Loss-Making Baiwang Co., Ltd. (HKG:6657) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Baiwang Co., Ltd.'s (HKG:6657) future prospects. Baiwang Co., Ltd. provides enterprise digitalization solutions through the Baiwang Cloud platform in China. The HK$3.8b market-cap company announced a latest loss of CN¥501m on 31 December 2024 for its most recent financial year result. Many investors are wondering about the rate at which Baiwang 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.

Baiwang is bordering on breakeven, according to some Hong Kong IT analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of CN¥52m in 2026. Therefore, the company is expected 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 113% year-on-year, on average, 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.

Given this is a high-level overview, we won’t go into details of Baiwang's upcoming projects, though, 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.

See our latest analysis for Baiwang

Before we wrap up, there’s one aspect worth mentioning. Baiwang currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Baiwang'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 Baiwang'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.