The stock was sluggish on the back of Jinneng Science&Technology Co.,Ltd's (SHSE:603113) recent earnings report. We have done some analysis, and found some encouraging factors that we believe the shareholders should consider.

How Do Unusual Items Influence Profit?

To properly understand Jinneng Science&TechnologyLtd's profit results, we need to consider the CN¥78m expense attributed 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. If Jinneng Science&TechnologyLtd doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

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 Jinneng Science&TechnologyLtd's Profit Performance

Unusual items (expenses) detracted from Jinneng Science&TechnologyLtd's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Jinneng Science&TechnologyLtd's statutory profit actually understates its earnings potential! And it's also positive that the company showed enough improvement to book a profit this year, after losing money last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. If you'd like to know more about Jinneng Science&TechnologyLtd as a business, it's important to be aware of any risks it's facing. To that end, you should learn about the 2 warning signs we've spotted with Jinneng Science&TechnologyLtd (including 1 which is a bit unpleasant).

This note has only looked at a single factor that sheds light on the nature of Jinneng Science&TechnologyLtd's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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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.