We can readily understand why investors are attracted to unprofitable companies. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed.
Given this risk, we thought we'd take a look at whether Yidu Tech (HKG:2158) shareholders should be worried about its cash burn. In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. Let's start with an examination of the business' cash, relative to its cash burn.
View our latest analysis for Yidu Tech
How Long Is Yidu Tech's Cash Runway?
You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. When Yidu Tech last reported its balance sheet in March 2022, it had zero debt and cash worth CN¥3.8b. Importantly, its cash burn was CN¥683m over the trailing twelve months. Therefore, from March 2022 it had 5.5 years of cash runway. Importantly, though, analysts think that Yidu Tech will reach cashflow breakeven before then. If that happens, then the length of its cash runway, today, would become a moot point. Depicted below, you can see how its cash holdings have changed over time.
SEHK:2158 Debt to Equity History August 1st 2022
How Well Is Yidu Tech Growing?
Yidu Tech actually ramped up its cash burn by a whopping 95% in the last year, which shows it is boosting investment in the business. On the bright side, at least operating revenue was up 43% over the same period, giving some cause for hope. On balance, we'd say the company is improving over time. While the past is always worth studying, it is the future that matters most of all. So you might want to take a peek at how much the company is expected to grow in the next few years.
How Easily Can Yidu Tech Raise Cash?
There's no doubt Yidu Tech seems to be in a fairly good position, when it comes to managing its cash burn, but even if it's only hypothetical, it's always worth asking how easily it could raise more money to fund growth. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn.
Yidu Tech has a market capitalisation of CN¥7.0b and burnt through CN¥683m last year, which is 9.8% of the company's market value. Given that is a rather small percentage, it would probably be really easy for the company to fund another year's growth by issuing some new shares to investors, or even by taking out a loan.
Is Yidu Tech's Cash Burn A Worry?
As you can probably tell by now, we're not too worried about Yidu Tech's cash burn. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. While we must concede that its increasing cash burn is a bit worrying, the other factors mentioned in this article provide great comfort when it comes to the cash burn. It's clearly very positive to see that analysts are forecasting the company will break even fairly soon. After considering a range of factors in this article, we're pretty relaxed about its cash burn, since the company seems to be in a good position to continue to fund its growth. Its important for readers to be cognizant of the risks that can affect the company's operations, and we've picked out 1 warning sign for Yidu Tech that investors should know when investing in the stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts)
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我们很容易理解为什么投资者会被不盈利的公司所吸引。例如,生物技术和采矿勘探公司经常亏损多年,然后才在新的治疗方法或矿物发现方面取得成功。话虽如此,没有盈利的公司是有风险的,因为它们可能会烧掉所有的现金,陷入困境。
考虑到这种风险,我们认为我们应该看看一度科技(HKG:2158)股东应该担心它的现金消耗。在本文中,我们将现金消耗定义为年度(负)自由现金流,即公司每年为实现增长而花费的资金数量。让我们从检查企业的现金与其现金消耗的关系开始。
查看我们对益都科技的最新分析
易度科技的现金跑道有多长?
你可以通过将公司拥有的现金数量除以它花掉这些现金的速度来计算公司的现金跑道。易度科技上一次报告资产负债表是在2022年3月,当时它没有债务和现金,价值38亿元人民币。重要的是,在接下来的12个月里,它的现金消耗为6.83亿加元。因此,从2022年3月开始,它有了5.5年的现金跑道。不过,重要的是,分析人士认为,一度科技将在此之前实现现金流盈亏平衡。如果发生这种情况,那么它今天的现金跑道长度将成为一个没有意义的问题。如下所示,你可以看到它的现金持有量是如何随着时间的推移而变化的。
联交所:2158债转股历史2022年8月1日
一度科技的发展有多好?
去年,易度科技的现金消耗实际上增长了95%,这表明它正在加大对这项业务的投资。好的一面是,至少同期营业收入增长了43%,这给了人们一些希望。总的来说,我们会说该公司正在随着时间的推移而不断进步。虽然过去总是值得研究的,但最重要的是未来。因此,你可能想看看该公司在未来几年的预期增长速度。
易度科技筹集现金的难度有多大?
毫无疑问,在管理现金消耗方面,益都科技似乎处于相当有利的地位,但即使这只是一个假设,人们总是值得问的是,它有多容易筹集到更多资金来支持增长。一般来说,上市企业可以通过发行股票或承担债务来筹集新的现金。公开上市公司的主要优势之一是,它们可以向投资者出售股票,以筹集现金和为增长提供资金。通过观察一家公司相对于其市值的现金消耗,我们可以洞察到,如果公司需要筹集足够的现金来支付另一年的现金消耗,股东将被稀释多少。
易度科技的市值为70亿元人民币,去年烧掉了6.83亿元人民币,占该公司市值的9.8%。鉴于这只是一个相当小的比例,该公司很可能很容易通过向投资者发行一些新股,甚至通过贷款来为下一年的增长提供资金。
易度科技的烧钱是一件令人担忧的事情吗?
正如你现在可能已经知道的,我们并不太担心易度科技的烧钱。特别是,我们认为它的现金跑道脱颖而出,证明该公司很好地控制了支出。虽然我们必须承认,它不断增加的现金消耗有点令人担忧,但本文提到的其他因素在涉及到现金消耗时提供了很大的安慰。看到分析师预测该公司将很快实现盈亏平衡,这显然是非常积极的。在考虑了本文中的一系列因素后,我们对该公司的现金消耗相当放心,因为该公司似乎处于一个很好的位置,可以继续为其增长提供资金。重要的是让读者认识到可能影响公司运营的风险,我们已经挑选出宜度科技的1个警告标志投资者在投资股票时应该知道这一点。
当然了,如果你把目光投向别处,你可能会发现这是一笔很棒的投资。所以让我们来看看这个免费感兴趣的公司名单,以及这份名单中的成长股(根据分析师预测)
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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。