We Think China Design Group (SHSE:603018) Can Manage Its Debt With Ease
We Think China Design Group (SHSE:603018) Can Manage Its Debt With Ease
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. As with many other companies China Design Group Co., Ltd. (SHSE:603018) makes use of debt. But the real question is whether this debt is making the company risky.
傳奇基金經理李錄(由查理·芒格支持)曾說:「最大的投資風險不是價格的波動性,而是你是否會遭受永久性資本損失。」當我們考慮一家公司的風險時,我們總是喜歡看它的債務使用情況,因爲債務過重可能導致破產。和許多其他公司一樣,華設集團股份有限公司(SHSE:603018)也使用債務。但真正的問題是這些債務是否使公司變得風險很高。
When Is Debt Dangerous?
債務何時有危險?
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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.
債務是幫助企業發展的工具,但如果一個企業無法償還債權人的債務,那它就存在於債權人的掌控之下。最終,如果公司無法履行償還債務的法律責任,股東可能會一無所獲。然而,一個更常見(但仍然痛苦)的情況是,公司不得不以低價發行新的股本,從而永久稀釋股東的權益。當然,很多公司使用債務來資助增長,沒有任何負面後果。當我們考慮一家公司的債務使用情況時,我們首先看現金和債務的總體情況。
How Much Debt Does China Design Group Carry?
華設集團承擔多少債務?
As you can see below, at the end of March 2024, China Design Group had CN¥484.6m of debt, up from CN¥259.3m a year ago. Click the image for more detail. But it also has CN¥1.89b in cash to offset that, meaning it has CN¥1.40b net cash.
正如下圖所示,截至2024年3月底,華設集團的債務爲48460萬人民幣,較一年前的25930萬人民幣有所增加。請點擊圖片了解更多細節。但它也有18.9億人民幣的現金來抵消,意味着它有14億人民幣的淨現金。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240529/0-4f1b8182062dab37b5573360fd7fe297-0-a3a36206a3158c7ae6abb2f918f66d51.png/big)
How Healthy Is China Design Group's Balance Sheet?
中國設計集團的資產負債表有多健康?
According to the last reported balance sheet, China Design Group had liabilities of CN¥6.93b due within 12 months, and liabilities of CN¥453.3m due beyond 12 months. On the other hand, it had cash of CN¥1.89b and CN¥8.16b worth of receivables due within a year. So it can boast CN¥2.66b more liquid assets than total liabilities.
根據最近披露的資產負債表顯示,中國設計集團有69.3億人民幣的應付款項需要在12個月內償還,45330萬人民幣的應付款項需要在12個月以上償還。另一方面,集團有18.9億人民幣的現金,以及81.6億人民幣的應收款項,這些都是一年內需要償還的。所以,它比流動資產多出了26.6億人民幣。 總負債。
This surplus liquidity suggests that China Design Group's balance sheet could take a hit just as well as Homer Simpson's head can take a punch. Having regard to this fact, we think its balance sheet is as strong as an ox. Succinctly put, China Design Group boasts net cash, so it's fair to say it does not have a heavy debt load!
這個盈餘流動資金表明,中國設計集團的資產負債表能夠承受壓力,就像霍默·辛普森的頭一樣能承受一拳。考慮到這一事實,我們認爲它的資產負債表像公牛一樣強壯。簡而言之,中國設計集團擁有淨現金,因此可以說它沒有沉重的債務負擔!
China Design Group's EBIT was pretty flat over the last year, but that shouldn't be an issue given the it doesn't have a lot of debt. The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine China Design Group's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
中國設計集團的息稅前利潤在過去一年基本持平,但鑑於它沒有太多債務,這並不是問題。當你分析債務時,資產負債表顯然是需要關注的領域。但最終確定中國設計集團能否保持健康的資產負債表取決於未來收入。所以,如果你關注未來,可以查看分析師盈利預測的免費報告。
Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. China Design Group 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. During the last three years, China Design Group produced sturdy free cash flow equating to 59% of its EBIT, about what we'd expect. This cold hard cash means it can reduce its debt when it wants to.
最後,業務需要自由現金流來償還債務;會計利潤不足以做到這一點。中國設計集團可能在資產負債表上有淨現金,但看看業務如何將息稅前利潤轉化爲自由現金流仍然是有趣的,因爲這將影響它對債務的需求和管理能力。在過去三年中,中國設計集團產生了可觀的自由現金流,相當於其息稅前利潤的59%,這正是我們所期望的。這筆冷硬現金意味着它可以在需要時減少債務。
Summing Up
總之
While it is always sensible to investigate a company's debt, in this case China Design Group has CN¥1.40b in net cash and a decent-looking balance sheet. So is China Design Group'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. However, not all investment risk resides within the balance sheet - far from it. For example, we've discovered 1 warning sign for China Design Group that you should be aware of before investing here.
儘管調查公司的債務是明智的,但在這種情況下,華設集團擁有14億人民幣的淨現金和一個看起來不錯的資產負債表。所以,華設集團的債務是否存在風險?在我們看來似乎並沒有。資產負債表顯然是在分析債務時需要關注的領域。然而,並不是所有的投資風險都存在於資產負債表中-遠非如此。例如,我們發現了一個對於華設集團的警示信號,您在此投資之前應該注意。
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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