We Might See A Profit From Hangzhou SF Intra-city Industrial Co., Ltd. (HKG:9699) Soon

Hangzhou SF Intra-city Industrial Co., Ltd. (HKG:9699) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Hangzhou SF Intra-city Industrial Co., Ltd., an investment holding company, provides intra-city on-demand delivery services in the People’s Republic of China. With the latest financial year loss of CN¥287m and a trailing-twelve-month loss of CN¥128m, the HK$8.8b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Hangzhou SF Intra-city Industrial'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.

Check out our latest analysis for Hangzhou SF Intra-city Industrial

Hangzhou SF Intra-city Industrial is bordering on breakeven, according to the 7 Hong Kong Logistics analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of CN¥23m in 2023. So, the company is predicted to breakeven approximately 12 months 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 110%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Hangzhou SF Intra-city Industrial given that this is a high-level summary, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Hangzhou SF Intra-city Industrial has no debt on its balance sheet, which is quite unusual for a cash-burning 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 Hangzhou SF Intra-city Industrial, so if you are interested in understanding the company at a deeper level, take a look at Hangzhou SF Intra-city Industrial's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

1. Valuation: What is Hangzhou SF Intra-city Industrial 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 Hangzhou SF Intra-city Industrial 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 Hangzhou SF Intra-city Industrial’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.