ENN Energy Holdings (HKG:2688) Takes On Some Risk With Its Use Of Debt
ENN Energy Holdings (HKG:2688) Takes On Some Risk With Its Use Of Debt
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.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. Importantly, ENN Energy Holdings Limited (HKG:2688) does carry debt. But the real question is whether this debt is making the company risky.
传奇基金经理Li Lu(Charlie Munger所支持)曾说过,“最大的投资风险不是价格波动,而是你是否会遭受资本永久性损失。”因此,在考虑股票的风险时,有必要考虑债务,因为过多的债务会导致公司破产。值得注意的是,ENN Energy Holdings Limited(HKG:2688)确实有债务。但真正的问题在于,这种债务是否使公司面临风险。
When Is Debt A Problem?
什么时候负债才是一个问题?
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. If things get really bad, the lenders can take control of the business. 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. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
债务是帮助企业增长的工具,但如果企业无法偿还债权人,则该企业存在于债权人的怜悯之下。如果情况变得非常糟糕,债权人可以控制该企业。然而,一种更常见(但仍然很痛苦的)情况是,它必须以低价格筹集新的股权资本,从而永久稀释股东权益。话虽如此,最常见的情况是,公司合理地管理其债务,并使其对自身有利。考虑企业使用多少债务时,首先要做的是查看其现金和债务总额。
What Is ENN Energy Holdings's Net Debt?
ENNEnergyHoldings的净债务是多少?
The image below, which you can click on for greater detail, shows that at December 2023 ENN Energy Holdings had debt of CN¥22.2b, up from CN¥20.2b in one year. On the flip side, it has CN¥9.79b in cash leading to net debt of about CN¥12.4b.
下面的图片(可以单击以获取更多详细信息)显示,截至2023年12月,ENN Energy Holdings的债务为人民币222亿元,比一年增加了人民币202亿元。另一方面,它有人民币97.9亿元的现金,导致净债务约为人民币124亿元。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240626/0-f0c507e8bf27ceaa348b5879fe86c7d9-0-da114251a807df23499f6299e83c51a7.png/big)
How Healthy Is ENN Energy Holdings' Balance Sheet?
ENN Energy Holdings的资产负债表有多健康?
According to the last reported balance sheet, ENN Energy Holdings had liabilities of CN¥34.9b due within 12 months, and liabilities of CN¥19.9b due beyond 12 months. On the other hand, it had cash of CN¥9.79b and CN¥8.75b worth of receivables due within a year. So it has liabilities totalling CN¥36.3b more than its cash and near-term receivables, combined.
根据最近公布的资产负债表,ENN Energy Holdings的负债到期时间为一年内的人民币349亿元,超过12个月的负债为人民币199亿元。另一方面,它有人民币97.9亿元的现金和人民币87.5亿元的一年内应收款项。 因此,其负债总额超过现金和短期应收款项的总和为人民币363亿元。
While this might seem like a lot, it is not so bad since ENN Energy Holdings has a market capitalization of CN¥70.6b, and so it could probably strengthen its balance sheet by raising capital if it needed to. But we definitely want to keep our eyes open to indications that its debt is bringing too much risk.
虽然这可能看起来很多,但这并不太糟糕,因为ENN Energy Holdings的市值为人民币706亿元,因此如果需要,它可能可以通过提高资本来加强资产负债表。但我们绝对希望注意到其债务是否带来了太多的风险。
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).
卡比海运的净债务为1.7倍EBITDA,这表明它很好地利用了债务。 同时,EBIT利息覆盖(7.3倍)也证明卡比海运的利润完全足以支付管理费和计息费。此外,卡比海运过去12个月EBIT增长了64%,这种增长将使其更容易处理其债务。通过财务报表,我们确信该公司对债务的运用是明智的。然而,确保公司未来的盈利能力才是最终关键,这将决定卡比海运能否逐渐加强其资产负债表。此外,自由现金流还将帮助我们检查公司的出现的任何偏离预期的现金流。
ENN Energy Holdings has a low net debt to EBITDA ratio of only 1.1. And its EBIT easily covers its interest expense, being 19.5 times the size. So we're pretty relaxed about its super-conservative use of debt. But the bad news is that ENN Energy Holdings has seen its EBIT plunge 13% in the last twelve months. If that rate of decline in earnings continues, the company could find itself in a tight spot. There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if ENN Energy Holdings 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.
ENN Energy Holdings的净债务对EBITDA比率仅为1.1,而EBIT轻松覆盖其利息支出,规模是其19.5倍。因此,我们对其超级保守的债务使用非常放松。但坏消息是,ENN Energy Holdings最近12个月的EBIT下降了13%。如果收益下降的速度继续保持不变,公司可能会陷入困境。毫无疑问,我们从资产负债表上最了解债务状况。但是,最终业务的未来盈利能力将决定ENN Energy Holdings是否能够随着时间的推移加强其资产负债表。因此,如果您想了解专业人士的想法,则可能会发现这份分析师利润预测报告很有趣。
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. Looking at the most recent three years, ENN Energy Holdings recorded free cash flow of 36% of its EBIT, which is weaker than we'd expect. That's not great, when it comes to paying down debt.
最后,企业只能用冷硬的现金而不是会计利润偿还债务。因此,值得检查多少EBIT得到自由现金流的支持。从最近三年的情况来看,ENN Energy Holdings的自由现金流占其EBIT的36%,这比我们预期的要弱。这在偿付债务方面不好。
Our View
我们的观点
Neither ENN Energy Holdings's ability to grow its EBIT nor its level of total liabilities gave us confidence in its ability to take on more debt. But the good news is it seems to be able to cover its interest expense with its EBIT with ease. We should also note that Gas Utilities industry companies like ENN Energy Holdings commonly do use debt without problems. We think that ENN Energy Holdings's debt does make it a bit risky, after considering the aforementioned data points together. That's not necessarily a bad thing, since leverage can boost returns on equity, but it is something to be aware of. 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. We've identified 1 warning sign with ENN Energy Holdings , and understanding them should be part of your investment process.
无论是ENN Energy Holdings的EBIT增长能力还是其总负债水平,都没有让我们对其接受更多债务的能力感到信恳智能。但好消息是,它似乎能够轻松用EBIT支付利息。 我们还应该注意,像ENN Energy Holdings这样的燃料币的公用股公司通常会毫无问题地使用债务。考虑到上述数据点后,我们认为ENN Energy Holdings的债务确实存在一定风险。这不一定是坏事,因为杠杆比率可以提高股本收益率,但这是需要注意的。在分析债务水平时,资产负债表是显而易见的起点。然而,并非所有的投资风险都存在于资产负债表中。 我们已经确定了ENN Energy Holdings的一个警告信号,并且了解它们应该是您的投资过程的一部分。
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.
说到底,有时更容易关注那些甚至不需要债务的公司。读者可以免费查看零净债务增长股票列表,立即获得。
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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