All You Need To Know About CK Asset Holdings Limited’s (HKG:1113) Financial Health
Investors looking for stocks with high market liquidity and little debt on the balance sheet should consider CK Asset Holdings Limited (HKG:1113). With a market valuation of HK$217b, 1113 is a safe haven in times of market uncertainty due to its strong balance sheet. These firms won’t be left high and dry if liquidity dries up, and they will be relatively unaffected by rises in interest rates. Assessing the most recent data for 1113, I will take you through the key ratios to measure financial health, in particular, its solvency and liquidity.
View our latest analysis for CK Asset Holdings
How much cash does 1113 generate through its operations?
Over the past year, 1113 has reduced its debt from HK$85b to HK$61b – this includes long-term debt. With this debt repayment, 1113 currently has HK$55b remaining in cash and short-term investments , ready to deploy into the business. Moreover, 1113 has produced HK$38b in operating cash flow over the same time period, leading to an operating cash to total debt ratio of 62%, meaning that 1113’s operating cash is sufficient to cover its debt. This ratio can also be a sign of operational efficiency as an alternative to return on assets. In 1113’s case, it is able to generate 0.62x cash from its debt capital.
Does 1113’s liquid assets cover its short-term commitments?
Looking at 1113’s HK$58b in current liabilities, the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 3.58x. However, a ratio above 3x may be considered excessive by some investors, yet this is not usually a major negative for a company.
Can 1113 service its debt comfortably?
With debt at 19% of equity, 1113 may be thought of as appropriately levered. 1113 is not taking on too much debt commitment, which can be restrictive and risky for equity-holders.
Next Steps:
1113 has demonstrated its ability to generate sufficient levels of cash flow, while its debt hovers at a safe level. In addition to this, the company exhibits proper management of current assets and upcoming liabilities. Keep in mind I haven’t considered other factors such as how 1113 has been performing in the past. You should continue to research CK Asset Holdings to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 1113’s future growth? Take a look at our free research report of analyst consensus for 1113’s outlook.
Valuation: What is 1113 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 1113 is currently mispriced by the market.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
