We Might See A Profit From Jaya Tiasa Holdings Berhad (KLSE:JTIASA) Soon

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 RM871m market-cap company’s loss lessened since it announced a RM72m loss in the full financial year, compared to the latest trailing-twelve-month loss of RM53m, as it approaches 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.

Check out our latest analysis for Jaya Tiasa Holdings Berhad

Expectations from some of the Malaysian Forestry analysts is that Jaya Tiasa Holdings Berhad is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of RM89m in 2021. The company is therefore projected to breakeven around 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 46% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Jaya Tiasa Holdings Berhad's growth isn’t the focus of this broad overview, but, bear in mind that by and large 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 Jaya Tiasa Holdings Berhad is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Jaya Tiasa Holdings Berhad's case is 65%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Jaya Tiasa Holdings Berhad 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 Jaya Tiasa Holdings Berhad, take a look at Jaya Tiasa Holdings Berhad's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

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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