Ascentage Pharma Group International (HKG:6855) Is Expected To Breakeven In The Near Future

Ascentage Pharma Group International (HKG:6855) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ascentage Pharma Group International, a clinical-stage biotechnology company, develops therapies for cancers, chronic hepatitis B virus (HBV), and age-related diseases in Mainland China. The HK$27b market-cap company announced a latest loss of CN¥405m on 31 December 2024 for its most recent financial year result. Many investors are wondering about the rate at which Ascentage Pharma Group International will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Ascentage Pharma Group International is bordering on breakeven, according to the 7 Hong Kong Biotechs analysts. They expect the company to post a final loss in 2025, before turning a profit of CN¥734m in 2026. The company is therefore projected 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 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 63% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Ascentage Pharma Group International given that this is a high-level summary, but, take into account that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Check out our latest analysis for Ascentage Pharma Group International

Before we wrap up, there’s one issue worth mentioning. Ascentage Pharma Group International currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Ascentage Pharma Group International, so if you are interested in understanding the company at a deeper level, take a look at Ascentage Pharma Group International's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Valuation: What is Ascentage Pharma Group International 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 Ascentage Pharma Group International 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 Ascentage Pharma Group International’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.