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¥26m, the CN¥19b 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? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 139% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Sinocelltech Group given that this is a high-level summary, but, bear in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there's one issue worth mentioning. Sinocelltech Group 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 put together a list of relevant factors 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.