Gushengtang Holdings Limited (HKG:2273) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Gushengtang Holdings Limited, an investment holding company, provides healthcare services and sells healthcare products. The HK$9.2b market-cap company announced a latest loss of CN¥507m on 31 December 2021 for its most recent financial year result. As path to profitability is the topic on Gushengtang Holdings' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Gushengtang Holdings

Consensus from 8 of the Hong Kong Healthcare analysts is that Gushengtang Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of CN¥208m in 2022. The company is therefore projected to breakeven around 12 months 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 71% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won't go into details of Gushengtang Holdings' upcoming projects, though, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we'd like to point out is that The company has managed its capital judiciously, with debt making up 5.4% 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 key fundamentals of Gushengtang Holdings 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 Gushengtang Holdings, take a look at Gushengtang Holdings' company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

1. Valuation: What is Gushengtang Holdings 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 Gushengtang Holdings 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 Gushengtang Holdings'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.