Breakeven Is Near for MFM KOREA Co., Ltd. (KOSDAQ:323230)

We feel now is a pretty good time to analyse MFM KOREA Co., Ltd.'s (KOSDAQ:323230) business as it appears the company may be on the cusp of a considerable accomplishment. MFM KOREA Co., Ltd. develops, manufactures, and exports garments worldwide. On 31 December 2023, the ₩27b market-cap company posted a loss of ₩22b for its most recent financial year. Many investors are wondering about the rate at which MFM KOREA will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for MFM KOREA

MFM KOREA is bordering on breakeven, according to some South Korean Luxury analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of ₩1.6b in 2024. 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 140%, 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 MFM KOREA's growth isn’t the focus of this broad overview, but, bear in mind 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 would like to bring into light with MFM KOREA is its debt-to-equity ratio of 181%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has MFM KOREA'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 MFM KOREA'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.