OneConnect Financial Technology Co., Ltd. (HKG:6638) Could Be Less Than A Year Away From Profitability

OneConnect Financial Technology Co., Ltd. (HKG:6638) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. OneConnect Financial Technology Co., Ltd. On 31 December 2023, the HK$725m market-cap company posted a loss of CN¥363m for its most recent financial year. As path to profitability is the topic on OneConnect Financial Technology's 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.

See our latest analysis for OneConnect Financial Technology

According to the 3 industry analysts covering OneConnect Financial Technology, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of CN¥71m in 2024. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 60% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving OneConnect Financial Technology's growth isn’t the focus of this broad overview, but, take into account that by and large 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 The company has managed its capital prudently, with debt making up 10% 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:

This article is not intended to be a comprehensive analysis on OneConnect Financial Technology, so if you are interested in understanding the company at a deeper level, take a look at OneConnect Financial Technology's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Valuation: What is OneConnect Financial Technology 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 OneConnect Financial Technology 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 OneConnect Financial Technology’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.