Suzhou Zelgen Biopharmaceuticals Co.,Ltd. (SHSE:688266) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Suzhou Zelgen Biopharmaceuticals Co., Ltd. The CN¥14b market-cap company's loss lessened since it announced a CN¥279m loss in the full financial year, compared to the latest trailing-twelve-month loss of CN¥261m, as it approaches breakeven. Many investors are wondering about the rate at which Suzhou Zelgen BiopharmaceuticalsLtd 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.

Suzhou Zelgen BiopharmaceuticalsLtd is bordering on breakeven, according to the 4 Chinese Biotechs analysts. They expect the company to post a final loss in 2024, before turning a profit of CN¥87m in 2025. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 108% 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 Suzhou Zelgen BiopharmaceuticalsLtd's growth isn't the focus of this broad overview, but, take into account that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there's one issue worth mentioning. Suzhou Zelgen BiopharmaceuticalsLtd currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in Suzhou Zelgen BiopharmaceuticalsLtd's case is 60%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Suzhou Zelgen BiopharmaceuticalsLtd 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 Suzhou Zelgen BiopharmaceuticalsLtd 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 Suzhou Zelgen BiopharmaceuticalsLtd'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.

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