Here's Why Jiangsu Huahong Technology (SZSE:002645) Can Afford Some Debt
Here's Why Jiangsu Huahong Technology (SZSE:002645) Can Afford Some Debt
Legendary fund manager Li Lu (who Charlie Munger backed) once said, '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 note that Jiangsu Huahong Technology Co., Ltd. (SZSE:002645) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?
傳奇基金經理李露(由查理·芒格支持)曾經說過:“最大的投資風險不是價格的波動,而是你是否會遭受永久的資本損失。”當我們思考一家公司的風險有多大時,我們總是喜歡考慮其債務的用途,因爲債務過載可能導致破產。我們注意到,江蘇華虹科技股份有限公司(深圳證券交易所:002645)的資產負債表上確實有債務。但更重要的問題是:這筆債務會帶來多大的風險?
When Is Debt A Problem?
債務何時會成爲問題?
Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. 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, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.
一般而言,只有當公司無法通過籌集資金或用自己的現金流輕鬆還清債務時,債務才會成爲真正的問題。資本主義的組成部分是 “創造性破壞” 過程,在這種過程中,倒閉的企業被銀行家無情地清算。但是,更常見(但仍然昂貴)的情況是,公司爲了控制債務,必須以低廉的股價稀釋股東。當然,債務可以成爲企業的重要工具,尤其是資本密集型企業。當我們檢查債務水平時,我們首先要同時考慮現金和債務水平。
How Much Debt Does Jiangsu Huahong Technology Carry?
江蘇華虹科技揹負了多少債務?
As you can see below, at the end of September 2023, Jiangsu Huahong Technology had CN¥1.16b of debt, up from CN¥699.9m a year ago. Click the image for more detail. On the flip side, it has CN¥950.0m in cash leading to net debt of about CN¥205.1m.
如下所示,截至2023年9月底,江蘇華虹科技的債務爲11.6億元人民幣,高於去年同期的6.999億元人民幣。點擊圖片了解更多詳情。另一方面,它擁有9.50億元的現金,淨負債約爲2.051億元人民幣。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240224/0-6d79bef564c27c0c5c733351b90a16ea-0-14f6cd84675546d493e4eab882a3d20b.png/big)
A Look At Jiangsu Huahong Technology's Liabilities
看看江蘇華虹科技的負債
According to the last reported balance sheet, Jiangsu Huahong Technology had liabilities of CN¥1.44b due within 12 months, and liabilities of CN¥753.0m due beyond 12 months. Offsetting these obligations, it had cash of CN¥950.0m as well as receivables valued at CN¥658.9m due within 12 months. So its liabilities total CN¥580.5m more than the combination of its cash and short-term receivables.
根據上次報告的資產負債表,江蘇華虹科技的負債爲14.4億元人民幣,12個月以後到期的負債爲7.530億元人民幣。除這些債務外,它有9.50億元人民幣的現金以及價值6.589億元人民幣的應收賬款將在12個月內到期。因此,其負債總額比其現金和短期應收賬款的總額高出5.805億元人民幣。
Given Jiangsu Huahong Technology has a market capitalization of CN¥4.69b, it's hard to believe these liabilities pose much threat. But there are sufficient liabilities that we would certainly recommend shareholders continue to monitor the balance sheet, going forward. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Jiangsu Huahong Technology 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.
鑑於江蘇華虹科技的市值爲46.9億元人民幣,很難相信這些負債會構成很大的威脅。但是,有足夠的負債,我們肯定會建議股東今後繼續監督資產負債表。資產負債表顯然是分析債務時需要關注的領域。但最終,該業務的未來盈利能力將決定江蘇華虹科技能否隨着時間的推移加強其資產負債表。因此,如果您專注於未來,可以查看這份顯示分析師利潤預測的免費報告。
Over 12 months, Jiangsu Huahong Technology made a loss at the EBIT level, and saw its revenue drop to CN¥7.3b, which is a fall of 13%. We would much prefer see growth.
在過去的12個月中,江蘇華虹科技在息稅前利潤水平上出現虧損,收入降至73億元人民幣,下降了13%。我們更希望看到增長。
Caveat Emptor
Caveat Emptor
Not only did Jiangsu Huahong Technology's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Indeed, it lost CN¥216m at the EBIT level. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. Another cause for caution is that is bled CN¥99m in negative free cash flow over the last twelve months. So to be blunt we think it is risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. We've identified 1 warning sign with Jiangsu Huahong Technology , and understanding them should be part of your investment process.
在過去的十二個月中,江蘇華虹科技不僅收入下滑,而且還產生了負的息稅前收益(EBIT)。事實上,它在息稅前利潤水平上損失了2.16億元人民幣。當我們審視這一點並回顧其資產負債表上相對於現金的負債時,對我們來說,公司有任何債務似乎是不明智的。坦率地說,我們認爲資產負債表遠非匹配,儘管可以隨着時間的推移而改善。另一個需要謹慎的原因是,在過去的十二個月中,自由現金流爲負9,900萬元人民幣。因此,坦率地說,我們認爲這是有風險的。毫無疑問,我們從資產負債表中學到的關於債務的知識最多。但歸根結底,每家公司都可以控制資產負債表之外存在的風險。我們已經確定了江蘇華虹科技的1個警告信號,我們知道它們應該是您投資過程的一部分。
If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.
如果你有興趣投資能夠在沒有債務負擔的情況下增加利潤的企業,請查看這份資產負債表上有淨現金的成長型企業的免費清單。
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