Jiangsu Bide Science and TechnologyLtd's (SHSE:605298) Soft Earnings Are Actually Better Than They Appear

The market for Jiangsu Bide Science and Technology Co.,Ltd.'s (SHSE:605298) shares didn't move much after it posted weak earnings recently. Our analysis suggests that while the profits are soft, the foundations of the business are strong.

Check out our latest analysis for Jiangsu Bide Science and TechnologyLtd

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Jiangsu Bide Science and TechnologyLtd's profit was reduced by CN¥5.8m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If Jiangsu Bide Science and TechnologyLtd doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Jiangsu Bide Science and TechnologyLtd.

Our Take On Jiangsu Bide Science and TechnologyLtd's Profit Performance

Unusual items (expenses) detracted from Jiangsu Bide Science and TechnologyLtd's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Jiangsu Bide Science and TechnologyLtd's statutory profit actually understates its earnings potential! Unfortunately, though, its earnings per share actually fell back over the last year. 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'd like to know more about Jiangsu Bide Science and TechnologyLtd as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 5 warning signs for Jiangsu Bide Science and TechnologyLtd you should be mindful of and 1 of these is potentially serious.

This note has only looked at a single factor that sheds light on the nature of Jiangsu Bide Science and TechnologyLtd'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. 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.