Jaya Tiasa Holdings Berhad (KLSE:JTIASA) On The Verge Of Breaking Even

With the business potentially at an important milestone, we thought we'd take a closer look at Jaya Tiasa Holdings Berhad's (KLSE:JTIASA) future prospects. Jaya Tiasa Holdings Berhad, an investment holding company, operates as an oil palm and timber producer in Malaysia. The RM658m market-cap company posted a loss in its most recent financial year of RM72m and a latest trailing-twelve-month loss of RM41m shrinking the gap between loss and breakeven. The most pressing concern for investors is Jaya Tiasa Holdings Berhad's 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 Jaya Tiasa Holdings Berhad

According to some industry analysts covering Jaya Tiasa Holdings Berhad, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of RM89m in 2021. Therefore, the company is expected to breakeven roughly 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 41%, which signals high confidence from analysts. 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 Jaya Tiasa Holdings Berhad's upcoming projects, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Jaya Tiasa Holdings Berhad currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Jaya Tiasa Holdings Berhad's case is 61%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Jaya Tiasa Holdings Berhad 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 Jaya Tiasa Holdings Berhad 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 Jaya Tiasa Holdings Berhad’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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