Loss-Making TaiMed Biologics Inc. (GTSM:4147) Set To Breakeven

With the business potentially at an important milestone, we thought we'd take a closer look at TaiMed Biologics Inc.'s (GTSM:4147) future prospects. TaiMed Biologics Inc., a biotechnology company, develops health-care products. The NT$21b market-cap company’s loss lessened since it announced a NT$579m loss in the full financial year, compared to the latest trailing-twelve-month loss of NT$173m, as it approaches breakeven. Many investors are wondering about the rate at which TaiMed Biologics will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for TaiMed Biologics

TaiMed Biologics is bordering on breakeven, according to the 3 Taiwanese Biotechs analysts. They expect the company to post a final loss in 2020, before turning a profit of NT$81m in 2021. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 124% is expected, which is extremely buoyant. 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 TaiMed Biologics' upcoming projects, though, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 15% 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 TaiMed Biologics 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 TaiMed Biologics, take a look at TaiMed Biologics' company page on Simply Wall St. We've also put together a list of key factors you should further examine:

1. Valuation: What is TaiMed Biologics 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 TaiMed Biologics 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 TaiMed Biologics’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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