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.
馬克斯説得很好,他不是擔心股價波動,而是我擔心的是永久虧損的可能性……我認識的每個實際投資者都擔心。因此,當你考慮到任何一隻股票的風險有多大時,你需要考慮債務可能是顯而易見的,因為太多的債務可能會讓一家公司倒閉。我們可以看到廣汽集團股份有限公司。(HKG:2238)確實在其業務中使用債務。但股東是否應該擔心它的債務使用情況?
債務在什麼時候是危險的?
債務是幫助企業發展的一種工具,但如果一家企業無法償還貸款人的債務,那麼它就只能聽從貸款人的擺佈。如果情況真的變得很糟糕,貸款人可以控制業務。然而,一種更常見(但仍令人痛苦)的情景是,它不得不以低價籌集新的股本,從而永久性地稀釋股東。當然,在企業中,債務可以是一個重要的工具,特別是資本密集型企業。當我們考慮一家公司的債務用途時,我們首先會把現金和債務放在一起看。
參見我們對廣汽集團的最新分析
廣汽集團揹負着多少債務?
如下所示,截至2022年3月,廣汽集團的債務為人民幣128億元,低於一年前的人民幣151億元。然而,其資產負債表顯示,它持有人民幣236億元的現金,因此它實際上擁有人民幣108億元的淨現金。
聯交所:2238債轉股歷史2022年7月18日
看廣汽集團的負債
放大最新的資產負債表數據,我們可以看到,廣汽集團有462億元的負債在12個月內到期,還有93億元的負債在12個月內到期。另一方面,有236億加元的現金和141億加元的應收賬款在一年內到期。因此,它的負債超過了現金和(近期)應收賬款的總和178億元。
由於上市交易的廣汽集團股票總價值達到令人印象深刻的人民幣1389億元,這種負債水平似乎不太可能構成重大威脅。然而,我們確實認為值得關注其資產負債表的實力,因為它可能會隨着時間的推移而變化。雖然廣汽集團確實有值得注意的負債,但它的現金也多於債務,所以我們非常有信心它能夠安全地管理債務。毫無疑問,我們從資產負債表中瞭解到的債務最多。但最終,該業務未來的盈利能力將決定廣汽集團能否隨着時間的推移加強其資產負債表。所以,如果你關注未來,你可以看看這個免費顯示分析師利潤預測的報告。
去年,廣汽集團沒有實現息税前利潤,但收入增長了21%,達到人民幣830億元。股東們可能會祈禱它能以自己的方式增長並實現盈利。
那麼,廣汽集團的風險有多大呢?
雖然廣汽集團在息税前收益(EBIT)水平上出現了虧損,但它實際上錄得了80億元的賬面利潤。因此,當你考慮到它有淨現金和法定利潤時,它的股票風險可能並不像看起來那樣高,至少在短期內是這樣。對於廣汽集團的股東來説,好消息是其收入增長強勁,如果需要的話,融資變得更容易。但我們仍然認為這有一定的風險。當你分析債務時,資產負債表顯然是你關注的領域。但歸根結底,每家公司都可能包含存在於資產負債表之外的風險。例如,我們已經確定廣汽集團的2個警示標誌(1是關於的)你應該知道。
總而言之,有時候專注於甚至不需要債務的公司會更容易。讀者可以訪問淨債務為零的成長型股票列表100%免費,現在。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。