Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We can see that Guangzhou Automobile Group Co., Ltd. (HKG:2238) does use debt in its business. But should shareholders be worried about its use of debt?
When Is Debt Dangerous?
Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we think about a company's use of debt, we first look at cash and debt together.
See our latest analysis for Guangzhou Automobile Group
How Much Debt Does Guangzhou Automobile Group Carry?
As you can see below, Guangzhou Automobile Group had CN¥12.8b of debt at March 2022, down from CN¥15.1b a year prior. However, its balance sheet shows it holds CN¥23.6b in cash, so it actually has CN¥10.8b net cash.
SEHK:2238 Debt to Equity History July 18th 2022
A Look At Guangzhou Automobile Group's Liabilities
Zooming in on the latest balance sheet data, we can see that Guangzhou Automobile Group had liabilities of CN¥46.2b due within 12 months and liabilities of CN¥9.30b due beyond that. On the other hand, it had cash of CN¥23.6b and CN¥14.1b worth of receivables due within a year. So its liabilities outweigh the sum of its cash and (near-term) receivables by CN¥17.8b.
Since publicly traded Guangzhou Automobile Group shares are worth a very impressive total of CN¥138.9b, it seems unlikely that this level of liabilities would be a major threat. However, we do think it is worth keeping an eye on its balance sheet strength, as it may change over time. While it does have liabilities worth noting, Guangzhou Automobile Group also has more cash than debt, so we're pretty confident it can manage its debt safely. There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if Guangzhou Automobile Group can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
In the last year Guangzhou Automobile Group wasn't profitable at an EBIT level, but managed to grow its revenue by 21%, to CN¥83b. Shareholders probably have their fingers crossed that it can grow its way to profits.
So How Risky Is Guangzhou Automobile Group?
While Guangzhou Automobile Group lost money on an earnings before interest and tax (EBIT) level, it actually booked a paper profit of CN¥8.0b. So when you consider it has net cash, along with the statutory profit, the stock probably isn't as risky as it might seem, at least in the short term. The good news for Guangzhou Automobile Group shareholders is that its revenue growth is strong, making it easier to raise capital if need be. But we still think it's somewhat risky. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. For instance, we've identified 2 warning signs for Guangzhou Automobile Group (1 is concerning) you should be aware of.
When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
马克斯说得很好,他不是担心股价波动,而是我担心的是永久亏损的可能性……我认识的每个实际投资者都担心。因此,当你考虑到任何一只股票的风险有多大时,你需要考虑债务可能是显而易见的,因为太多的债务可能会让一家公司倒闭。我们可以看到广汽集团股份有限公司。(HKG:2238)确实在其业务中使用债务。但股东是否应该担心它的债务使用情况?
债务在什么时候是危险的?
债务是帮助企业发展的一种工具,但如果一家企业无法偿还贷款人的债务,那么它就只能听从贷款人的摆布。如果情况真的变得很糟糕,贷款人可以控制业务。然而,一种更常见(但仍令人痛苦)的情景是,它不得不以低价筹集新的股本,从而永久性地稀释股东。当然,在企业中,债务可以是一个重要的工具,特别是资本密集型企业。当我们考虑一家公司的债务用途时,我们首先会把现金和债务放在一起看。
参见我们对广汽集团的最新分析
广汽集团背负着多少债务?
如下所示,截至2022年3月,广汽集团的债务为人民币128亿元,低于一年前的人民币151亿元。然而,其资产负债表显示,它持有人民币236亿元的现金,因此它实际上拥有人民币108亿元的净现金。
联交所:2238债转股历史2022年7月18日
看广汽集团的负债
放大最新的资产负债表数据,我们可以看到,广汽集团有462亿元的负债在12个月内到期,还有93亿元的负债在12个月内到期。另一方面,有236亿加元的现金和141亿加元的应收账款在一年内到期。因此,它的负债超过了现金和(近期)应收账款的总和178亿元。
由于上市交易的广汽集团股票总价值达到令人印象深刻的人民币1389亿元,这种负债水平似乎不太可能构成重大威胁。然而,我们确实认为值得关注其资产负债表的实力,因为它可能会随着时间的推移而变化。虽然广汽集团确实有值得注意的负债,但它的现金也多于债务,所以我们非常有信心它能够安全地管理债务。毫无疑问,我们从资产负债表中了解到的债务最多。但最终,该业务未来的盈利能力将决定广汽集团能否随着时间的推移加强其资产负债表。所以,如果你关注未来,你可以看看这个免费显示分析师利润预测的报告。
去年,广汽集团没有实现息税前利润,但收入增长了21%,达到人民币830亿元。股东们可能会祈祷它能以自己的方式增长并实现盈利。
那么,广汽集团的风险有多大呢?
虽然广汽集团在息税前收益(EBIT)水平上出现了亏损,但它实际上录得了80亿元的账面利润。因此,当你考虑到它有净现金和法定利润时,它的股票风险可能并不像看起来那样高,至少在短期内是这样。对于广汽集团的股东来说,好消息是其收入增长强劲,如果需要的话,融资变得更容易。但我们仍然认为这有一定的风险。当你分析债务时,资产负债表显然是你关注的领域。但归根结底,每家公司都可能包含存在于资产负债表之外的风险。例如,我们已经确定广汽集团的2个警示标志(1是关于的)你应该知道。
总而言之,有时候专注于甚至不需要债务的公司会更容易。读者可以访问净债务为零的成长型股票列表100%免费,现在。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。