These 4 Measures Indicate That Zhongshan Public Utilities GroupLtd (SZSE:000685) Is Using Debt Extensively
These 4 Measures Indicate That Zhongshan Public Utilities GroupLtd (SZSE:000685) Is Using Debt Extensively
The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says '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. We note that Zhongshan Public Utilities Group Co.,Ltd (SZSE:000685) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?
伯克希尔·哈撒韦旗下的基金经理李录毫不掩饰地表示:“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,当你思考任何给定的股票有多大风险时,需要考虑债务,因为过多的债务可能会使公司倒闭。我们注意到,Zhongshan Public Utilities Group Co.,Ltd(SZSE:000685)确实有债务在资产负债表上。但更重要的问题是:这些债务带来了多大的风险?
Why Does Debt Bring Risk?
为什么债务会带来风险?
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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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. When we think about a company's use of debt, we first look at cash and debt together.
一般来说,当公司无法轻松地偿还债务时,债务才真正成为问题,通常是通过筹集资本或借用自己的现金流来偿还。 最终,如果公司无法履行法律义务偿还债务,股东可能什么也得不到。 但是,更常见(但仍然昂贵)的情况是,公司必须以低廉的股价稀释股东,以便控制债务。 当然,债务的好处在于它通常代表着廉价的资本,特别是当它取代具有高回报能力的公司股票稀释能力时。 当我们考虑公司的债务使用情况时,首先看现金和债务。
What Is Zhongshan Public Utilities GroupLtd's Net Debt?
Zhongshan Public Utilities GroupLtd的净债务是多少?
The image below, which you can click on for greater detail, shows that at March 2024 Zhongshan Public Utilities GroupLtd had debt of CN¥8.06b, up from CN¥3.78b in one year. However, because it has a cash reserve of CN¥1.59b, its net debt is less, at about CN¥6.47b.
下面的图片(点击可放大),显示2024年3月,中山市公用事业集团有限公司负债80.6亿人民币,比一年前的37.8亿元人民币增加。但是,由于它有一个价值15.9亿人民币的现金储备,所以它的净债务较少,约为64.7亿人民币。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240702/0-7eda21be49e1adf9a43801b7cbca56b7-0-28b90f95c2440919ae0346bcca6a0fb4.png/big)
How Strong Is Zhongshan Public Utilities GroupLtd's Balance Sheet?
中山公用的资产负债表有多强?
We can see from the most recent balance sheet that Zhongshan Public Utilities GroupLtd had liabilities of CN¥6.80b falling due within a year, and liabilities of CN¥5.56b due beyond that. Offsetting these obligations, it had cash of CN¥1.59b as well as receivables valued at CN¥2.20b due within 12 months. So its liabilities total CN¥8.57b more than the combination of its cash and short-term receivables.
我们可以从最近的资产负债表上看到,中山公用的负债在一年内到期的有68亿元人民币,超过55.6亿到期外的负债。抵消这些义务,它拥有15.9亿元人民币的现金以及12个月内到期的22亿元人民币应收账款。因此,其负债总额比其现金和短期应收账款的组合多85.7亿元人民币。这比其107亿元人民币的市值还多。这表明,如果公司需要紧急筹集资金来弥补其资产负债表中的缺口,股东们将被大幅稀释。
This is a mountain of leverage relative to its market capitalization of CN¥10.7b. This suggests shareholders would be heavily diluted if the company needed to shore up its balance sheet in a hurry.
这是一座债务的山,相对于其107亿元的市值。这表明,如果公司需要紧急筹集资金以弥补其资产负债表中的缺口,股东们将被大幅稀释。
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). 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).
BJ批发俱乐部控股公司的净债务只有EBITDA的0.62倍。而其EBIT轻松覆盖其利息费用,比例为12.6倍。因此,我们对其超级保守的债务使用感到相当放心。虽然BJ批发俱乐部控股公司在EBIT方面没有取得太多进展,但至少其盈利保持稳定。当分析债务水平时,资产负债表是显然的切入点。但归根结底,企业未来的盈利能力将决定BJ批发俱乐部控股公司能否随着时间的推移加强资产负债表。因此,如果你要关注未来,可以查看一下这份免费的分析报告,了解分析师的盈利预测。
As it happens Zhongshan Public Utilities GroupLtd has a fairly concerning net debt to EBITDA ratio of 6.4 but very strong interest coverage of 1k. This means that unless the company has access to very cheap debt, that interest expense will likely grow in the future. Importantly, Zhongshan Public Utilities GroupLtd grew its EBIT by 62% over the last twelve months, and that growth will make it easier to handle its debt. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since Zhongshan Public Utilities GroupLtd 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.
恰恰中山公用的净债务与EBITDA比率相当令人担忧,为6.4,但利息覆盖率非常强,仅为0.1万。这意味着,除非公司拥有非常便宜的债务,否则利息支出在未来可能会增长。重要的是,中山公用的EBIt在过去12个月中增长了62%,这种增长将使它更容易处理其债务。毫无疑问,我们从资产负债表上了解最多的是债务情况。但是,你不能孤立地看待债务,因为中山公用需要盈利来偿还债务。因此,在考虑债务时,一定要关注收益趋势。点击此处查看交互快照。
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. So it's worth checking how much of that EBIT is backed by free cash flow. Over the last three years, Zhongshan Public Utilities GroupLtd saw substantial negative free cash flow, in total. While that may be a result of expenditure for growth, it does make the debt far more risky.
最后,虽然税务人员可能喜欢会计利润,但借贷方只接受冷硬的现金。因此,检查有多少EBIt得到自由现金流的支持是值得的。在过去三年中,中山公用的自由现金流总体上呈现出大幅负增长。虽然这可能是为了增长的支出,但它让债务的风险大大增加。
Our View
我们的观点
We feel some trepidation about Zhongshan Public Utilities GroupLtd's difficulty conversion of EBIT to free cash flow, but we've got positives to focus on, too. For example, its interest cover and EBIT growth rate give us some confidence in its ability to manage its debt. We should also note that Water Utilities industry companies like Zhongshan Public Utilities GroupLtd commonly do use debt without problems. When we consider all the factors discussed, it seems to us that Zhongshan Public Utilities GroupLtd is taking some risks with its use of debt. While that debt can boost returns, we think the company has enough leverage now. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. To that end, you should be aware of the 2 warning signs we've spotted with Zhongshan Public Utilities GroupLtd .
我们对中山公用的EBIt到自由现金流的转换存在一些担忧,但我们也有一些值得关注的积极因素。例如,其利息覆盖和EBIt的增长率为我们的信恳智能的源泉,我们相信它能够妥善处理其债务。我们还应该注意到,像中山公用这样的水务公司通常会毫不费力地使用债务。当我们考虑所有讨论过的因素时,我们觉得中山公用的债务使用存在一定风险。虽然这种债务可以增加回报,但我们认为公司现在已经有足够的杠杆,不必再去冒风险了。毫无疑问,关于债务,我们从资产负债表上了解最多。但最终,每个公司都可能存在超出资产负债表之外的风险。因此,您应该注意我们在中山公用发现的2个警告信号。
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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