Analysts Expect Breakeven For TSEC Corporation (TPE:6443) Before Long

We feel now is a pretty good time to analyse TSEC Corporation's (TPE:6443) business as it appears the company may be on the cusp of a considerable accomplishment. TSEC Corporation engages in the production and sale of solar cells and modules in Taiwan, Japan, the United States, Europe, China, and internationally. The NT$18b market-cap company posted a loss in its most recent financial year of NT$201m and a latest trailing-twelve-month loss of NT$393m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is TSEC's path to profitability – when will it 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 TSEC

According to the 2 industry analysts covering TSEC, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of NT$898m in 2021. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 111% is expected, 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 TSEC's upcoming projects, but, bear in mind that by and large 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. TSEC currently has a debt-to-equity ratio of 119%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of TSEC 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 TSEC, take a look at TSEC's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Valuation: What is TSEC 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 TSEC 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 TSEC’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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