Breakeven On The Horizon For REPT BATTERO Energy Co., Ltd. (HKG:666)

With the business potentially at an important milestone, we thought we'd take a closer look at REPT BATTERO Energy Co., Ltd.'s (HKG:666) future prospects. REPT BATTERO Energy Co., Ltd. engages in the design, research and development, production, and sale of lithium-ion battery products in China and internationally. The HK$33b market-cap company announced a latest loss of CN¥1.5b on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is REPT BATTERO Energy's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for REPT BATTERO Energy

According to the 4 industry analysts covering REPT BATTERO Energy, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of CN¥710m in 2026. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 98% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for REPT BATTERO Energy given that this is a high-level summary, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. REPT BATTERO Energy currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in REPT BATTERO Energy's case is 83%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is REPT BATTERO Energy worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether REPT BATTERO Energy is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on REPT BATTERO Energy’s 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com