Market Sentiment Around Loss-Making Contec.,Co.Ltd (KOSDAQ:451760)

Contec.,Co.Ltd (KOSDAQ:451760) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Contec.,Co.Ltd provides space ground station, and satellite image processing and application services in South Korea and internationally. The ₩176b market-cap company’s loss lessened since it announced a ₩65b loss in the full financial year, compared to the latest trailing-twelve-month loss of ₩64b, as it approaches breakeven. As path to profitability is the topic on Contec.Co.Ltd'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.

Check out our latest analysis for Contec.Co.Ltd

Contec.Co.Ltd is bordering on breakeven, according to the 2 South Korean Aerospace & Defense analysts. They expect the company to post a final loss in 2024, before turning a profit of ₩6.0b in 2025. Therefore, the company is expected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 113%, which is extremely buoyant. 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 Contec.Co.Ltd's upcoming projects, though, take into account that generally 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 0.5% 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:

There are too many aspects of Contec.Co.Ltd to cover in one brief article, but the key fundamentals for the company can all be found in one place – Contec.Co.Ltd's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

1. Historical Track Record: What has Contec.Co.Ltd'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 Contec.Co.Ltd'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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com