We feel now is a pretty good time to analyse Tan Chong Motor Holdings Berhad's (KLSE:TCHONG) business as it appears the company may be on the cusp of a considerable accomplishment. Tan Chong Motor Holdings Berhad, an investment holding company, engages in the assembly, manufacture, and distribution of motor and commercial vehicles in Malaysia, Vietnam, and internationally. On 31 December 2022, the RM717m market-cap company posted a loss of RM51m for its most recent financial year. As path to profitability is the topic on Tan Chong Motor Holdings Berhad's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Tan Chong Motor Holdings Berhad

Tan Chong Motor Holdings Berhad is bordering on breakeven, according to the 7 Malaysian Auto analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of RM18m in 2024. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 106%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Tan Chong Motor Holdings Berhad's growth isn’t the focus of this broad overview, but, 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.

Before we wrap up, there’s one issue worth mentioning. Tan Chong Motor Holdings Berhad currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Tan Chong Motor Holdings Berhad's case is 44%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Tan Chong Motor Holdings Berhad 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 Tan Chong Motor Holdings Berhad, take a look at Tan Chong Motor Holdings Berhad's company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

1. Valuation: What is Tan Chong Motor Holdings Berhad 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 Tan Chong Motor Holdings Berhad 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 Tan Chong Motor Holdings Berhad’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.

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