CStone Pharmaceuticals (HKG:2616) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. CStone Pharmaceuticals, a biopharmaceutical company, researches, develops, and commercializes immuno-oncology and precision medicines to address the unmet medical needs of cancer patients in China and internationally. On 31 December 2021, the HK$5.1b market-cap company posted a loss of CN¥1.9b for its most recent financial year. The most pressing concern for investors is CStone Pharmaceuticals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts' expectations for the company.

View our latest analysis for CStone Pharmaceuticals

CStone Pharmaceuticals is bordering on breakeven, according to the 3 Hong Kong Biotechs analysts. They expect the company to post a final loss in 2023, before turning a profit of CN¥16m in 2024. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 78%, 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 CStone Pharmaceuticals' upcoming projects, though, bear in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we'd like to point out is that The company has managed its capital judiciously, with debt making up 12% 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 CStone Pharmaceuticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – CStone Pharmaceuticals' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further examine:

1. Historical Track Record: What has CStone Pharmaceuticals' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CStone Pharmaceuticals' 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.