$Hess Midstream (HESM.US)$Listed in 2017, operating in the s...

Over the past 5 years, revenue has continued to grow at an average rate of 17%. Operating profit has grown for 4 years, with an average growth rate of 24.6%, except for a slight decrease in 2019. Net income has also grown for 4 years, with an average growth rate of 20.7%. However, the majority of profits go to a small number of shareholders, with 86.5% of total profits going to minority shareholders in 2022.

Revenue growth in the first 3 quarters of 2023 is 2.9%, operating profit growth is 2%, and net income has shrunk by 3.4%. Due to a larger decline in profits for minority shareholders, the portion attributed to the listed company has actually increased by 30%. This difficulty in analyzing stocks where minority shareholders have a high proportion is due to how profits can be easily adjusted.

Over the past five years, the asset-liability ratio has sharply increased from 37.3% to 85.3%. The proportion and growth rate of receivables are normal, with no inventory, and the vast majority of assets are in non-current assets. Long-term borrowings are 2.883 billion, which is 5.4 times the net assets, indicating a very high leverage ratio.

The cash has always been only two or three million, with a current ratio of 0.79 and a quick ratio of 0.72.

For the past five years, operating cash flow has been higher than investing cash flow, resulting in some shareholder surplus.

Currently, the P/E ratio is 15.9, TTM P/E ratio is 15.7, dividend yield is 7.3%, with stable and continuous growth. The 5-year average net income is 0.06 billion, corresponding to a P/E ratio of 36. Considering the discounted valuation for growth stocks and the overvaluation for cyclical stocks, and taking into account the significant minority shareholder equity, it is better to wait and see.