FNC ENTERTAINMENT Co., Ltd. (KOSDAQ:173940) Is Expected To Breakeven In The Near Future

We feel now is a pretty good time to analyse FNC ENTERTAINMENT Co., Ltd.'s (KOSDAQ:173940) business as it appears the company may be on the cusp of a considerable accomplishment. FNC Entertainment Co., Ltd. engages in the entertainment business primarily in South Korea. With the latest financial year loss of ₩7.0b and a trailing-twelve-month loss of ₩7.3b, the ₩81b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is FNC ENTERTAINMENT's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for FNC ENTERTAINMENT

Expectations from some of the South Korean Entertainment analysts is that FNC ENTERTAINMENT is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of ₩4.3b in 2021. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 109% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving FNC ENTERTAINMENT's growth isn’t the focus of this broad overview, though, bear in mind that typically 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 The company has managed its capital judiciously, with debt making up 21% 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:

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

1. Valuation: What is FNC ENTERTAINMENT 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 FNC ENTERTAINMENT 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 FNC ENTERTAINMENT’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. 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.
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