Does Wuxi Zhenhua Auto PartsLtd (SHSE:605319) Have A Healthy Balance Sheet?
Does Wuxi Zhenhua Auto PartsLtd (SHSE:605319) Have A Healthy Balance Sheet?
Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' 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 Wuxi Zhenhua Auto Parts Co.,Ltd. (SHSE:605319) does use debt in its business. But the more important question is: how much risk is that debt creating?
有人说,波动性,而不是债务,是投资者思考风险的最佳方式,但沃伦·巴菲特曾说过一句名言:“波动性远非风险的代名词。”因此,很明显,当你考虑任何给定股票的风险时,你需要考虑债务,因为过多的债务会使公司陷入困境。我们可以看到无锡振华汽车零部件有限公司, Ltd.(上海证券交易所代码:605319)确实在其业务中使用债务。但更重要的问题是:债务创造了多大的风险?
What Risk Does Debt Bring?
债务会带来什么风险?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. When we think about a company's use of debt, we first look at cash and debt together.
债务为企业提供帮助,直到企业难以用新的资本或自由现金流还清债务。最终,如果公司无法履行偿还债务的法律义务,股东可能一无所有地离开。但是,更常见(但仍然令人痛苦)的情况是,它必须以低廉的价格筹集新的股权资本,从而永久稀释股东。当然,债务的好处是它通常代表廉价资本,尤其是当它用高回报率进行再投资的能力取代了公司的稀释时。当我们考虑公司对债务的使用时,我们首先要同时考虑现金和债务。
What Is Wuxi Zhenhua Auto PartsLtd's Debt?
无锡振华汽车零部件有限公司的债务是多少?
The image below, which you can click on for greater detail, shows that at September 2023 Wuxi Zhenhua Auto PartsLtd had debt of CN¥680.6m, up from CN¥360.4m in one year. However, it also had CN¥348.8m in cash, and so its net debt is CN¥331.8m.
您可以点击下图查看更多详情,该图片显示,截至2023年9月,无锡振华汽车零部件有限公司的债务为6.806亿元人民币,高于一年内的3.604亿元人民币。但是,它也有3.488亿元的现金,因此其净负债为3.318亿元人民币。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240306/0-ba6f47973ef59a62f5f05b6e438189a3-0-58bad649cd5b4d95537e88b66a80b4aa.png/big)
A Look At Wuxi Zhenhua Auto PartsLtd's Liabilities
看看无锡振华汽车零部件有限公司的负债
Zooming in on the latest balance sheet data, we can see that Wuxi Zhenhua Auto PartsLtd had liabilities of CN¥2.15b due within 12 months and liabilities of CN¥109.3m due beyond that. Offsetting these obligations, it had cash of CN¥348.8m as well as receivables valued at CN¥1.38b due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by CN¥526.0m.
放大最新的资产负债表数据,我们可以看到,无锡振华汽车零部件有限公司在12个月内到期的负债为21.5亿元人民币,之后到期的负债为1.093亿元人民币。除了这些债务外,它还有3.488亿元的现金以及价值13.8亿元人民币的应收账款将在12个月内到期。因此,其负债超过其现金和(短期)应收账款总额5.26亿元人民币。
Of course, Wuxi Zhenhua Auto PartsLtd has a market capitalization of CN¥4.81b, so these liabilities are probably manageable. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse.
当然,无锡振华汽车零部件有限公司的市值为48.1亿元人民币,因此这些负债可能是可以控制的。话虽如此,很明显,我们应该继续监控其资产负债表,以免情况恶化。
We use two main ratios to inform us about debt levels relative to earnings. The first is net debt divided by earnings before interest, tax, depreciation, and amortization (EBITDA), while the second is how many times its earnings before interest and tax (EBIT) covers its interest expense (or its interest cover, for short). The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio).
我们使用两个主要比率来告知我们相对于收益的债务水平。第一个是净负债除以利息、税项、折旧和摊销前的收益(EBITDA),第二个是其利息和税前收益(EBIT)覆盖其利息支出(或简称利息保障)的多少倍。这种方法的优势在于,我们既考虑了债务的绝对数量(包括净负债与息税折旧摊销前利润),也考虑了与该债务相关的实际利息支出(及其利息覆盖率)。
Wuxi Zhenhua Auto PartsLtd has a low net debt to EBITDA ratio of only 0.91. And its EBIT easily covers its interest expense, being 11.1 times the size. So you could argue it is no more threatened by its debt than an elephant is by a mouse. Also positive, Wuxi Zhenhua Auto PartsLtd grew its EBIT by 27% in the last year, and that should make it easier to pay down debt, going forward. 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 Wuxi Zhenhua Auto PartsLtd 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.
无锡振华汽车零部件有限公司的净负债与息税折旧摊销前利润的比率很低,仅为0.91。而且其息税前利润很容易弥补其利息支出,是其规模的11.1倍。因此,你可以争辩说,它受到债务的威胁并不比大象受到老鼠的威胁更大。同样乐观的是,无锡振华汽车零部件有限公司去年的息税前利润增长了27%,这将使未来更容易偿还债务。毫无疑问,我们从资产负债表中学到的关于债务的知识最多。但最终,该业务未来的盈利能力将决定无锡振华汽车零部件有限公司能否随着时间的推移加强其资产负债表。因此,如果您专注于未来,可以查看这份显示分析师利润预测的免费报告。
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. So we clearly need to look at whether that EBIT is leading to corresponding free cash flow. During the last three years, Wuxi Zhenhua Auto PartsLtd burned a lot of cash. While investors are no doubt expecting a reversal of that situation in due course, it clearly does mean its use of debt is more risky.
最后,尽管税务人员可能喜欢会计利润,但贷款人只接受冷硬现金。因此,我们显然需要研究息税前利润是否会带来相应的自由现金流。在过去的三年中,无锡振华汽车零部件有限公司烧掉了大量现金。尽管投资者无疑预计这种情况将在适当的时候逆转,但这显然意味着其使用债务的风险更大。
Our View
我们的观点
Happily, Wuxi Zhenhua Auto PartsLtd's impressive EBIT growth rate implies it has the upper hand on its debt. But we must concede we find its conversion of EBIT to free cash flow has the opposite effect. Looking at all the aforementioned factors together, it strikes us that Wuxi Zhenhua Auto PartsLtd can handle its debt fairly comfortably. Of course, while this leverage can enhance returns on equity, it does bring more risk, so it's worth keeping an eye on this one. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. For instance, we've identified 3 warning signs for Wuxi Zhenhua Auto PartsLtd (1 is potentially serious) you should be aware of.
令人高兴的是,无锡振华汽车零部件有限公司令人印象深刻的息税前利润增长率意味着其债务占了上风。但是我们必须承认,我们发现其将息税前利润转换为自由现金流会产生相反的效果。综合上述所有因素,令我们震惊的是,无锡振华汽车零部件有限公司能够相当轻松地处理债务。当然,尽管这种杠杆可以提高股本回报率,但它确实带来了更多的风险,因此值得关注。在分析债务水平时,资产负债表是显而易见的起点。但是,并非所有的投资风险都存在于资产负债表中,远非如此。例如,我们已经确定了无锡振华汽车零部件有限公司的3个警告标志(其中一个可能很严重),你应该注意。
At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.
归根结底,通常最好将注意力集中在没有净负债的公司身上。您可以访问我们的此类公司的特别名单(所有公司都有利润增长记录)。它是免费的。
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