Here's Why H World Group (NASDAQ:HTHT) Can Manage Its Debt Responsibly
Here's Why H World Group (NASDAQ:HTHT) 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 note that H World Group Limited (NASDAQ:HTHT) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?
传奇基金经理李录(得到了查理·芒格的支持)曾经说过:“最大的投资风险不是价格的波动性,而是你是否会遭受到永久性的资本损失。” 当我们考虑公司的风险时,我们总是喜欢看它的债务使用情况,因为债务过载可能会导致破产。我们注意到,H World Group Limited (NASDAQ:HTHT) 在资产负债表上确实有债务。但更重要的问题是:这些债务会产生多少风险?
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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.
债务是帮助企业成长的工具,但如果企业无法偿还债务,那它就处于债权人的控制之中。最终,如果公司无法履行偿还债务的法律义务,股东可能一无所获。虽然这并不常见,但我们经常看到负债的公司由于债权人强迫它们以低价筹集资金而永久性地稀释股东利益。当然,债务可以是企业中重要的工具,特别是对于资本密集型企业。当我们审查债务水平时,我们首先考虑现金和债务水平。
How Much Debt Does H World Group Carry?
H World Group 承载了多少债务?
The image below, which you can click on for greater detail, shows that H World Group had debt of CN¥5.54b at the end of June 2024, a reduction from CN¥5.83b over a year. But on the other hand it also has CN¥8.91b in cash, leading to a CN¥3.38b net cash position.
下面的图片显示,H World Group 在2024年6月底的债务为55.4亿人民币,较去年减少了3.83亿人民币。但另一方面,它也有89.1亿人民币的现金,导致净现金位33.8亿人民币。
![1724332115431](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240822/42737949-0-116511612a0a49d7b2bab61ab44a27b4.webp/bigjpg)
A Look At H World Group's Liabilities
华住集团负债情况一览
Zooming in on the latest balance sheet data, we can see that H World Group had liabilities of CN¥11.9b due within 12 months and liabilities of CN¥37.9b due beyond that. Offsetting these obligations, it had cash of CN¥8.91b as well as receivables valued at CN¥1.26b due within 12 months. So its liabilities total CN¥39.6b more than the combination of its cash and short-term receivables.
仔细研究最新的资产负债表数据,我们可以看到华住集团有119亿人民币的短期负债和379亿人民币的长期负债。 抵消这些义务,其现金为89.1亿人民币,应收账款为12.6亿人民币,截至12个月。 所以它的负债总额比现金和短期应收款项的总和多出396亿人民币。
This is a mountain of leverage relative to its market capitalization of CN¥61.9b. This suggests shareholders would be heavily diluted if the company needed to shore up its balance sheet in a hurry. While it does have liabilities worth noting, H World Group also has more cash than debt, so we're pretty confident it can manage its debt safely.
相对于其619亿人民币的市值,这是一座负债之山。这意味着如果公司需要迅速补充资产负债表,股东的权益将被严重稀释。 虽然它确实有一定的负债,但华住集团的现金超过了债务,所以我们相当有信心地认为它能够安全地处理债务。
Better yet, H World Group grew its EBIT by 114% last year, which is an impressive improvement. That boost will make it even easier to pay down debt going forward. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if H World Group 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.
更好的是,去年华住集团的EBIt增长了114%,这是一个令人瞩目的改善。这种增长将使其更容易偿还债务。 在分析债务水平时,资产负债表是显而易见的起点。但最终,企业未来的盈利能力将决定华住集团能否随着时间的推移加强其资产负债表。因此,如果您想知道专业人士的想法,您可能会发现对分析师盈利预测的这份免费报告很有趣。
But our final consideration is also important, because a company cannot pay debt with paper profits; it needs cold hard cash. H World Group may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. Over the last two years, H World Group actually produced more free cash flow than EBIT. That sort of strong cash conversion gets us as excited as the crowd when the beat drops at a Daft Punk concert.
但我们最后要考虑的也很重要,因为一家公司无法用纸上的利润支付债务;它需要冰冷的现金。 华住集团可能在资产负债表上有净现金,但看看企业将其利润(利息和税前利润EBIT)转化为自由现金流的能力如何,这仍然很有趣,因为这将影响其对债务的需求和管理能力。 在过去的两年中,华住集团实际上产生了比EBIt更多的自由现金流。这种强劲的现金转换令我们和大众一样兴奋,就像在Daft Punk音乐会上跌落的节拍一样。
Summing Up
总之
While H World Group does have more liabilities than liquid assets, it also has net cash of CN¥3.38b. And it impressed us with free cash flow of CN¥5.7b, being 135% of its EBIT. So we don't think H World Group's use of debt is risky. 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 1 warning sign for H World Group that you should be aware of before investing here.
虽然华住集团的负债比流动资产多,但它也有33.8亿人民币的净现金。 并且它以57亿人民币的自由现金流令我们印象深刻,占其EBIt的135%。 所以我们认为华住集团使用债务并不冒险。 当您分析债务时,资产负债表显然是需要关注的领域。 但归根结底,每家公司都可能存在与资产负债表之外的风险。 例如,我们发现华住集团的1个警示信号,希望您在投资之前注意。
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.
如果您有兴趣投资能够在不负债的情况下增长利润的企业,请查看这份免费列表,其中列出了在资产负债表上拥有净现金的成长型企业。
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