111, Inc.'s (NASDAQ:YI): 111, Inc., through its subsidiaries, operates an integrated online and offline platform in the healthcare market in the People's Republic of China. The US$522m market-cap company announced a latest loss of -CN¥499.6m on 31 December 2019 for its most recent financial year result. The most pressing concern for investors is YI’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for YI.
YI is bordering on breakeven, according to Consumer Retailing analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of CN¥68m in 2021. Therefore, YI is expected to breakeven roughly a few months from now. How fast will YI have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 105% year-on-year, on average, which is extremely buoyant. 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, I won’t go into details of YI’s upcoming projects, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that YI has managed its capital judiciously, with debt making up 12% of equity. This means that YI has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on YI, so if you are interested in understanding the company at a deeper level, take a look at YI’s company page on Simply Wall St. I’ve also put together a list of key factors you should look at:
Valuation: What is YI 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 YI is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on 111’s board and the CEO’s back ground.
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.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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