Harbin Electric Corporation Jiamusi Electric MachineLtd's (SZSE:000922) Profits May Not Reveal Underlying Issues

Harbin Electric Corporation Jiamusi Electric Machine CO.,Ltd's (SZSE:000922) healthy profit numbers didn't contain any surprises for investors. We think this is due to investors looking beyond the statutory profits and being concerned with what they see.

Check out our latest analysis for Harbin Electric Corporation Jiamusi Electric MachineLtd

How Do Unusual Items Influence Profit?

Importantly, our data indicates that Harbin Electric Corporation Jiamusi Electric MachineLtd's profit received a boost of CN¥112m in unusual items, over the last year. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. Which is hardly surprising, given the name. We can see that Harbin Electric Corporation Jiamusi Electric MachineLtd's positive unusual items were quite significant relative to its profit in the year to March 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 Harbin Electric Corporation Jiamusi Electric MachineLtd's Profit Performance

As previously mentioned, Harbin Electric Corporation Jiamusi Electric MachineLtd's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. As a result, we think it may well be the case that Harbin Electric Corporation Jiamusi Electric MachineLtd's underlying earnings power is lower than its statutory profit. The good news is that its earnings per share increased slightly in 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. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 2 warning signs for Harbin Electric Corporation Jiamusi Electric MachineLtd you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Harbin Electric Corporation Jiamusi Electric MachineLtd'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.