A conservative capital structure is evidenced by a minimal 8.19% debt-to-equity ratio, providing a stable foundation for the current three-unit operational model.
| Metric | Aug'24 | Aug'23 |
|---|
| Total Current Assets | 3.14M | 275.55K |
| Cash & Short-Term Investments | 2.94M | 184.74K |
| Cash Only | 2.94M | 184.74K |
| Short-Term Investments | 0 | 0 |
| Accounts Receivable | 43.29K | 34.62K |
| Days Sales Outstanding | 1.9 | 1.87 |
| Inventory | 38.13K | 34.92K |
| Days Inventory Outstanding | 2.31 | 2.13 |
| Other Current Assets | 0 | 0 |
| Total Non-Current Assets | 3.84M | 3.77M |
| Property, Plant & Equipment | 3.08M | 2.89M |
| Fixed Asset Turnover | 2.69x | 2.33x |
| Goodwill | 0 | 0 |
| Intangible Assets | 0 | 0 |
| Long-Term Investments | 0 | 0 |
| Other Non-Current Assets | 520.04K | 624.5K |
| Total Assets | 6.97M | 4.04M |
| Asset Turnover | 1.19x | 1.67x |
| Asset Growth % | 72.51% | - |
| Total Current Liabilities | 4.05M | 2.75M |
| Accounts Payable | 266.66K | 220.94K |
| Days Payables Outstanding | 16.13 | 13.48 |
| Short-Term Debt | 2M | 542.96K |
| Deferred Revenue (Current) | 0 | 0 |
| Other Current Liabilities | 133.66K | 103.3K |
| Current Ratio | 0.77x | 0.10x |
| Quick Ratio | 0.76x | 0.09x |
| Cash Conversion Cycle | -11.92 | -9.47 |
| Total Non-Current Liabilities | 2.32M | 2.75M |
| Long-Term Debt | 1.48M | 1.69M |
| Capital Lease Obligations | 609.14K | 800.89K |
| Deferred Tax Liabilities | 228.69K | 264.39K |
| Other Non-Current Liabilities | 0 | 0 |
| Total Liabilities | 6.37M | 5.5M |
| Total Debt | 4.93M | 3.9M |
| Net Debt | 1.99M | 3.71M |
| Debt / Equity | 8.19x | - |
| Debt / EBITDA | 1.83x | 17.48x |
| Net Debt / EBITDA | 0.74x | 16.66x |
| Interest Coverage | 7.20x | -5.94x |
| Total Equity | 601.97K | -1.46M |
| Equity Growth % | 141.15% | - |
| Book Value per Share | - | -0.08 |
| Total Shareholders' Equity | 601.97K | -1.46M |
| Common Stock | 750K | 0 |
| Retained Earnings | -145.09K | -1.46M |
| Treasury Stock | 0 | 0 |
| Accumulated OCI | -2.94K | 1.91K |
| Minority Interest | 0 | 0 |
Geographic concentration in HK
Based on reported financial figures, HCHL maintains a conservative balance sheet trajectory characterized by minimal leverage and a $2.9M cash position, which suggests a disciplined approach to navigating the volatile Hong Kong restaurant market while supporting its 22.81% year-over-year revenue growth through internal capital allocation.
The company's ability to maintain a clean balance sheet while expanding its footprint indicates a focus on operational self-sufficiency rather than debt-fueled growth. This trajectory suggests that management prioritizes financial stability, which may provide a necessary buffer against the inherent risks of the highly competitive and rent-sensitive Hong Kong dining sector.
As indicated by the company's financial snapshot, HCHL operates with a low debt-to-equity ratio of 8.19%, which implies that the business is not reliant on external financing to sustain its current three-unit operational model or to manage its daily working capital requirements.
This low leverage profile is a significant advantage in the current interest rate environment, as it minimizes interest expense and protects the company's 15.91% net margin from debt-servicing pressure. Investors should monitor whether management maintains this conservative stance if they decide to pursue further expansion, as increased borrowing could alter the current risk-reward profile.
According to the provided financial data, the company holds $2.9M in cash, providing a substantial liquidity buffer that appears sufficient to cover short-term operational obligations and potential fluctuations in raw material costs for its Thai-Japanese fusion AYCE concept.
The presence of this cash reserve suggests that HCHL is well-positioned to withstand short-term shocks to discretionary spending or unexpected increases in labor and utility costs. However, without granular data on current liabilities, the exact duration of this liquidity runway remains an analytical inference rather than a confirmed metric.
Based on the company's operational structure, the reliance on IFRS 16 lease accounting may mask the true economic impact of rent obligations, as the reported balance sheet figures may not fully capture the cash-outflow reality of operating three physical locations in high-rent Hong Kong.
The potential for Right-of-Use assets to inflate the balance sheet warrants further investigation, as these non-cash accounting entries can obscure the actual rent-to-revenue ratio. Investors should be cautious that the headline balance sheet strength may be partially dependent on accounting conventions that do not reflect the underlying cash-based lease commitments.
Quick answers to the most common questions about buying HCHL stock.
As of 2024, Happy City Holdings Limited Class A Ordinary shares (HCHL) had total assets of $7.0M including $3.1M in current assets.
Happy City Holdings Limited Class A Ordinary shares (HCHL) carries total debt of $4.9M, offset by $2.9M in cash and short-term investments. Comparing total debt to cash helps evaluate the company's debt burden and net leverage.
Happy City Holdings Limited Class A Ordinary shares (HCHL) has total shareholders' equity (book value) of $0.6M. Book value represents the net worth of the company belonging to common stock holders.
Happy City Holdings Limited Class A Ordinary shares (HCHL) reported a current ratio of 0.77x. A current ratio above 1.0x indicates that the company has more current assets than current liabilities, suggesting sufficient short-term liquidity.