Kuaishou Technology (HKG:1024): When Will It Breakeven?

We feel now is a pretty good time to analyse Kuaishou Technology's (HKG:1024) business as it appears the company may be on the cusp of a considerable accomplishment. Kuaishou Technology, an investment holding company, provides live streaming, online marketing, and other services mainly in the People’s Republic of China. With the latest financial year loss of CN¥78b and a trailing-twelve-month loss of CN¥18b, the HK$247b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Kuaishou Technology's path to profitability – when will it 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 Kuaishou Technology

Consensus from 37 of the Hong Kong Interactive Media and Services analysts is that Kuaishou Technology is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of CN¥2.3b in 2024. So, the company is predicted to breakeven just over a year from now. 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 81%, 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.

We're not going to go through company-specific developments for Kuaishou Technology given that this is a high-level summary, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Kuaishou Technology has no debt on its balance sheet, which is quite unusual for a cash-burning 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 too many aspects of Kuaishou Technology to cover in one brief article, but the key fundamentals for the company can all be found in one place – Kuaishou Technology's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

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.