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. As with many other companies Haitian International Holdings Limited (HKG:1882) makes use of debt. But is this debt a concern to shareholders?
Why Does Debt Bring Risk?
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. If things get really bad, the lenders can take control of the business. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. 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.
View our latest analysis for Haitian International Holdings
What Is Haitian International Holdings's Debt?
You can click the graphic below for the historical numbers, but it shows that as of June 2022 Haitian International Holdings had CN¥2.25b of debt, an increase on CN¥1.34b, over one year. But on the other hand it also has CN¥10.1b in cash, leading to a CN¥7.86b net cash position.
SEHK:1882 Debt to Equity History September 5th 2022
How Healthy Is Haitian International Holdings' Balance Sheet?
We can see from the most recent balance sheet that Haitian International Holdings had liabilities of CN¥8.51b falling due within a year, and liabilities of CN¥493.2m due beyond that. Offsetting this, it had CN¥10.1b in cash and CN¥2.77b in receivables that were due within 12 months. So it actually has CN¥3.87b more liquid assets than total liabilities.
This excess liquidity suggests that Haitian International Holdings is taking a careful approach to debt. Because it has plenty of assets, it is unlikely to have trouble with its lenders. Simply put, the fact that Haitian International Holdings has more cash than debt is arguably a good indication that it can manage its debt safely.
On the other hand, Haitian International Holdings's EBIT dived 10%, over the last year. If that rate of decline in earnings continues, the company could find itself in a tight spot. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Haitian International 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.
Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. Haitian International Holdings 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. During the last three years, Haitian International Holdings produced sturdy free cash flow equating to 71% of its EBIT, about what we'd expect. This free cash flow puts the company in a good position to pay down debt, when appropriate.
Summing Up
While it is always sensible to investigate a company's debt, in this case Haitian International Holdings has CN¥7.86b in net cash and a decent-looking balance sheet. And it impressed us with free cash flow of CN¥1.4b, being 71% of its EBIT. So is Haitian International Holdings's debt a risk? It doesn't seem so to us. 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 1 warning sign we've spotted with Haitian International Holdings .
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.
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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.
一些人说,作为投资者,考虑风险的最佳方式是波动性,而不是债务,但巴菲特曾说过一句名言:波动性远非风险的同义词。因此,当你评估一家公司的风险有多大时,聪明的投资者似乎知道债务--通常涉及破产--是一个非常重要的因素。与许多其他公司一样海天国际控股有限公司(HKG:1882)利用债务。但这笔债务对股东来说是一个担忧吗?
为什么债务会带来风险?
一般来说,只有当一家公司无法轻松偿还债务时,债务才会成为一个真正的问题,无论是通过筹集资金还是用自己的现金流。如果情况真的变得很糟糕,贷款人可以控制业务。然而,更常见(但代价仍然高昂)的情况是,一家公司必须以极低的价格发行股票,永久性地稀释股东的股份,只是为了支撑其资产负债表。当然,在企业中,债务可以是一个重要的工具,特别是资本密集型企业。当我们考虑一家公司的债务用途时,我们首先会把现金和债务放在一起看。
查看我们对海天国际控股的最新分析
海天国际控股的债务是什么?
你可以点击下图查看历史数据,但它显示,截至2022年6月,海地国际控股公司的债务为22.5亿加元,比一年前增加了13.4亿加元。但另一方面,它也有101亿元人民币的现金,导致78.6亿元人民币的净现金头寸。
联交所:1882债转股历史2022年9月5日
海天国际控股的资产负债表健康程度如何?
从最新的资产负债表可以看到,海天国际控股有85.1亿元人民币的负债在一年内到期,还有4.932亿元人民币的负债在一年内到期。作为抵消,它有101亿加元的现金和27.7亿加元的应收账款在12个月内到期。所以它实际上有38.7亿元人民币更多流动资产超过总负债。
这种过剩的流动性表明,海天国际控股对债务采取了谨慎的做法。由于它拥有充足的资产,它不太可能与其贷款人发生麻烦。简而言之,海地国际控股的现金多于债务,可以说是一个很好的迹象,表明它能够安全地管理债务。
另一方面,海天国际控股的息税前利润在过去一年里暴跌了10%。如果盈利下降的速度继续下去,该公司可能会发现自己陷入了困境。当你分析债务时,资产负债表显然是你关注的领域。但最终,该业务未来的盈利能力将决定海天国际控股能否随着时间的推移加强其资产负债表。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。
最后,企业需要自由现金流来偿还债务;会计利润只是不能削减这一点。海天国际控股的资产负债表上可能有净现金,但看看该业务将息税前收益(EBIT)转换为自由现金流的情况仍很有趣,因为这将影响其对债务的需求和管理债务的能力。在过去三年中,海天国际控股产生了相当于息税前利润71%的强劲自由现金流,这与我们预期的差不多。这种自由现金流使公司在适当的时候处于偿还债务的有利地位。
总结
虽然调查一家公司的债务总是明智的,但在这起案件中,海天国际控股拥有人民币78.6亿元的净现金和看起来不错的资产负债表。它给我们留下了深刻的印象,自由现金流为14亿元人民币,占其息税前利润的71%。那么,海天国际控股的债务是否存在风险?但在我们看来并非如此。毫无疑问,我们从资产负债表中了解到的债务最多。但归根结底,每家公司都可能包含存在于资产负债表之外的风险。为此,您应该意识到1个警告标志我们发现了海天国际控股公司。
如果你对一家增长迅速、资产负债表坚如磐石的公司更感兴趣,那么请立即查看我们的净现金成长型股票清单。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。