Marketingforce Management Ltd's (HKG:2556) Profit Outlook

Marketingforce Management Ltd (HKG:2556) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Marketingforce Management Ltd provides software as a service (SaaS) solution in China. With the latest financial year loss of CN¥877m and a trailing-twelve-month loss of CN¥19m, the HK$8.4b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Marketingforce Management's investors mind, we've decided to gauge market sentiment. 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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Marketingforce Management is bordering on breakeven, according to the 4 Hong Kong Software analysts. They expect the company to post a final loss in 2025, before turning a profit of CN¥109m in 2026. So, the company is predicted 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 signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Marketingforce Management's growth isn’t the focus of this broad overview, though, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for Marketingforce Management

One thing we would like to bring into light with Marketingforce Management is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Marketingforce Management's case is 83%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Marketingforce Management 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 Marketingforce Management 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 Marketingforce Management’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.