Sinocelltech Group Limited (SHSE:688520) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Sinocelltech Group Limited, a biotech company, engages in the research and development, and industrialization of recombinant proteins, monoclonal antibodies, and vaccines in China. The CN¥23b market-cap company's loss lessened since it announced a CN¥519m loss in the full financial year, compared to the latest trailing-twelve-month loss of CN¥407m, as it approaches breakeven. Many investors are wondering about the rate at which Sinocelltech Group will turn a profit, with the big question being "when will the company breakeven?" 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 Sinocelltech Group

Sinocelltech Group is bordering on breakeven, according to some Chinese Biotechs analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of CN¥157m in 2024. So, the company is predicted to breakeven just over a year from now. 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 159% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Sinocelltech Group given that this is a high-level summary, but, keep in mind that typically 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 would like to bring into light with Sinocelltech Group is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on Sinocelltech Group, so if you are interested in understanding the company at a deeper level, take a look at Sinocelltech Group's company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Valuation: What is Sinocelltech Group 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 Sinocelltech Group 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 Sinocelltech Group'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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.