Sichuan Gold (SZSE:001337) Seems To Use Debt Rather Sparingly
Sichuan Gold (SZSE:001337) Seems To Use Debt Rather Sparingly
The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. We can see that Sichuan Gold Co., Ltd. (SZSE:001337) does use debt in its business. But the more important question is: how much risk is that debt creating?
伯克希尔哈撒韦的查理·芒格支持的外部基金经理李录,在他说'最大的投资风险不在于价格的波动,而在于您是否会遭受资本的永久损失'时丝毫不掩饰。当我们考虑一家公司有多冒险时,我们总是喜欢看看它对债务的利用,因为债务过重可能导致毁灭。我们可以看到四川黄金有限公司(SZSE:001337)在业务中使用了债务。但更重要的问题是:这些债务会带来多大风险?
When Is Debt Dangerous?
债务何时有危险?
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. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. 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.
债务是帮助企业成长的工具,但如果企业无法偿还债权人,那么它就处于他们的掌控之下。资本主义的一部分是“创意毁灭”过程,失败的企业被无情地清算。然而,更频繁的(但仍然昂贵的)情况是企业不得不以折价发行股票,永久性稀释股东,才能支持其资产负债表。当然,债务可以是企业重要的工具,尤其是资本密集型企业。当我们考虑一个公司的债务使用情况时,首先要看现金和债务的总体情况。
What Is Sichuan Gold's Net Debt?
四川黄金的净负债是多少?
The image below, which you can click on for greater detail, shows that at June 2024 Sichuan Gold had debt of CN¥44.2m, up from none in one year. However, its balance sheet shows it holds CN¥692.1m in cash, so it actually has CN¥648.0m net cash.
下面的图片可供点击查看更详细情况,显示2024年6月,四川黄金的债务为4420万人民币,比一年前上升。然而,其资产负债表显示其持有69210万人民币现金,因此实际上拥有64800万人民币净现金。
![1724718572303](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240827/42901700-0-227a84835efa9fc5ebc92c9fbe63f631.webp/bigjpg)
How Strong Is Sichuan Gold's Balance Sheet?
四川黄金的资产负债表有多强?
The latest balance sheet data shows that Sichuan Gold had liabilities of CN¥174.3m due within a year, and liabilities of CN¥281.2m falling due after that. Offsetting these obligations, it had cash of CN¥692.1m as well as receivables valued at CN¥13.7m due within 12 months. So it actually has CN¥250.4m more liquid assets than total liabilities.
最新的资产负债表数据显示,四川黄金的一年以内到期负债为17430万人民币,之后到期负债为28120万人民币。抵消这些债务,它的现金为69210万人民币,应收账款为1370万人民币,12个月内到期。因此,它的流动资产比总负债多25040万人民币。
This surplus suggests that Sichuan Gold has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Succinctly put, Sichuan Gold boasts net cash, so it's fair to say it does not have a heavy debt load!
这份盈余表明四川黄金有一个保守的资产负债表,可以很容易地清除债务。简而言之,四川黄金拥有净现金,因此可以说它没有沉重的债务负担!
On top of that, Sichuan Gold grew its EBIT by 47% over the last twelve months, and that growth will make it easier to handle its debt. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since Sichuan Gold will need earnings to service that debt. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.
此外,过去12个月,四川黄金的利润(EBIT)增长了47%,这种增长将使其更容易处理债务。毫无疑问,我们从资产负债表中获得关于债务的大部分信息。但是,您不能将债务完全孤立地看待;因为四川黄金需要盈利来偿还债务。因此,在考虑债务时,肯定值得关注收益趋势。点击此处查看互动快照。
Finally, a company can only pay off debt with cold hard cash, not accounting profits. While Sichuan Gold has net cash on its balance sheet, it's still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance. During the last three years, Sichuan Gold produced sturdy free cash flow equating to 52% of its EBIT, about what we'd expect. This free cash flow puts the company in a good position to pay down debt, when appropriate.
最后,一家公司只能用冰冷的现金偿还债务,而不是会计利润。虽然四川黄金在资产负债表上有净现金,但仍值得关注其将利润(EBIT)转化为自由现金流的能力,以帮助我们了解其现金余额的增长(或腐蚀)速度。在过去的三年中,四川黄金产生了稳固的自由现金流,相当于其EBIT的52%,与我们预期的相当。这份自由现金流使公司有能力在适当时偿还债务。
Summing Up
总之
While it is always sensible to investigate a company's debt, in this case Sichuan Gold has CN¥648.0m in net cash and a decent-looking balance sheet. And we liked the look of last year's 47% year-on-year EBIT growth. So is Sichuan Gold's debt a risk? It doesn't seem so to us. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. For example - Sichuan Gold has 1 warning sign we think you should be aware of.
虽然调查一家公司的债务总是明智的,但这种情况下四川黄金有64800万人民币的净现金和一个看起来不错的资产负债表。而且我们喜欢去年47%的年同比EBIT增长。那么四川黄金的债务风险呢?在我们看来似乎并不是。在分析债务水平时,资产负债表是明显的起点。但最终,每个公司都可能存在超出资产负债表范围的风险。例如,四川黄金有1个警示信号我们认为你应该知道。
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.
说到底,有时候更容易集中精力关注根本不需要债务的公司。读者可以免费访问零净债务增长股票列表。
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