Analysts Expect JD Logistics, Inc. (HKG:2618) To Breakeven Soon

We feel now is a pretty good time to analyse JD Logistics, Inc.'s (HKG:2618) business as it appears the company may be on the cusp of a considerable accomplishment. JD Logistics, Inc., an investment holding company, provides integrated supply chain solutions and logistics services in the People’s Republic of China. With the latest financial year loss of CN¥1.4b and a trailing-twelve-month loss of CN¥70m, the HK$56b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on JD Logistics' 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 JD Logistics

Consensus from 19 of the Hong Kong Logistics analysts is that JD Logistics is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of CN¥266m in 2023. Therefore, the company is expected to breakeven roughly 12 months 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 55% 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 JD Logistics' growth isn’t the focus of this broad overview, though, 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 would like to bring into light with JD Logistics is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in JD Logistics' case is 46%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is JD Logistics 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 JD Logistics 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 JD Logistics’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.