Nayuki Holdings Limited (HKG:2150) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Nayuki Holdings Limited, an investment holding company, operates a chain of teahouses in China. With the latest financial year loss of CN¥469m and a trailing-twelve-month loss of CN¥149m, the HK$5.4b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Nayuki 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.
Consensus from 13 of the Hong Kong Hospitality analysts is that Nayuki Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of CN¥452m in 2024. Therefore, the company is expected to breakeven roughly 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 53% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Nayuki Holdings' growth isn't the focus of this broad overview, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there's one aspect worth mentioning. Nayuki Holdings currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of Nayuki Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Nayuki Holdings' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
- Valuation: What is Nayuki 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 Nayuki Holdings 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 Nayuki Holdings'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.