With the business potentially at an important milestone, we thought we'd take a closer look at Linklogis Inc.'s (HKG:9959) future prospects. Linklogis Inc., an investment holding company, provides supply chain finance technology and data-driven emerging solutions in Mainland China. The HK$3.1b market-cap company posted a loss in its most recent financial year of CN¥441m and a latest trailing-twelve-month loss of CN¥512m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Linklogis' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for Linklogis
Consensus from 2 of the Hong Kong Software analysts is that Linklogis is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of CN¥43m in 2025. So, the company is predicted to breakeven approximately 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 96%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Linklogis given that this is a high-level summary, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 3.2% 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 Linklogis to cover in one brief article, but the key fundamentals for the company can all be found in one place – Linklogis' company page on Simply Wall St. We've also compiled a list of important factors you should further research:
- Valuation: What is Linklogis 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 Linklogis is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Linklogis’s board and the CEO’s background.
- 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.