Ping An Healthcare and Technology Company Limited's (HKG:1833): Ping An Healthcare and Technology Company Limited operates an Internet healthcare platform in the People's Republic of China. The HK$81b market-cap company announced a latest loss of -CN¥733.9m on 31 December 2019 for its most recent financial year result. Many investors are wondering the rate at which 1833 will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for 1833’s growth and when analysts expect the company to become profitable.
Consensus from the 5 Healthcare Services analysts is 1833 is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of CN¥299m in 2021. 1833 is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which 1833 must grow year-on-year. It turns out an average annual growth rate of 91% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of 1833’s upcoming projects, however, keep in mind that typically healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I’d like to point out is that 1833 has no debt on its balance sheet, which is quite unusual for a cash-burning healthcare tech company, which usually has a high level of debt relative to its equity. This means that 1833 has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
There are too many aspects of 1833 to cover in one brief article, but the key fundamentals for the company can all be found in one place – 1833’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should look at:
- Valuation: What is 1833 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 1833 is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ping An Healthcare and Technology’s board and the CEO’s back ground.
- 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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