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    HIGEN Motor (KOSDAQ:160190) Is Making Moderate Use Of Debt

    Simply Wall St·01/05/2026 23:08:28
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    Warren Buffett famously said, 'Volatility is far from synonymous with risk.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. As with many other companies HIGEN Motor Co., Ltd. (KOSDAQ:160190) makes use of debt. But is this debt a concern to shareholders?

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    What Risk Does Debt Bring?

    Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest 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 HIGEN Motor's Debt?

    The image below, which you can click on for greater detail, shows that HIGEN Motor had debt of ₩27.2b at the end of September 2025, a reduction from ₩29.3b over a year. On the flip side, it has ₩17.6b in cash leading to net debt of about ₩9.59b.

    debt-equity-history-analysis
    KOSDAQ:A160190 Debt to Equity History January 5th 2026

    How Healthy Is HIGEN Motor's Balance Sheet?

    The latest balance sheet data shows that HIGEN Motor had liabilities of ₩25.5b due within a year, and liabilities of ₩24.5b falling due after that. Offsetting this, it had ₩17.6b in cash and ₩11.1b in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by ₩21.4b.

    Having regard to HIGEN Motor's size, it seems that its liquid assets are well balanced with its total liabilities. So while it's hard to imagine that the ₩1.67t company is struggling for cash, we still think it's worth monitoring its balance sheet. Carrying virtually no net debt, HIGEN Motor has a very light debt load indeed. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine HIGEN Motor's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

    Check out our latest analysis for HIGEN Motor

    In the last year HIGEN Motor had a loss before interest and tax, and actually shrunk its revenue by 8.5%, to ₩70b. We would much prefer see growth.

    Caveat Emptor

    Importantly, HIGEN Motor had an earnings before interest and tax (EBIT) loss over the last year. To be specific the EBIT loss came in at ₩6.7b. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. So we think its balance sheet is a little strained, though not beyond repair. Another cause for caution is that is bled ₩15b in negative free cash flow over the last twelve months. So suffice it to say we do consider the stock to be risky. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. To that end, you should be aware of the 2 warning signs we've spotted with HIGEN Motor .

    If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.