YXT, YXT.COM GROUP HOLDING LIMITED

Will it survive?

• Can it pay its interest? -21.5×
  Does not cover its interest
  Operating income (CN¥141M) ÷ interest expense CN¥7M
  What this means

  A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.

• How heavy is the debt, net of cash? +CN¥85M
  Net cash
  Cash CN¥115M + ST investments CN¥20M − debt CN¥50M
  What this means

  Cash and short-term investments exceed every dollar of debt by CN¥85M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

• How long is cash tied up? -13d
  Negative, funded by others
  DSO 20 + DIO 0 − DPO 34 days
  What this means

  Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

• Return on invested capital -1156%
  Below average
  NOPAT (CN¥111M) ÷ invested capital CN¥10M (debt + equity − cash)
  Industry peers: median -11%
  What this means

  The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

• Owner-earnings margin -64%
  Consumes cash through the cycle
  4-yr median margin, range -109%–-43%; latest (CN¥147M) = operating cash (CN¥146M) − maintenance capex CN¥2M
  Industry peers: median -4%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -43% of revenue this year, a -64% median across 4 years.

• Are earnings backed by cash? (CN¥146M)
  Loss, and burning cash
  Net income (CN¥159M) · cash from operations (CN¥146M)
  What this means

  The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did not.

How is the cash used?

• Where do the earnings go? —
  No surplus to allocate
  What this means

  The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.

• Investing or harvesting? 0.25×
  Harvesting
  Capex CN¥2M ÷ depreciation CN¥6M
  What this means

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 2 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

• Adequate size —
  Revenue ≥ $2B (a dollar floor) · CN¥340M
  What this means

  Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.

• Strong liquidity Miss
  Current ratio ≥ 2× · 0.49×
  What this means

  Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.

• Conservative debt Miss
  Debt ≤ working capital · CN¥50M vs (CN¥183M) WC
  What this means

  Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.

• Moderate price —
  P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
  What this means

  Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are CN¥-0.90/share (latest year CN¥-0.89), the averaged base the calculator's gate runs on, and book value is CN¥0.42/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2022–2025

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 0 of 4
  What this means

  Lost money in 4 year(s), look at what happened there before trusting the average.

• Operating margin −111% → −49% (2-yr avg ends)
  What this means

  Through the cycle the operating margin widened — about −111% early to −49% lately, median −77% — pricing power intact or improving.

• Reinvestment, incremental ROIC returns capital
  What this means

  The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.

• Worst year 2022 · −144.2% op. margin
  What this means

  Operations went underwater in 2022, understand why before trusting the good years.