Analysts Expect Breakeven For Weimob Inc. (HKG:2013) Before Long

Weimob Inc. (HKG:2013) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Weimob Inc., an investment holding company, provides digital commerce and media services in the People’s Republic of China. The HK$5.4b market-cap company posted a loss in its most recent financial year of CN¥1.8b and a latest trailing-twelve-month loss of CN¥1.7b shrinking the gap between loss and breakeven. As path to profitability is the topic on Weimob's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Weimob

According to the 21 industry analysts covering Weimob, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of CN¥183m in 2025. So, the company is predicted to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 109% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Weimob's growth isn’t the focus of this broad overview, but, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Weimob is its debt-to-equity ratio of 101%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Weimob to cover in one brief article, but the key fundamentals for the company can all be found in one place – Weimob's company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Valuation: What is Weimob 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 Weimob 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 Weimob’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.