Does CJ Century Logistics Holdings Berhad (KLSE:CJCEN) Have A Healthy Balance Sheet?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, '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. We can see that CJ Century Logistics Holdings Berhad (KLSE:CJCEN) does use debt in its business. But is this debt a concern to shareholders?

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

When Is Debt A Problem?

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 common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. 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.

How Much Debt Does CJ Century Logistics Holdings Berhad Carry?

As you can see below, CJ Century Logistics Holdings Berhad had RM110.2m of debt at September 2025, down from RM116.5m a year prior. But it also has RM113.0m in cash to offset that, meaning it has RM2.86m net cash.

A Look At CJ Century Logistics Holdings Berhad's Liabilities

According to the last reported balance sheet, CJ Century Logistics Holdings Berhad had liabilities of RM151.0m due within 12 months, and liabilities of RM71.1m due beyond 12 months. Offsetting these obligations, it had cash of RM113.0m as well as receivables valued at RM133.7m due within 12 months. So it actually has RM24.6m more liquid assets than total liabilities.

It's good to see that CJ Century Logistics Holdings Berhad has plenty of liquidity on its balance sheet, suggesting conservative management of liabilities. Given it has easily adequate short term liquidity, we don't think it will have any issues with its lenders. Simply put, the fact that CJ Century Logistics Holdings Berhad has more cash than debt is arguably a good indication that it can manage its debt safely. There's no doubt that we learn most about debt from the balance sheet. But it is CJ Century Logistics Holdings Berhad's earnings that will influence how the balance sheet holds up in the future. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

Check out our latest analysis for CJ Century Logistics Holdings Berhad

Over 12 months, CJ Century Logistics Holdings Berhad made a loss at the EBIT level, and saw its revenue drop to RM622m, which is a fall of 12%. We would much prefer see growth.

So How Risky Is CJ Century Logistics Holdings Berhad?

While CJ Century Logistics Holdings Berhad lost money on an earnings before interest and tax (EBIT) level, it actually generated positive free cash flow RM74m. So taking that on face value, and considering the net cash situation, we don't think that the stock is too risky in the near term. With mediocre revenue growth in the last year, we're don't find the investment opportunity particularly compelling. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. For instance, we've identified 3 warning signs for CJ Century Logistics Holdings Berhad (2 don't sit too well with us) you should be aware of.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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.