GROWTH	28	81	93	11
SAFETY
SAFETY	21	73	73	72
SENTIMENT
SENTIMENT	n/a	98	69	^new
360° VIEW
360° VIEW	n/a	99	84	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Hotai Finance is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	71	39	20	35
GROWTH
GROWTH	28	81	93	11
SAFETY
SAFETY	21	73	73	72
COMBINED
COMBINED	21	90	77	18

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Hotai Finance the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 35 (worse than 65% compared with alternatives), Hotai Finance shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Hotai Finance. Price-to-Sales (P/S) is 57, which means that the stock price compared with what market professionals expect for future sales is lower than 57% of comparable companies, indicating a good value concerning to Hotai Finance's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 37, meaning that dividends are expected to be lower than for 63% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 59% of alternatives (only 41% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 75% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 35, is a hold recommendation based on Hotai Finance's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Hotai Finance could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Hotai Finance looks like an expensive investment today. 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)	63	38	42	57
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	54	27	19	25
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	50	37	23	41
DIVIDEND YIELD
DIVIDEND YIELD	80	69	32	37
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	71	39	20	35

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Hotai Finance; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 11 (better than 11% compared with alternatives), Hotai Finance shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Hotai Finance. Only Capital Growth has a good rank of 96, which means that currently professionals expect the company to grow its invested capital more than 12% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 8 which means that currently professionals expect the company to grow less than 92% of its competitors. Profit Growth with a rank of 12 and Stock Returns with a rank of 5 are also low (below 95% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 11, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Hotai Finance is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. 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 Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	52	48	98	8
PROFIT GROWTH
PROFIT GROWTH	n/a	39	44	12
CAPITAL GROWTH
CAPITAL GROWTH	n/a	83	66	96
STOCK RETURNS
STOCK RETURNS	28	83	83	5
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	28	81	93	11

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Hotai Finance.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 72 (better than 72% compared with alternatives), the company Hotai Finance has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Hotai Finance 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 Hotai Finance. Refinancing is at 69, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 69% of its competitors. Liquidity is also good at 90, meaning the company generates more profit to service its debt than 90% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 18, which means the company has an above-average debt-to-equity ratio. It has more debt than 82% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 72 (better than 72% compared with alternatives), Hotai Finance has a financing structure that is 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 Hotai Finance 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 Hotai Finance 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	10	26	16	18
REFINANCING
REFINANCING	94	61	63	69
LIQUIDITY
LIQUIDITY	12	86	98	90
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	21	73	73	72

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Hotai Finance 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	100	100	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	1	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	80	27	^new
MARKET PULSE
MARKET PULSE	n/a	100	100	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	98	69	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Hotai Finance.
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