Akeso, Inc. (HKG:9926) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Akeso, Inc., a biopharmaceutical company, researches, develops, manufactures, and commercializes therapies. On 31 December 2021, the HK$19b market-cap company posted a loss of CN¥1.1b for its most recent financial year. As path to profitability is the topic on Akeso's 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.

Check out our latest analysis for Akeso

Akeso is bordering on breakeven, according to the 13 Hong Kong Biotechs analysts. They expect the company to post a final loss in 2023, before turning a profit of CN¥170m in 2024. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 55% year-on-year, on average, 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 Akeso's upcoming projects, though, take into account that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. 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 26% 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 Akeso 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 Akeso, take a look at Akeso's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

1. Valuation: What is Akeso 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 Akeso 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 Akeso'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. 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.