Hong Kong Television Network Limited (HKG:1137) Is About To Turn The Corner

Hong Kong Television Network Limited (HKG:1137) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Hong Kong Television Network Limited, together with its subsidiaries, engages in the multimedia business in Hong Kong. The HK$11b market-cap company’s loss lessened since it announced a HK$290m loss in the full financial year, compared to the latest trailing-twelve-month loss of HK$25m, as it approaches breakeven. The most pressing concern for investors is Hong Kong Television Network's path to profitability – when will it breakeven? 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 Hong Kong Television Network

Consensus from 4 of the Hong Kong Online Retail analysts is that Hong Kong Television Network is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of HK$352m in 2021. Therefore, the company is expected to breakeven roughly a year 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 60% 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 Hong Kong Television Network's growth isn’t the focus of this broad overview, however, take into account that typically 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 Hong Kong Television Network has no debt on its balance sheet, which is quite unusual for a cash-burning 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 too many aspects of Hong Kong Television Network to cover in one brief article, but the key fundamentals for the company can all be found in one place – Hong Kong Television Network's company page on Simply Wall St. We've also put together a list of key factors you should further research:

1. Valuation: What is Hong Kong Television Network 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 Hong Kong Television Network 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 Hong Kong Television Network’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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