Stock Analysis

Analysts Expect ZhongAn Online P & C Insurance Co., Ltd. (HKG:6060) To Breakeven Soon

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We feel now is a pretty good time to analyse ZhongAn Online P & C Insurance Co., Ltd.'s (HKG:6060) business as it appears the company may be on the cusp of a considerable accomplishment. ZhongAn Online P & C Insurance Co., Ltd., an online insuretech company, provides internet insurance and information technology services in the People’s Republic of China. With the latest financial year loss of CN¥454m and a trailing-twelve-month loss of CN¥58m, the HK$97b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which ZhongAn Online P & C Insurance will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for ZhongAn Online P & C Insurance

Consensus from 17 of the Hong Kong Insurance analysts is that ZhongAn Online P & C Insurance is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of CN¥827m in 2021. 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 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 76% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

SEHK:6060 Earnings Per Share Growth February 23rd 2021

Underlying developments driving ZhongAn Online P & C Insurance's growth isn’t the focus of this broad overview, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 28% 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 ZhongAn Online P & C Insurance to cover in one brief article, but the key fundamentals for the company can all be found in one place – ZhongAn Online P & C Insurance's company page on Simply Wall St. We've also compiled a list of important factors you should further research:

  1. Valuation: What is ZhongAn Online P & C Insurance 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 ZhongAn Online P & C Insurance 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 ZhongAn Online P & C Insurance’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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Find out whether ZhongAn Online P & C Insurance is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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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