Analysts Expect Dmall Inc. (HKG:2586) To Breakeven Soon

Dmall Inc. (HKG:2586) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Dmall Inc., an investment holding company, provides retail digitalization solutions to retailers in China, Hong Kong, Macau, the Philippines, Malaysia, Singapore, Poland, and internationally. On 31 December 2024, the HK$10.0b market-cap company posted a loss of CN¥2.4b for its most recent financial year. As path to profitability is the topic on Dmall's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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According to the 3 industry analysts covering Dmall, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of CN¥103m in 2025. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 109%, 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.

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

See our latest analysis for Dmall

One thing we would like to bring into light with Dmall is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Dmall's case is 83%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Dmall which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Dmall, take a look at Dmall's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

1. Historical Track Record: What has Dmall's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Dmall'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.