We Might See A Profit From Jahwa Electronics. Co., Ltd (KRX:033240) Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Jahwa Electronics. Co., Ltd's (KRX:033240) future prospects. Jahwa Electronics. Co., Ltd manufactures and sells precision electronic components in South Korea and internationally. The ₩339b market-cap company announced a latest loss of ₩6.3b on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Jahwa Electronics' path to profitability – when will it 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 Jahwa Electronics

According to some industry analysts covering Jahwa Electronics, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of ₩22b in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 51% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Jahwa Electronics' upcoming projects, though, keep 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’d like to point out is that The company has managed its capital judiciously, with debt making up 16% 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 key fundamentals of Jahwa Electronics which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Jahwa Electronics, take a look at Jahwa Electronics' company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

1. Valuation: What is Jahwa Electronics 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 Jahwa Electronics 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 Jahwa Electronics’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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