Here's Why Shanghai Dazhong Public Utilities(Group)Ltd (SHSE:600635) Can Manage Its Debt Responsibly
Here's Why Shanghai Dazhong Public Utilities(Group)Ltd (SHSE:600635) Can Manage Its Debt Responsibly
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' 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 Shanghai Dazhong Public Utilities(Group) Co.,Ltd. (SHSE:600635) makes use of debt. But is this debt a concern to shareholders?
禾倫·巴菲特曾 famously 說過,『波動性並不等同於風險。』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,因爲債務過重可能導致破產。與許多其他公司一樣,大眾公用(集團)有限公司(SHSE:600635)也在使用債務。但是,這對股東來說是個問題嗎?
Why Does Debt Bring Risk?
爲什麼債務帶來風險?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. The first step when considering a company's debt levels is to consider its cash and debt together.
債務在企業面臨償還困難時,會造成問題,不論是通過新資本還是自由現金流。在最壞的情況下,如果公司無法償還債權人,可能會破產。然而,較爲常見(但仍然代價高昂)的情況是,公司必須以較低的股價稀釋股東,僅僅是爲了控制債務。當然,債務的好處在於它通常代表了便宜的資本,尤其是當它替代了可以以高回報率再投資的公司中的稀釋時。考慮一家公司的債務水平時,第一步是將其現金和債務一起考慮。
What Is Shanghai Dazhong Public Utilities(Group)Ltd's Debt?
上海大眾公用(集團)有限公司的債務是什麼?
As you can see below, Shanghai Dazhong Public Utilities(Group)Ltd had CN¥8.10b of debt, at September 2024, which is about the same as the year before. You can click the chart for greater detail. However, it also had CN¥3.57b in cash, and so its net debt is CN¥4.53b.
如您所見,到2024年9月,大眾公用(集團)有限公司的債務爲81億人民幣,和去年差不多。您可以點擊圖表查看更詳細的信息。然而,它也擁有35.7億人民幣的現金,因此,其淨債務爲45.3億人民幣。
How Strong Is Shanghai Dazhong Public Utilities(Group)Ltd's Balance Sheet?
上海大眾公用(集團)有限公司的資產負債表有多強?
According to the last reported balance sheet, Shanghai Dazhong Public Utilities(Group)Ltd had liabilities of CN¥8.44b due within 12 months, and liabilities of CN¥4.31b due beyond 12 months. On the other hand, it had cash of CN¥3.57b and CN¥486.1m worth of receivables due within a year. So it has liabilities totalling CN¥8.69b more than its cash and near-term receivables, combined.
根據最近報告的資產負債表,上海大眾公用(集團)有限公司在12個月內的負債爲84.4億人民幣,12個月後的負債爲43.1億人民幣。另一方面,它的現金爲35.7億人民幣,未來一年到期的應收賬款爲48610萬人民幣。因此,它的負債總額爲86.9億人民幣,遠遠超過其現金和短期應收款的總和。
This deficit is considerable relative to its market capitalization of CN¥10.0b, so it does suggest shareholders should keep an eye on Shanghai Dazhong Public Utilities(Group)Ltd's use of debt. Should its lenders demand that it shore up the balance sheet, shareholders would likely face severe dilution.
相對於其100億人民幣的市值,這一赤字是相當可觀的,因此這確實表明股東應關注上海大眾公用(集團)有限公司的債務使用。如果其貸方要求其增強資產負債表,股東可能將面臨嚴重的稀釋。
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). This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it.
爲了評估一家公司的債務與其收益的關係,我們計算其淨債務與息稅折舊攤銷前利潤(EBITDA)的比率,以及息稅前利潤(EBIT)與利息費用的比率(即利息覆蓋率)。通過這種方式,我們考慮了債務的絕對數量和所支付的利率。
As it happens Shanghai Dazhong Public Utilities(Group)Ltd has a fairly concerning net debt to EBITDA ratio of 6.4 but very strong interest coverage of 1k. So either it has access to very cheap long term debt or that interest expense is going to grow! It is well worth noting that Shanghai Dazhong Public Utilities(Group)Ltd's EBIT shot up like bamboo after rain, gaining 41% in the last twelve months. That'll make it easier to manage its debt. When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since Shanghai Dazhong Public Utilities(Group)Ltd will need earnings to service that debt. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.
