Here's Why Jiangsu Huachang Chemical (SZSE:002274) Can Manage Its Debt Responsibly
Here's Why Jiangsu Huachang Chemical (SZSE:002274) Can Manage Its Debt Responsibly
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.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. Importantly, Jiangsu Huachang Chemical Co., Ltd (SZSE:002274) does carry debt. But the more important question is: how much risk is that debt creating?
當談到風險投資時,巴菲特旗下的外部基金經理、李錄(Li Lu)就毫不掩飾地說:“最大的投資風險不是價格的波動,而是你是否會承受資本永久損失。” 考慮到許多企業破產時都涉及債務,因此在評估風險時自然需要考慮公司的資產負債表。事關重大的是:這些債務會帶來多大的風險?
When Is Debt Dangerous?
債務何時有危險?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. If things get really bad, the lenders can take control of the business. 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. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
負債可以幫助企業,直至企業因新資本或自由現金流無法償還而陷入困境。如果情況變得非常糟糕,借款人可以控制企業。儘管這不太常見,但我們經常看到負債企業因貸款人強制其以低價融資而永久稀釋股東。然而,通過替代稀釋,負債可以成爲需要資本以高回報率投資增長的企業的極好工具。考慮企業使用多少負債時,首先要看的是其現金和債務總額。
What Is Jiangsu Huachang Chemical's Net Debt?
江蘇華昌化工的淨債務是多少?
The image below, which you can click on for greater detail, shows that Jiangsu Huachang Chemical had debt of CN¥268.6m at the end of March 2024, a reduction from CN¥660.9m over a year. But it also has CN¥783.8m in cash to offset that, meaning it has CN¥515.1m net cash.
下面這張圖片,你可以點擊以獲取更詳細的信息,顯示江蘇華昌化工在2024年3月末的債務爲2.686億元人民幣,是去年同期6.609億元人民幣的降低。但是,它還有7.838億元人民幣的現金來抵消這些債務,因此其淨現金爲5.151億元人民幣。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240528/0-f640b3baac9ebf0f0670e20ec91df80c-0-41f4ffab9ba031e6fb236baaf44c31b3.png/big)
How Healthy Is Jiangsu Huachang Chemical's Balance Sheet?
江蘇華昌化工財務狀況如何?
Zooming in on the latest balance sheet data, we can see that Jiangsu Huachang Chemical had liabilities of CN¥2.53b due within 12 months and liabilities of CN¥7.40m due beyond that. Offsetting this, it had CN¥783.8m in cash and CN¥1.35b in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by CN¥401.9m.
詳細查看最新財務狀況數據後,我們發現江蘇華昌化工有2.53億元人民幣的負債到期在12個月內,740萬元人民幣的負債到期在一年以後。抵消這些負債的話,它有7.838億元人民幣的現金和12個月內到期的應收賬款1.35億元人民幣。因此,其負債大於其現金和(短期)應收賬款之和401.9萬元人民幣。
Given Jiangsu Huachang Chemical has a market capitalization of CN¥7.79b, it's hard to believe these liabilities pose much threat. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse. While it does have liabilities worth noting, Jiangsu Huachang Chemical also has more cash than debt, so we're pretty confident it can manage its debt safely.
考慮到江蘇華昌化工的市值爲7.79億元人民幣,很難想象這些負債會帶來多大的威脅。話雖如此,我們仍需要繼續監測它的資產負債表,以防情況惡化。儘管它有值得注意的負債,但江蘇華昌化工也有比債務更多的現金,因此我們相當有信心它能夠安全地管理債務。
On the other hand, Jiangsu Huachang Chemical's EBIT dived 10%, over the last year. We think hat kind of performance, if repeated frequently, could well lead to difficulties for the stock. The balance sheet is clearly the area to focus on when you are analysing debt. But it is Jiangsu Huachang Chemical's earnings that will influence how the balance sheet holds up in the future. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.
另一方面,江蘇華昌化工的息稅前收益下降了10%。我們認爲,如果這種表現經常重複,很可能會導致該股票的困難。顯然,在分析債務時,需要關注資產負債表。但企業的盈利情況也將影響資產負債表未來的表現。因此,在考慮債務時,值得看一下盈利趨勢。單擊此處獲取交互快照。
Finally, a company can only pay off debt with cold hard cash, not accounting profits. Jiangsu Huachang Chemical may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. Over the most recent three years, Jiangsu Huachang Chemical recorded free cash flow worth 72% of its EBIT, which is around normal, given free cash flow excludes interest and tax. This free cash flow puts the company in a good position to pay down debt, when appropriate.
最後,企業只有通過冰冷的現金而不是會計利潤來償還債務。儘管江蘇華昌化工財務狀況表現出有淨現金,但了解企業如何將其息稅前收益(EBIT)轉化爲自由現金流,因爲這將影響其管理債務的需求和能力,仍然是有趣的。在過去三年中,江蘇華昌化工錄得的自由現金流價值相當於其EBIT的72%,這是比較正常的,因爲自由現金流不包括利息和稅收。這種自由現金流的表現使公司有能力在適當時償還債務。
Summing Up
總之
We could understand if investors are concerned about Jiangsu Huachang Chemical's liabilities, but we can be reassured by the fact it has has net cash of CN¥515.1m. The cherry on top was that in converted 72% of that EBIT to free cash flow, bringing in CN¥556m. So we are not troubled with Jiangsu Huachang Chemical's debt use. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. Be aware that Jiangsu Huachang Chemical is showing 1 warning sign in our investment analysis , you should know about...
我們能理解投資者對華昌化工的負債感到擔憂,但我們可以放心,因爲它已經有5,151,000元人民幣的淨現金。更棒的是,它將其中72%的經營利潤轉化爲自由現金流,帶來了5,560,000元人民幣的自由現金流。因此,我們對華昌化工的負債使用沒有什麼顧慮。在分析債務水平時,資產負債表顯然是開始的好地方。然而,並非所有的投資風險都屬於資產負債表——遠非如此。請注意,華昌化工在我們的投資分析中顯示了一個警告信號,您應該了解......
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.
說到底,有時候更容易集中精力關注根本不需要債務的公司。讀者可以免費訪問零淨債務增長股票列表。
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這篇文章是Simply Wall St的一般性文章。我們根據歷史數據和分析師預測提供評論,只使用公正的方法論,我們的文章並不意味着提供任何金融建議。文章不構成買賣任何股票的建議,也不考慮您的目標或您的財務狀況。我們的目標是帶給您基本數據驅動的長期關注分析。請注意,我們的分析可能不考慮最新的價格敏感公司公告或定性材料。Simply Wall St沒有任何股票頭寸。