We feel now is a pretty good time to analyse Lianlian DigiTech Co., Ltd.'s (HKG:2598) business as it appears the company may be on the cusp of a considerable accomplishment. Lianlian DigiTech Co., Ltd., together with its subsidiaries, provides digital payment services and value-added services to small and midsized merchants and enterprises in China and internationally. The HK$11b market-cap company announced a latest loss of CN¥168m on 31 December 2024 for its most recent financial year result. Many investors are wondering about the rate at which Lianlian DigiTech will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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Consensus from 3 of the Hong Kong Diversified Financial analysts is that Lianlian DigiTech is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of CN¥1.0b in 2025. So, the company is predicted to breakeven approximately 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 10%, which is relatively reasonable. However, if this rate turns out to be too buoyant, the company may become profitable later than analysts predict.

Given this is a high-level overview, we won’t go into details of Lianlian DigiTech's upcoming projects, though, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Check out our latest analysis for Lianlian DigiTech

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 39% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Lianlian DigiTech which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Lianlian DigiTech, take a look at Lianlian DigiTech's company page on Simply Wall St. We've also put together a list of key aspects you should look at:

1. Historical Track Record: What has Lianlian DigiTech's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lianlian DigiTech'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.