We Think Fujian Torch Electron Technology (SHSE:603678) Can Stay On Top Of Its Debt
We Think Fujian Torch Electron Technology (SHSE:603678) Can Stay On Top Of Its Debt
Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, Fujian Torch Electron Technology Co., Ltd. (SHSE:603678) does carry debt. But the real question is whether this debt is making the company risky.
有人说,波动性,而不是债务,是投资者思考风险的最佳方式,但沃伦·巴菲特曾说过一句名言:“波动性远非风险的代名词。”因此,当你评估公司的风险时,看来聪明的货币知道债务(通常涉及破产)是一个非常重要的因素。重要的是,福建火炬电子科技股份有限公司(SHSE: 603678)确实有债务。但真正的问题是这笔债务是否使公司面临风险。
When Is Debt Dangerous?
债务何时危险?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. 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. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we think about a company's use of debt, we first look at cash and debt together.
当企业无法轻易履行这些义务时,无论是通过自由现金流还是以诱人的价格筹集资金,债务和其他负债就会面临风险。资本主义的重要部分是 “创造性破坏” 的过程,在这个过程中,倒闭的企业被银行家无情地清算。但是,更常见(但仍然令人痛苦)的情况是,它必须以低廉的价格筹集新的股权资本,从而永久稀释股东。当然,债务可能是企业的重要工具,尤其是资本密集型企业。当我们考虑公司对债务的使用时,我们首先要同时考虑现金和债务。
What Is Fujian Torch Electron Technology's Net Debt?
福建火炬电子科技的净负债是多少?
The image below, which you can click on for greater detail, shows that at December 2023 Fujian Torch Electron Technology had debt of CN¥1.45b, up from CN¥1.34b in one year. On the flip side, it has CN¥1.15b in cash leading to net debt of about CN¥300.2m.
您可以点击下图查看更多详情,该图片显示,截至2023年12月,福建火炬电子科技的债务为14.5亿元人民币,高于一年内的13.4亿元人民币。另一方面,它拥有11.5亿元的现金,净负债约为3.002亿元人民币。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240419/0-f58a899be3c0b982c9c84b0fcddd47f2-0-21f24ba3aa4bddb84d1067e0dcff9c04.png/big)
A Look At Fujian Torch Electron Technology's Liabilities
看看福建火炬电子科技的负债
We can see from the most recent balance sheet that Fujian Torch Electron Technology had liabilities of CN¥1.25b falling due within a year, and liabilities of CN¥1.00b due beyond that. On the other hand, it had cash of CN¥1.15b and CN¥2.13b worth of receivables due within a year. So it actually has CN¥1.03b more liquid assets than total liabilities.
我们可以从最新的资产负债表中看出,福建火炬电子科技的负债为12.5亿元人民币,一年后到期的负债为10亿元人民币。另一方面,它有一年内到期的现金为11.5亿元人民币,还有价值21.3亿元人民币的应收账款。所以它实际上有1.03亿元人民币 更多 流动资产超过总负债。
This short term liquidity is a sign that Fujian Torch Electron Technology could probably pay off its debt with ease, as its balance sheet is far from stretched.
这种短期的流动性表明,福建火炬电子科技可能会轻松偿还债务,因为其资产负债表远未捉襟见肘。
We measure a company's debt load relative to its earnings power by looking at its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and by calculating how easily its earnings before interest and tax (EBIT) cover its interest expense (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).
我们通过以下方法来衡量公司的债务负担与其盈利能力:将其净负债除以利息、税项、折旧和摊销前的收益(EBITDA),并计算其利息和税前收益(EBIT)支付利息支出(利息保障)的难易程度。这种方法的优势在于,我们既考虑了债务的绝对数量(包括净负债与息税折旧摊销前利润),也考虑了与该债务相关的实际利息支出(及其利息覆盖率)。
Fujian Torch Electron Technology has a low net debt to EBITDA ratio of only 0.52. And its EBIT easily covers its interest expense, being 10.7 times the size. So we're pretty relaxed about its super-conservative use of debt. It is just as well that Fujian Torch Electron Technology's load is not too heavy, because its EBIT was down 61% over the last year. Falling earnings (if the trend continues) could eventually make even modest debt quite risky. 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 Fujian Torch Electron Technology'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.
福建火炬电子科技的净负债与息税折旧摊销前利润的比率很低,仅为0.52。而且其息税前利润很容易弥补其利息支出,是其规模的10.7倍。因此,我们对它超保守的债务使用相当放松。福建火炬电子科技的负荷也不是太重,因为其息税前利润比去年下降了61%。收益下降(如果这种趋势持续下去)最终也可能使即使是微不足道的债务也相当危险。资产负债表显然是分析债务时需要关注的领域。但是,未来收益将决定福建火炬电子科技未来保持健康资产负债表的能力。因此,如果你想看看专业人士的想法,你可能会发现这份关于分析师利润预测的免费报告很有趣。
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. So the logical step is to look at the proportion of that EBIT that is matched by actual free cash flow. In the last three years, Fujian Torch Electron Technology's free cash flow amounted to 30% of its EBIT, less than we'd expect. That's not great, when it comes to paying down debt.
最后,尽管税务人员可能喜欢会计利润,但贷款人只接受冷硬现金。因此,合乎逻辑的步骤是研究息税前利润与实际自由现金流相匹配的比例。在过去三年中,福建火炬电子科技的自由现金流占其息税前利润的30%,低于我们的预期。在偿还债务方面,这并不好。
Our View
我们的观点
Fujian Torch Electron Technology's EBIT growth rate was a real negative on this analysis, although the other factors we considered were considerably better. In particular, we are dazzled with its interest cover. When we consider all the factors mentioned above, we do feel a bit cautious about Fujian Torch Electron Technology's use of debt. While we appreciate debt can enhance returns on equity, we'd suggest that shareholders keep close watch on its debt levels, lest they increase. 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. To that end, you should be aware of the 2 warning signs we've spotted with Fujian Torch Electron Technology .
尽管我们考虑的其他因素要好得多,但福建火炬电子科技的息税前利润增长率在这项分析中确实是负面的。特别是,它的兴趣封面令我们眼花缭乱。当我们考虑上述所有因素时,我们确实对福建火炬电子科技的债务使用感到有些谨慎。尽管我们意识到债务可以提高股本回报率,但我们建议股东密切关注其债务水平,以免债务增加。资产负债表显然是分析债务时需要关注的领域。但是,并非所有的投资风险都存在于资产负债表中,远非如此。为此,你应该注意我们在福建火炬电子科技发现的两个警告信号。
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.
毕竟,如果你对一家资产负债表坚如磐石的快速成长型公司更感兴趣,那么请立即查看我们的净现金增长股票清单。
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