MaxWin International Holdings (HKG:8513) Is Making Moderate Use Of Debt

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. Importantly, MaxWin International Holdings Limited (HKG:8513) does carry debt. But is this debt a concern to shareholders?

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

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. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. The first step when considering a company's debt levels is to consider its cash and debt together.

How Much Debt Does MaxWin International Holdings Carry?

You can click the graphic below for the historical numbers, but it shows that as of June 2025 MaxWin International Holdings had S$2.86m of debt, an increase on S$2.61m, over one year. However, it also had S$759.0k in cash, and so its net debt is S$2.10m.

A Look At MaxWin International Holdings' Liabilities

We can see from the most recent balance sheet that MaxWin International Holdings had liabilities of S$3.76m falling due within a year, and liabilities of S$2.65m due beyond that. On the other hand, it had cash of S$759.0k and S$4.17m worth of receivables due within a year. So its liabilities total S$1.49m more than the combination of its cash and short-term receivables.

Given MaxWin International Holdings has a market capitalization of S$16.1m, it's hard to believe these liabilities pose much threat. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse. When analysing debt levels, the balance sheet is the obvious place to start. But it is MaxWin International 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.

View our latest analysis for MaxWin International Holdings

In the last year MaxWin International Holdings wasn't profitable at an EBIT level, but managed to grow its revenue by 46%, to S$13m. With any luck the company will be able to grow its way to profitability.

Caveat Emptor

Despite the top line growth, MaxWin International Holdings still had an earnings before interest and tax (EBIT) loss over the last year. Indeed, it lost S$626k at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. Another cause for caution is that is bled S$1.1m in negative free cash flow over the last twelve months. So in short it's a really risky stock. 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. These risks can be hard to spot. Every company has them, and we've spotted 4 warning signs for MaxWin International Holdings (of which 2 are potentially serious!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.