實際上,上海大眾公用(集團)有限公司的淨債務與EBITDA比率爲6.4,令人擔憂,但利息保障極其強大,達到0.1萬。因此,它要麼能夠獲得非常廉價的長期債務,要麼利息支出將會增長!值得注意的是,上海大眾公用(集團)有限公司的EBIT在過去12個月中像雨後竹筍一般猛增41%。這將使其更容易管理債務。當分析債務水平時,資產負債表顯然是最好的起點。但你不能將債務完全孤立看待;因爲上海大眾公用(集團)有限公司需要盈利來償還這筆債務。因此,在考慮債務時,查看盈利趨勢絕對是值得的。點擊這裏獲取互動快照。
Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. So we clearly need to look at whether that EBIT is leading to corresponding free cash flow. In the last three years, Shanghai Dazhong Public Utilities(Group)Ltd's free cash flow amounted to 38% of its EBIT, less than we'd expect. That weak cash conversion makes it more difficult to handle indebtedness.
最後,企業需要自由現金流來償還債務;會計利潤是不能滿足這個要求的。因此,我們顯然需要查看該EBIT是否導致相應的自由現金流。在過去三年中,上海大眾公用(集團)有限公司的自由現金流佔其EBIT的38%,低於我們的預期。這種現金轉化能力不足使得處理債務更加困難。
Our View
我們的觀點
Shanghai Dazhong Public Utilities(Group)Ltd's net debt to EBITDA was a real negative on this analysis, although the other factors we considered were considerably better. There's no doubt that its ability to to cover its interest expense with its EBIT is pretty flash. It's also worth noting that Shanghai Dazhong Public Utilities(Group)Ltd is in the Gas Utilities industry, which is often considered to be quite defensive. When we consider all the factors mentioned above, we do feel a bit cautious about Shanghai Dazhong Public Utilities(Group)Ltd's use of debt. While debt does have its upside in higher potential returns, we think shareholders should definitely consider how debt levels might make the stock more risky. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. Case in point: We've spotted 4 warning signs for Shanghai Dazhong Public Utilities(Group)Ltd you should be aware of, and 3 of them are significant.
大眾公用(集團)有限公司的淨債務與EBITDA比例在這項分析中表現得相當糟糕,儘管我們考慮的其他因素要好得多。毫無疑問,它用EBIT覆蓋利息支出的能力相當出色。值得一提的是,大眾公用(集團)有限公司位於燃氣公用事業行業,這通常被認爲是相當防禦性的。考慮到上述所有因素,我們對大眾公用(集團)有限公司的債務使用確實感到有些謹慎。雖然債務在提高潛在回報方面確實有其好處,但我們認爲股東們應該考慮債務水平如何使得股票風險增加。在分析債務水平時,資產負債表顯然是一個起點。但歸根結底,每家公司都可能存在資產負債表外的風險。舉個例子:我們發現了大眾公用(集團)有限公司的4個警告信號,你應該對此有所了解,其中3個是重要的。
If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.
If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
對本文有反饋?對內容有疑慮?請直接與我們聯繫。或者,發送電子郵件至 editorial-team (at) simplywallst.com。
這篇來自Simply Wall ST的文章是一般性的。我們根據歷史數據和分析師預測提供評論,採用無偏見的方法,我們的文章並不旨在提供財務建議。它不構成對任何股票的買入或賣出建議,也未考慮到您的目標或財務狀況。我們旨在爲您提供以基本數據驅動的長期分析。請注意,我們的分析可能未考慮最新的價格敏感公司公告或定性材料。Simply Wall ST在提到的任何股票中均沒有持倉。