Analysts Expect Breakeven For Kuaishou Technology (HKG:1024) Before Long

By
Simply Wall St
Published
July 24, 2021
SEHK:1024
Source: Shutterstock

Kuaishou Technology (HKG:1024) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kuaishou Technology, an investment holding company, provides live streaming, online marketing, and other services. The HK$539b market-cap company posted a loss in its most recent financial year of CN¥117b and a latest trailing-twelve-month loss of CN¥144b leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Kuaishou Technology's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Kuaishou Technology

Kuaishou Technology is bordering on breakeven, according to the 22 Hong Kong Interactive Media and Services analysts. They expect the company to post a final loss in 2022, before turning a profit of CN¥11b in 2023. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 65%, 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:1024 Earnings Per Share Growth July 25th 2021

Given this is a high-level overview, we won’t go into details of Kuaishou Technology's upcoming projects, 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. Kuaishou Technology currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of 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 key fundamentals of Kuaishou Technology which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Kuaishou Technology, take a look at Kuaishou Technology's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:

  1. Valuation: What is Kuaishou 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 Kuaishou 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 Kuaishou 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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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.