Here's Why Shenzhen Megmeet Electrical (SZSE:002851) Can Manage Its Debt Responsibly
Here's Why Shenzhen Megmeet Electrical (SZSE:002851) Can Manage Its Debt Responsibly
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 can see that Shenzhen Megmeet Electrical Co., LTD (SZSE:002851) does use debt in its business. But should shareholders be worried about its use of debt?
傳奇基金經理李錄(得到了查理·芒格的支持)曾經說過,“最大的投資風險不在於價格的波動,而在於你是否會承受永久性的資本損失。”當我們考慮一個公司的風險時,我們總是喜歡看它的債務使用情況,因爲債務過載可能導致破產。我們可以看到,深圳市麥格米特電氣股份有限公司(SZSE:002851)在其業務中使用了債務。但是,股東們應該擔心其債務使用嗎?
When Is Debt A Problem?
什麼時候負債才是一個問題?
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 common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we think about a company's use of debt, we first look at cash and debt together.
一般來說,當公司難以通過籌集資本或自有現金流來輕鬆償還債務時,債務才真正成爲一個問題。與資本主義的一個重要組成部分是“創造性破壞”過程相伴而來,失敗的企業被銀行家無情地清算。然而,更常見(但仍然痛苦)的情況是,它必須以低價募集新的股權資本,從而永久性地稀釋股東權益。話雖如此,最常見的情況是公司合理地控制其債務——並且對其本身有利。當我們考慮公司使用債務時,我們首先看現金和債務。
What Is Shenzhen Megmeet Electrical's Net Debt?
深圳市麥格米特電氣股份有限公司的淨債務是多少?
You can click the graphic below for the historical numbers, but it shows that as of March 2024 Shenzhen Megmeet Electrical had CN¥2.23b of debt, an increase on CN¥1.42b, over one year. On the flip side, it has CN¥1.78b in cash leading to net debt of about CN¥453.4m.
你可以點擊下面的圖表查看歷史數據,但它顯示,截至2024年3月,深圳市麥格米特電氣股份有限公司的負債達22.3億元,較上年的14.2億元增加。另一方面,它有17.8億元的現金,導致淨債務約爲453.4萬元。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240707/0-a71a1afbdbf87e4688da69222be7f110-0-131c488bf424bee15fbc60ee6b76b8e2.png/big)
How Strong Is Shenzhen Megmeet Electrical's Balance Sheet?
深圳市麥格米特電氣股份有限公司的資產負債表有多強?
Zooming in on the latest balance sheet data, we can see that Shenzhen Megmeet Electrical had liabilities of CN¥4.45b due within 12 months and liabilities of CN¥1.49b due beyond that. Offsetting this, it had CN¥1.78b in cash and CN¥2.67b in receivables that were due within 12 months. So it has liabilities totalling CN¥1.49b more than its cash and near-term receivables, combined.
放大最新的資產負債表數據,我們可以看到深圳市麥格米特電氣股份有限公司分別有445億元的負債在12個月內到期,149億元的負債超過12個月到期。與此相抵消的是,它有17.8億元的現金和26.7億元應於12個月內到期的應收賬款。因此,它的負債總額比其現金和短期應收賬款總額高出1.49億元。
Since publicly traded Shenzhen Megmeet Electrical shares are worth a total of CN¥11.9b, it seems unlikely that this level of liabilities would be a major threat. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse.
由於深圳市麥格米特電氣股份有限公司上市股份總值爲119億元,似乎這種程度的負債不會構成主要威脅。話雖如此,很明顯我們應該繼續監控其資產負債表,以防惡化。
We use two main ratios to inform us about debt levels relative to earnings. The first is net debt divided by earnings before interest, tax, depreciation, and amortization (EBITDA), while the second is how many times its earnings before interest and tax (EBIT) covers its interest expense (or its interest cover, for short). Thus we consider debt relative to earnings both with and without depreciation and amortization expenses.
我們使用兩個主要的比率來告訴我們相對於收益的債務水平。第一個是淨債務除以利息、稅、折舊和攤銷前利潤(EBITDA),而第二個是其利潤前利息和稅(EBIT)覆蓋其利息費用的次數(或其利息覆蓋率,簡稱)。因此,我們考慮與折舊和攤銷費用相關的盈利以及沒有相關費用的盈利相對於債務水平。
Shenzhen Megmeet Electrical has a low net debt to EBITDA ratio of only 0.87. And its EBIT covers its interest expense a whopping 14.2 times over. So you could argue it is no more threatened by its debt than an elephant is by a mouse. And we also note warmly that Shenzhen Megmeet Electrical grew its EBIT by 11% last year, making its debt load easier to handle. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if Shenzhen Megmeet Electrical can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.
深圳市麥格米特電氣股份有限公司具有非常低的淨債務與息稅前利潤比(EBITDA)僅爲0.87。而且其息稅前利潤(EBIT)覆蓋其利息費用的倍數高達14.2倍。因此,你可以認爲它受債務的威脅不比大象受到老鼠的威脅更大。我們還熱情地注意到,深圳市麥格米特電氣股份有限公司去年的EBIT增長了11%,這使得其債務負擔更容易處理。當分析債務水平時,資產負債表是明顯的起點。但是,最終企業的未來盈利能力將決定深圳市麥格米特電氣股份有限公司是否能夠隨着時間的推移加強其資產負債表。因此,如果你想知道專業人士的想法,你可能會發現這份免費報告以及分析師利潤預測有趣。
Finally, a company can only pay off debt with cold hard cash, not accounting profits. So it's worth checking how much of that EBIT is backed by free cash flow. Over the last three years, Shenzhen Megmeet Electrical saw substantial negative free cash flow, in total. While investors are no doubt expecting a reversal of that situation in due course, it clearly does mean its use of debt is more risky.
最後,一個公司只能用冰冷的現金而非會計利潤還清債務。因此,檢查多少EBIt是由自由現金流支持的是值得的。在過去三年中,深圳市麥格米特電氣股份有限公司的自由現金流總額顯著爲負。儘管投資者無疑期望該情況會在適當的時候逆轉,但它顯然意味着其債務使用更具風險性。
Our View
我們的觀點
Based on what we've seen Shenzhen Megmeet Electrical is not finding it easy, given its conversion of EBIT to free cash flow, but the other factors we considered give us cause to be optimistic. In particular, we are dazzled with its interest cover. Considering this range of data points, we think Shenzhen Megmeet Electrical is in a good position to manage its debt levels. But a word of caution: we think debt levels are high enough to justify ongoing monitoring. 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 example, we've discovered 2 warning signs for Shenzhen Megmeet Electrical (1 is a bit concerning!) that you should be aware of before investing here.
根據我們的觀察,麥格米特的EBIT轉自由現金流並不容易,但我們考慮的其他因素使我們有理由保持樂觀態度。特別是,我們對其利息保障倍數印象深刻。考慮到這些數據點,我們認爲麥格米特在管理其債務水平方面處於良好的位置。但是,需要注意的是,我們認爲債務水平高到足以證明需要持續監控。資產負債表顯然是分析債務時的重點關注區域。但是,最終,每個公司都可能存在平衡表以外的風險。例如,我們發現麥格米特存在 2 個警示信號(其中 1 個有點讓人擔憂!)這些你在投資之前應該知道。
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.
如果您有興趣投資能夠在不負債的情況下增長利潤的企業,請查看這份免費列表,其中列出了在資產負債表上擁有淨現金的成長型企業。
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