Tianjin Motor DiesLtd's (SZSE:002510) Strong Earnings Are Of Good Quality

When companies post strong earnings, the stock generally performs well, just like Tianjin Motor Dies Co.,Ltd.'s (SZSE:002510) stock has recently. We did some digging and found some further encouraging factors that investors will like.

Check out our latest analysis for Tianjin Motor DiesLtd

How Do Unusual Items Influence Profit?

To properly understand Tianjin Motor DiesLtd's profit results, we need to consider the CN¥24m 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. Assuming those unusual expenses don't come up again, we'd therefore expect Tianjin Motor DiesLtd to produce a higher profit next year, all else being equal.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Tianjin Motor DiesLtd.

Our Take On Tianjin Motor DiesLtd's Profit Performance

Because unusual items detracted from Tianjin Motor DiesLtd'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 Tianjin Motor DiesLtd's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share increased by 32% in the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. While earnings are important, another area to consider is the balance sheet. You can see our latest analysis on Tianjin Motor DiesLtd's balance sheet health here.

This note has only looked at a single factor that sheds light on the nature of Tianjin Motor DiesLtd'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 with significant insider holdings 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.