Is Hunan Jiudian Pharmaceutical (SZSE:300705) Using Too Much Debt?
Is Hunan Jiudian Pharmaceutical (SZSE:300705) Using Too Much Debt?
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' 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. As with many other companies Hunan Jiudian Pharmaceutical Co., Ltd. (SZSE:300705) makes use of debt. But the real question is whether this debt is making the company risky.
沃伦·巴菲特曾 famously 说过:'波动性远非风险的同义词。' 当我们考虑一家公司有多危险时,我们总是喜欢看看它的债务使用,因为债务过重可能导致毁灭。 与许多其他公司一样,九典制药(深圳证券交易所代码:300705)也使用了债务。但真正的问题是,这些债务是否让公司变得风险增大。
When Is Debt Dangerous?
债务何时会变得危险?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. 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.
当一家企业无法轻松履行这些义务时,债务和其他负债便会变得有风险,无论是通过自由现金流还是以吸引人的价格融资。资本主义的重要组成部分是'创造性破坏'的过程,在这个过程中,失败的企业被其银行毫不留情地清算。然而,更常见(但仍然代价高昂)的情况是,一家公司必须以廉价的股价稀释股东,仅仅是为了控制债务。当然,债务的好处在于,它通常代表了廉价资本,尤其是当它替代了能够以高回报率再投资的公司的稀释时。当我们考虑一家公司的债务使用情况时,我们首先将现金和债务放在一起分析。
What Is Hunan Jiudian Pharmaceutical's Debt?
九典制药的债务是多少?
As you can see below, Hunan Jiudian Pharmaceutical had CN¥367.3m of debt at September 2024, down from CN¥633.3m a year prior. But on the other hand it also has CN¥710.0m in cash, leading to a CN¥342.7m net cash position.
正如你在下面看到的,九典制药在2024年9月的债务为36730万CN¥,低于前一年63330万CN¥。 但另一方面,它也有71000万CN¥的现金,因此净现金状况为34270万CN¥。
How Strong Is Hunan Jiudian Pharmaceutical's Balance Sheet?
九典制药的资产负债表有多强?
Zooming in on the latest balance sheet data, we can see that Hunan Jiudian Pharmaceutical had liabilities of CN¥377.7m due within 12 months and liabilities of CN¥479.9m due beyond that. On the other hand, it had cash of CN¥710.0m and CN¥526.3m worth of receivables due within a year. So it actually has CN¥378.7m more liquid assets than total liabilities.
通过查看最新的资产负债表数据,我们可以看到九典制药在12个月内有负债37770万人民币,超过12个月的负债为47990万人民币。另一方面,它的现金为71000万人民币,且有52630万人民币的应收账款在一年内到期。因此,它实际上比总负债多出37870万人民币的流动资产。
This short term liquidity is a sign that Hunan Jiudian Pharmaceutical could probably pay off its debt with ease, as its balance sheet is far from stretched. Simply put, the fact that Hunan Jiudian Pharmaceutical has more cash than debt is arguably a good indication that it can manage its debt safely.
这种短期流动性表明,九典制药可能很容易偿还其债务,因为它的资产负债表远未紧张。简单来说,九典制药的现金多于债务,这无疑是它能够安全管理债务的好迹象。
On top of that, Hunan Jiudian Pharmaceutical grew its EBIT by 37% over the last twelve months, and that growth will make it easier to handle its debt. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine Hunan Jiudian Pharmaceutical's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.
此外,九典制药在过去12个月中,其息税前利润(EBIT)增长了37%,这种增长将使其更容易处理债务。在分析债务水平时,资产负债表显然是开始的地方。但未来的收益,尤其是将决定九典制药能否保持健康的资产负债表。因此,如果你想看看专业人士的看法,你可能会发现这份关于分析师利润预测的自由报告很有趣。
But our final consideration is also important, because a company cannot pay debt with paper profits; it needs cold hard cash. While Hunan Jiudian Pharmaceutical 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. In the last three years, Hunan Jiudian Pharmaceutical's free cash flow amounted to 20% of its EBIT, less than we'd expect. That's not great, when it comes to paying down debt.
但我们的最终考虑也很重要,因为公司不能用纸上利润来偿还债务;它需要实际的现金。虽然九典制药的资产负债表上有净现金,但还是值得关注其将税息前利润(EBIT)转化为自由现金流的能力,以帮助我们了解它有多快在增加(或减少)现金余额。在过去三年中,九典制药的自由现金流占其EBIT的20%,低于我们的预期。这在偿还债务方面表现不佳。
Summing Up
总结
While it is always sensible to investigate a company's debt, in this case Hunan Jiudian Pharmaceutical has CN¥342.7m in net cash and a decent-looking balance sheet. And we liked the look of last year's 37% year-on-year EBIT growth. So is Hunan Jiudian Pharmaceutical's debt a risk? It doesn't seem so to us. 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 example - Hunan Jiudian Pharmaceutical has 2 warning signs we think you should be aware of.
虽然调查公司的债务总是明智的,但在这种情况下,九典制药拥有34270万CN¥的净现金和一个看起来不错的资产负债表。我们喜欢去年的37%同比EBIT增长。那么,九典制药的债务是风险吗?在我们看来似乎不是。分析债务时,资产负债表显然是需要关注的领域。但最终,每家公司都可能存在资产负债表之外的风险。例如——九典制药有2个警告信号,我们认为您应该知道。
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.
无论最终结果如何,有时候更容易关注那些根本不需要债务的公司。读者可以立即免费获取一份净债务为零的成长股列表。
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