Shandong Jinjing Science & Technology Stock Co.,Ltd (SHSE:600586) just reported healthy earnings but the stock price didn't move much. Investors are probably missing some underlying factors which are encouraging for the future of the company.
The Impact Of Unusual Items On Profit
For anyone who wants to understand Shandong Jinjing Science & Technology StockLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥106m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Shandong Jinjing Science & Technology StockLtd to produce a higher profit next year, all else being equal.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
Our Take On Shandong Jinjing Science & Technology StockLtd's Profit Performance
Because unusual items detracted from Shandong Jinjing Science & Technology StockLtd's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Shandong Jinjing Science & Technology StockLtd's earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 41% annually, over the last three years. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into Shandong Jinjing Science & Technology StockLtd, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Shandong Jinjing Science & Technology StockLtd has 1 warning sign and it would be unwise to ignore this.
This note has only looked at a single factor that sheds light on the nature of Shandong Jinjing Science & Technology StockLtd's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.
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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.