$Target Hospitality (TH.US)$Listed in 2018, in the past 5 ye...

逍遥投资派 commented on a stock · Aug 5, 2023 23:11

$Target Hospitality (TH.US)$Listed in 2018, in the past 5 years, in addition to a 30% decline in 2020, revenue increased for 4 years. The 5-year average growth rate was 30%, of which 72.3% increase in 2022. Operating profit fell 3.3% in 2019, 91.5% in 2020, and grew for the remaining 3 years. The 5-year average growth rate was 50%, of which it grew 3.7 times in 2022. Net profit, on the other hand, lost for two years in 2020 and 2021, and reversed losses to 74 million in 2022.

The income statement shows that interest expenses are basically between 35 million and 40 million each year. When operating profit is low, net profit will be lost. Interest expenses account for 21% of operating profit in 2022, and the burden is rapidly reduced as operating profit increases dramatically.

2023Q1 revenue continued to increase sharply by 84%. Operating profit quadrupled to reach 62 million, net profit reached 44 million, and interest expenses fell to 12% of operating profit for the quarter. Interest charges here are a leverage on net profit. When operating profit is low, it amplifies losses, and when it is high, it amplifies profit.

The balance ratio fell from 81% to 74% in 2022 and 62.8% in 2023Q1.

Goodwill and other intangible assets of $117 million, accounting for 48% of the net assets of $242 million. Long-term loans were replaced in 2023Q1, and long-term loans of 329 million were converted to short-term loans of 207 million. Perhaps to cope with the recent rise in interest, interest-bearing liabilities were reduced quite a bit.

In the past 3 years, net operating cash flow began to greatly exceed net investment, generating a certain shareholder surplus.

Currently, the price-earnings ratio is 17.4, and the price-earnings ratio has dropped to 11.6. Although the hotel industry is also quite cyclical, the current revenue scale is still very small. There should still be plenty of room, so you can choose carefully (⭐️)

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