Is Wenzhou Yihua Connector (SZSE:002897) Using Too Much Debt?
Is Wenzhou Yihua Connector (SZSE:002897) Using Too Much Debt?
David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' 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 note that Wenzhou Yihua Connector Co., Ltd. (SZSE:002897) does have debt on its balance sheet. But the real question is whether this debt is making the company risky.
大衛·伊本說得好,他說:“波動性不是我們關心的風險。我們關心的是避免資本的永久損失。”因此,很明顯,當你考慮任何給定股票的風險時,你需要考慮債務,因爲過多的債務會使公司陷入困境。我們注意到,溫州億華連接器有限公司(深圳證券交易所:002897)的資產負債表上確實有債務。但真正的問題是這筆債務是否使公司面臨風險。
When Is Debt A Problem?
債務何時會成爲問題?
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. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, plenty of companies use debt to fund growth, without any negative consequences. The first step when considering a company's debt levels is to consider its cash and debt together.
債務可以幫助企業,直到企業難以償還債務,無論是新資本還是自由現金流。最終,如果公司無法履行償還債務的法律義務,股東可能會一無所獲。儘管這種情況並不常見,但我們經常會看到負債公司永久稀釋股東,因爲貸款人迫使他們以不良价格籌集資金。當然,許多公司使用債務爲增長提供資金,而不會產生任何負面影響。考慮公司的債務水平的第一步是同時考慮其現金和債務。
How Much Debt Does Wenzhou Yihua Connector Carry?
溫州億華連接器揹負了多少債務?
The image below, which you can click on for greater detail, shows that at September 2023 Wenzhou Yihua Connector had debt of CN¥2.33b, up from CN¥1.91b in one year. On the flip side, it has CN¥649.3m in cash leading to net debt of about CN¥1.68b.
您可以點擊下圖查看更多詳細信息,該圖片顯示,截至2023年9月,溫州億華連接器的債務爲23.3億元人民幣,高於一年的19.1億元人民幣。另一方面,它擁有6.493億元的現金,淨負債約爲16.8億元人民幣。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240228/0-e5bed2945b569d9003cab0f3cd31b7e5-0-6cef99e318fef08dc2d25e77c9c99552.png/big)
A Look At Wenzhou Yihua Connector's Liabilities
溫州億華連接器的負債一覽
We can see from the most recent balance sheet that Wenzhou Yihua Connector had liabilities of CN¥2.39b falling due within a year, and liabilities of CN¥992.5m due beyond that. On the other hand, it had cash of CN¥649.3m and CN¥1.17b worth of receivables due within a year. So its liabilities outweigh the sum of its cash and (near-term) receivables by CN¥1.56b.
我們可以從最新的資產負債表中看出,溫州億華連接器的負債爲23.9億元人民幣,一年後到期的負債爲9.925億元人民幣。另一方面,它有一年內到期的現金爲6.493億元人民幣,還有價值11.7億元人民幣的應收賬款。因此,其負債超過其現金和(短期)應收賬款總額15.6億元人民幣。
This deficit isn't so bad because Wenzhou Yihua Connector is worth CN¥5.81b, and thus could probably raise enough capital to shore up its balance sheet, if the need arose. But it's clear that we should definitely closely examine whether it can manage its debt without dilution.
這種赤字還不錯,因爲溫州億華連接器的價值爲58.1億元人民幣,因此,如果有需要,可能會籌集足夠的資金來支撐其資產負債表。但很明顯,我們一定要仔細研究它能否在不稀釋的情況下管理債務。
In order to size up a company's debt relative to its earnings, we calculate its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and its earnings before interest and tax (EBIT) divided by its interest expense (its interest cover). 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).
爲了擴大公司相對於收益的負債規模,我們計算其淨負債除以利息、稅項、折舊和攤銷前的收益(EBITDA),將其利息和稅前收益(EBIT)除以利息支出(利息保障)。這種方法的優勢在於,我們既考慮了債務的絕對數量(包括淨負債與息稅折舊攤銷前利潤),也考慮了與該債務相關的實際利息支出(及其利息覆蓋率)。
Wenzhou Yihua Connector shareholders face the double whammy of a high net debt to EBITDA ratio (5.9), and fairly weak interest coverage, since EBIT is just 1.4 times the interest expense. The debt burden here is substantial. Even worse, Wenzhou Yihua Connector saw its EBIT tank 43% over the last 12 months. If earnings continue to follow that trajectory, paying off that debt load will be harder than convincing us to run a marathon in the rain. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine Wenzhou Yihua Connector'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.
由於息稅前利潤僅爲利息支出的1.4倍,溫州宜華連接器的股東面臨着淨負債與息稅折舊攤銷前利潤比率高(5.9)和相當薄弱的利息覆蓋率的雙重打擊。這裏的債務負擔是沉重的。更糟糕的是,溫州億華連接器的息稅前利潤在過去12個月中下降了43%。如果收益繼續保持這一軌跡,那麼償還債務負擔將比說服我們在雨中跑一場馬拉松更難。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。但是,未來的收益比什麼都重要,將決定溫州宜華連接器未來維持健康資產負債表的能力。因此,如果你想看看專業人士的想法,你可能會發現這份關於分析師利潤預測的免費報告很有趣。
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. So it's worth checking how much of that EBIT is backed by free cash flow. During the last three years, Wenzhou Yihua Connector burned a lot of cash. While that may be a result of expenditure for growth, it does make the debt far more risky.
最後,儘管稅務人員可能喜歡會計利潤,但貸款人只接受冷硬現金。因此,值得檢查一下息稅前利潤中有多少是由自由現金流支持的。在過去的三年中,溫州宜華連接器燒燬了大量現金。儘管這可能是增長支出的結果,但它確實使債務風險大大增加。
Our View
我們的觀點
To be frank both Wenzhou Yihua Connector's conversion of EBIT to free cash flow and its track record of (not) growing its EBIT make us rather uncomfortable with its debt levels. Having said that, its ability to handle its total liabilities isn't such a worry. We're quite clear that we consider Wenzhou Yihua Connector to be really rather risky, as a result of its balance sheet health. For this reason we're pretty cautious about the stock, and we think shareholders should keep a close eye on its liquidity. 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. For instance, we've identified 3 warning signs for Wenzhou Yihua Connector (1 is a bit unpleasant) you should be aware of.
坦率地說,溫州怡華連接器將息稅前利潤轉換爲自由現金流,以及其(不)增長息稅前利潤的往績都使我們對其債務水平感到相當不舒服。話雖如此,它處理總負債的能力並不令人擔憂。我們很清楚,由於其資產負債表狀況良好,我們認爲溫州宜華連接器確實存在相當大的風險。出於這個原因,我們對該股非常謹慎,我們認爲股東應密切關注其流動性。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。例如,我們已經確定了溫州宜華連接器的 3 個警告標誌(1 個有點不愉快),你應該注意。
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.
歸根結底,通常最好將注意力集中在沒有淨負債的公司身上。您可以訪問我們的此類公司的特別名單(所有公司都有利潤增長記錄)。它是免費的。
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Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。