Breakeven Is Near for Kuaishou Technology (HKG:1024)

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 mainly in the People’s Republic of China. The HK$280b market-cap company posted a loss in its most recent financial year of CN¥14b and a latest trailing-twelve-month loss of CN¥3.7b shrinking the 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. 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 Kuaishou Technology

Kuaishou Technology is bordering on breakeven, according to the 34 Hong Kong Interactive Media and Services analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of CN¥3.0b in 2023. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 64% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Kuaishou Technology's growth isn’t the focus of this broad overview, but, bear in mind 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 rare for a 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 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 compiled a list of essential factors 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.