David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' 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 Viva China Holdings Limited (HKG:8032) makes use of debt. But the more important question is: how much risk is that debt creating?
What Risk Does Debt Bring?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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, plenty of companies use debt to fund growth, without any negative consequences. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
Check out our latest analysis for Viva China Holdings
How Much Debt Does Viva China Holdings Carry?
You can click the graphic below for the historical numbers, but it shows that as of June 2022 Viva China Holdings had HK$17.1m of debt, an increase on none, over one year. However, it does have HK$2.95b in cash offsetting this, leading to net cash of HK$2.93b.
SEHK:8032 Debt to Equity History September 22nd 2022
How Strong Is Viva China Holdings' Balance Sheet?
Zooming in on the latest balance sheet data, we can see that Viva China Holdings had liabilities of HK$897.6m due within 12 months and liabilities of HK$422.5m due beyond that. Offsetting these obligations, it had cash of HK$2.95b as well as receivables valued at HK$166.7m due within 12 months. So it actually has HK$1.79b more liquid assets than total liabilities.
This excess liquidity suggests that Viva China Holdings is taking a careful approach to debt. Given it has easily adequate short term liquidity, we don't think it will have any issues with its lenders. Succinctly put, Viva China Holdings boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But it is Viva China Holdings's earnings that will influence how the balance sheet holds up in the future. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.
Over 12 months, Viva China Holdings reported revenue of HK$1.4b, which is a gain of 5.6%, although it did not report any earnings before interest and tax. We usually like to see faster growth from unprofitable companies, but each to their own.
So How Risky Is Viva China Holdings?
While Viva China Holdings lost money on an earnings before interest and tax (EBIT) level, it actually booked a paper profit of HK$1.2b. So taking that on face value, and considering the cash, we don't think its very risky in the near term. We'll feel more comfortable with the stock once EBIT is positive, given the lacklustre revenue growth. 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. To that end, you should learn about the 3 warning signs we've spotted with Viva China Holdings (including 1 which shouldn't be ignored) .
At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.
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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.
大卫·伊本说得很好,波动性不是我们关心的风险,我们关心的是避免资本的永久性损失。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非凡中国控股有限公司(HKG:8032)利用债务。但更重要的问题是:这笔债务造成了多大的风险?
债务会带来什么风险?
债务帮助企业,直到企业难以偿还债务,无论是用新资本还是用自由现金流。最终,如果公司不能履行其偿还债务的法定义务,股东可能会一无所有地离开。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,许多公司利用债务为增长提供资金,没有任何负面后果。当考虑一家企业使用了多少债务时,首先要做的是把现金和债务放在一起看。
查看我们对Viva China Holdings的最新分析
非凡中国控股背负着多少债务?
你可以点击下图查看历史数字,但它显示,截至2022年6月,非凡中国控股的债务为1710万港元,较一年前没有债务有所增加。然而,该公司确实拥有29.5亿港元的现金,抵消了这一影响,导致净现金达到29.3亿港元。
联交所:8032债转股历史2022年9月22日
非凡中国控股的资产负债表有多强劲?
放大最新的资产负债表数据,我们可以看到,非凡中国控股有8.976亿港元的负债在12个月内到期,而在此之后还有4.225亿港元的负债到期。作为对这些债务的抵消,该公司有29.5亿港元的现金以及价值1.667亿港元的应收账款在12个月内到期。因此,它实际上有17.9亿港元更多流动资产超过总负债。
这种过剩的流动性表明,非凡中国控股对债务采取了谨慎的态度。鉴于它拥有充足的短期流动性,我们认为它与贷款人之间不会有任何问题。简而言之,非凡中国控股拥有净现金,因此可以说它没有沉重的债务负担!当你分析债务时,资产负债表显然是你关注的领域。但Viva China Holdings的盈利将影响未来资产负债表的表现。因此,如果你热衷于了解更多关于它的收益,可能值得查看一下它的长期收益趋势图。
在过去12个月中,非凡中国控股公布的收入为14亿港元,增长5.6%,尽管该公司没有公布任何息税前收益。我们通常喜欢看到不盈利的公司实现更快的增长,但每个公司都有自己的特点。
那么,非凡中国控股的风险有多大呢?
虽然非凡中国控股在息税前利润(EBIT)水平上出现亏损,但它实际上录得了12亿港元的账面利润。因此,从表面上看,考虑到现金,我们认为短期内风险不是很大。考虑到收入增长乏力,一旦息税前利润为正,我们将对该股感到更放心。当你分析债务时,资产负债表显然是你关注的领域。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,您应该了解3个警示标志我们已经发现了Viva China Holdings(包括1家不应被忽视的公司)。
归根结底,关注那些没有净债务的公司往往更好。你可以访问我们的这类公司的特别名单(都有利润增长的记录)。这是免费的。
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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。