Weak Statutory Earnings May Not Tell The Whole Story For Bingshan Refrigeration & Heat Transfer Technologies (SZSE:000530)
Despite Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.'s (SZSE:000530) recent earnings report having lackluster headline numbers, the market responded positively. We think that shareholders might be missing some concerning factors that our analysis found.
Check out our latest analysis for Bingshan Refrigeration & Heat Transfer Technologies
How Do Unusual Items Influence Profit?
Importantly, our data indicates that Bingshan Refrigeration & Heat Transfer Technologies' profit received a boost of CN¥24m in unusual items, over the last year. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. We can see that Bingshan Refrigeration & Heat Transfer Technologies' positive unusual items were quite significant relative to its profit in the year to September 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.
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 Bingshan Refrigeration & Heat Transfer Technologies' Profit Performance
As previously mentioned, Bingshan Refrigeration & Heat Transfer Technologies' large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. For this reason, we think that Bingshan Refrigeration & Heat Transfer Technologies' statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. Sadly, its EPS was down over the last twelve months. 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. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Bingshan Refrigeration & Heat Transfer Technologies.
This note has only looked at a single factor that sheds light on the nature of Bingshan Refrigeration & Heat Transfer Technologies' profit. But there are plenty of other ways to inform your opinion of a company. 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. 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.
About SZSE:000530
Bingshan Refrigeration & Heat Transfer Technologies
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Reasonable growth potential with adequate balance sheet.