Is Timeless Resources Holdings (HKG:8028) A Risky Investment?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. Importantly, Timeless Resources Holdings Limited (HKG:8028) does carry debt. But the real question is whether this debt is making the company risky.

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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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is Timeless Resources Holdings's Net Debt?

The image below, which you can click on for greater detail, shows that at September 2025 Timeless Resources Holdings had debt of HK$30.0m, up from HK$3.30m in one year. But on the other hand it also has HK$92.6m in cash, leading to a HK$62.6m net cash position.

How Strong Is Timeless Resources Holdings' Balance Sheet?

The latest balance sheet data shows that Timeless Resources Holdings had liabilities of HK$94.2m due within a year, and liabilities of HK$4.48m falling due after that. On the other hand, it had cash of HK$92.6m and HK$29.3m worth of receivables due within a year. So it can boast HK$23.1m more liquid assets than total liabilities.

This surplus suggests that Timeless Resources Holdings is using debt in a way that is appears to be both safe and conservative. Given it has easily adequate short term liquidity, we don't think it will have any issues with its lenders. Succinctly put, Timeless Resources Holdings boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But you can't view debt in total isolation; since Timeless Resources Holdings will need earnings to service that debt. 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.

See our latest analysis for Timeless Resources Holdings

Over 12 months, Timeless Resources Holdings reported revenue of HK$185m, which is a gain of 90%, although it did not report any earnings before interest and tax. Shareholders probably have their fingers crossed that it can grow its way to profits.

So How Risky Is Timeless Resources Holdings?

Statistically speaking companies that lose money are riskier than those that make money. And the fact is that over the last twelve months Timeless Resources Holdings lost money at the earnings before interest and tax (EBIT) line. And over the same period it saw negative free cash outflow of HK$26m and booked a HK$12m accounting loss. While this does make the company a bit risky, it's important to remember it has net cash of HK$62.6m. That kitty means the company can keep spending for growth for at least two years, at current rates. Timeless Resources Holdings's revenue growth shone bright over the last year, so it may well be in a position to turn a profit in due course. Pre-profit companies are often risky, but they can also offer great rewards. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. Case in point: We've spotted 4 warning signs for Timeless Resources Holdings you should be aware of, and 3 of them don't sit too well with us.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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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.