Renrui Human Resources Technology Holdings Limited (HKG:6919) On The Verge Of Breaking Even

Renrui Human Resources Technology Holdings Limited (HKG:6919) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Renrui Human Resources Technology Holdings Limited, an investment holding company, provides human resource solutions in China. With the latest financial year loss of CN¥780m and a trailing-twelve-month loss of CN¥498m, the HK$4.1b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Renrui Human Resources Technology Holdings will turn a profit, with the big question being “when will the company 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 Renrui Human Resources Technology Holdings

According to the 5 industry analysts covering Renrui Human Resources Technology Holdings, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of CN¥156m in 2020. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 38% year-on-year, on average, which is extremely buoyant. 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 Renrui Human Resources Technology Holdings given that this is a high-level summary, though, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Renrui Human Resources Technology Holdings has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Renrui Human Resources Technology Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Renrui Human Resources Technology Holdings' company page on Simply Wall St. We've also compiled a list of important aspects you should further examine:

1. Valuation: What is Renrui Human Resources Technology Holdings 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 Renrui Human Resources Technology Holdings 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 Renrui Human Resources Technology Holdings’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.

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This article by Simply Wall St is general in nature. 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.
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