Breakeven On The Horizon For ASR Microelectronics Co., Ltd. (SHSE:688220)

With the business potentially at an important milestone, we thought we'd take a closer look at ASR Microelectronics Co., Ltd.'s (SHSE:688220) future prospects. ASR Microelectronics Co., Ltd., a platform chip company, manufactures and sells wireless communication chips and semiconductor products in China. The CN¥39b market-cap company announced a latest loss of CN¥687m on 31 December 2024 for its most recent financial year result. As path to profitability is the topic on ASR Microelectronics' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Consensus from 4 of the Chinese Semiconductor analysts is that ASR Microelectronics is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of CN¥233m in 2026. Therefore, the company is expected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 111%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for ASR Microelectronics given that this is a high-level summary, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Check out our latest analysis for ASR Microelectronics

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 2.5% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on ASR Microelectronics, so if you are interested in understanding the company at a deeper level, take a look at ASR Microelectronics' company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Historical Track Record: What has ASR Microelectronics' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ASR Microelectronics' board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.