Analysts Are Optimistic We'll See A Profit From Senhwa Biosciences, Inc. (GTSM:6492)

Senhwa Biosciences, Inc. (GTSM:6492) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Senhwa Biosciences, Inc., a clinical-stage biopharmaceutical company, identifies and develops therapies for the treatment of cancer. The NT$16b market-cap company posted a loss in its most recent financial year of NT$391m and a latest trailing-twelve-month loss of NT$352m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Senhwa Biosciences 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.

See our latest analysis for Senhwa Biosciences

Senhwa Biosciences is bordering on breakeven, according to the 2 Taiwanese Biotechs analysts. They expect the company to post a final loss in 2020, before turning a profit of NT$1.1b 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 107% year-on-year, on average, 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 Senhwa Biosciences' upcoming projects, though, bear in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.4% 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 too many aspects of Senhwa Biosciences to cover in one brief article, but the key fundamentals for the company can all be found in one place – Senhwa Biosciences' company page on Simply Wall St. We've also put together a list of key factors you should look at:

1. Valuation: What is Senhwa Biosciences 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 Senhwa Biosciences 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 Senhwa Biosciences’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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