We feel now is a pretty good time to analyse Sinocelltech Group Limited's (SHSE:688520) business as it appears the company may be on the cusp of a considerable accomplishment. Sinocelltech Group Limited, a biotech company, engages in the research and development, and industrialization of recombinant proteins, monoclonal antibodies, and vaccines in China. With the latest financial year loss of CN¥396m and a trailing-twelve-month loss of CN¥169m, the CN¥18b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Sinocelltech Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts' expectations for the company.

According to some industry analysts covering Sinocelltech Group, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of CN¥283m in 2024. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 120%, which signals high confidence from analysts. 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 Sinocelltech Group's upcoming projects, though, take into account 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we would like to bring into light with Sinocelltech Group is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of Sinocelltech Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Sinocelltech Group's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

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.

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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.

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