Some May Be Optimistic About Jiangsu Zhongtian Technology's (SHSE:600522) Earnings

Investors were disappointed with the weak earnings posted by Jiangsu Zhongtian Technology Co., Ltd. (SHSE:600522 ). While the headline numbers were soft, we believe that investors might be missing some encouraging factors.

See our latest analysis for Jiangsu Zhongtian Technology

The Impact Of Unusual Items On Profit

For anyone who wants to understand Jiangsu Zhongtian Technology's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥365m 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 Jiangsu Zhongtian Technology 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 Jiangsu Zhongtian Technology's Profit Performance

Because unusual items detracted from Jiangsu Zhongtian Technology's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Based on this observation, we consider it likely that Jiangsu Zhongtian Technology's statutory profit actually understates its earnings potential! And the EPS is up 60% annually, over the last three years. 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 Jiangsu Zhongtian Technology as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Jiangsu Zhongtian Technology, and understanding this should be part of your investment process.

Today we've zoomed in on a single data point to better understand the nature of Jiangsu Zhongtian Technology's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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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.