ESR-REIT’s (SGX:J91U): ESR-REIT has been listed on the Singapore Exchange Securities Trading Limited since 25 July 2006. The S$759.49M market-cap company announced a latest loss of -S$501.00K on 31 December 2017 for its most recent financial year result. The most pressing concern for investors is J91U’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for J91U.

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According to the industry analysts covering J91U, breakeven is near. They expect the company to post a final loss in 2017, before turning a profit of S$63.81M in 2018. J91U is therefore projected to breakeven around a few months from now. What rate will J91U have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 45.30%, 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 detail the detail of J91U’s upcoming projects, but, bear 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.

Before I wrap up, there’s one issue worth mentioning. J91U currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in J91U’s case is 72.02%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of J91U to cover in one brief article, but the key fundamentals for the company can all be found in one place – J91U’s company page on Simply Wall St. I’ve also put together a list of key aspects you should further research:

1. Valuation: What is J91U 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 J91U 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 ESR-REIT’s board and the CEO’s back ground.

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.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.