Ping An Healthcare and Technology Company Limited (HKG:1833): Is Breakeven Near?

By
Simply Wall St
Published
October 20, 2020
SEHK:1833

With the business potentially at an important milestone, we thought we'd take a closer look at Ping An Healthcare and Technology Company Limited's (HKG:1833) future prospects. Ping An Healthcare and Technology Company Limited operates an Internet healthcare platform in the People's Republic of China. The HK$114b market-cap company posted a loss in its most recent financial year of CN¥734m and a latest trailing-twelve-month loss of CN¥675m shrinking the gap between loss and breakeven. As path to profitability is the topic on Ping An Healthcare and Technology's 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.

View our latest analysis for Ping An Healthcare and Technology

Ping An Healthcare and Technology is bordering on breakeven, according to the 15 Hong Kong Healthcare Services analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of CN¥436m in 2022. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% 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.

earnings-per-share-growth
SEHK:1833 Earnings Per Share Growth October 20th 2020

We're not going to go through company-specific developments for Ping An Healthcare and Technology given that this is a high-level summary, though, take into account that typically a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. Ping An Healthcare and Technology currently has no debt on its balance sheet, which is quite unusual for a cash-burning healthcare tech company, which typically has high debt relative to its equity. This means that the company 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.

Next Steps:

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

  1. Valuation: What is Ping An Healthcare and Technology 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 Ping An Healthcare and Technology 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 Ping An Healthcare and Technology’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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