Flat Glass Group Co., Ltd. (HKG:6865) saw a sharp decline of 5.04% in its stock price during Wednesday's intraday trading session, as investors reacted to concerns over the company's debt levels and potential financial risks.
According to a recent analysis, Flat Glass Group has accumulated substantial debt, with its net debt standing at 1.8 times its earnings before interest, tax, depreciation, and amortization (EBITDA). While this level of debt may not immediately alarm investors, the company's interest coverage ratio of only 6.6 times its earnings before interest and tax (EBIT) raises questions about its ability to service its debt obligations comfortably.
Furthermore, the analysis highlighted Flat Glass Group's declining earnings and negative free cash flow over the past year, which could exacerbate the company's debt management challenges. These financial indicators suggest potential risks and have likely contributed to the stock's plummet.