Loss-Making ASR Microelectronics Co., Ltd. (SHSE:688220) Expected To Breakeven In The Medium-Term

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, engages in the research, design, development, and sells wireless communication chips in China and internationally. With the latest financial year loss of CN¥506m and a trailing-twelve-month loss of CN¥492m, the CN¥16b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is ASR Microelectronics' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for ASR Microelectronics

ASR Microelectronics is bordering on breakeven, according to the 3 Chinese Semiconductor analysts. They expect the company to post a final loss in 2025, before turning a profit of CN¥233m in 2026. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 82% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving ASR Microelectronics' growth isn’t the focus of this broad overview, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 1.7% 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:

There are too many aspects of ASR Microelectronics to cover in one brief article, but the key fundamentals for the company can all be found in one place – ASR Microelectronics' company page on Simply Wall St. We've also put together a list of essential aspects you should further research:

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.