Innovent Biologics, Inc. (HKG:1801): When Will It Breakeven?

Innovent Biologics, Inc. (HKG:1801) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Innovent Biologics, Inc., a biopharmaceutical company, develops and commercializes monoclonal antibodies and other drug assets in the fields of oncology, ophthalmology, autoimmune, and cardiovascular and metabolic diseases in the People’s Republic of China. On 31 December 2023, the HK$59b market-cap company posted a loss of CN¥1.0b for its most recent financial year. As path to profitability is the topic on Innovent Biologics' 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.

Check out our latest analysis for Innovent Biologics

Innovent Biologics is bordering on breakeven, according to the 26 Hong Kong Biotechs analysts. They expect the company to post a final loss in 2024, before turning a profit of CN¥54m in 2025. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 51% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Innovent Biologics' upcoming projects, however, keep in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that 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 Innovent Biologics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Innovent Biologics' company page on Simply Wall St. We've also compiled a list of essential factors you should look at:

1. Valuation: What is Innovent Biologics 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 Innovent Biologics 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 Innovent Biologics’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.