Shareholders Will Be Pleased With The Quality of Suzhou Anjie Technology's (SZSE:002635) Earnings

Suzhou Anjie Technology Co., Ltd. (SZSE:002635) just reported healthy earnings but the stock price didn't move much. We think that investors have missed some encouraging factors underlying the profit figures.

View our latest analysis for Suzhou Anjie Technology

The Impact Of Unusual Items On Profit

To properly understand Suzhou Anjie Technology's profit results, we need to consider the CN¥64m 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, after all, that's exactly what the accounting terminology implies. If Suzhou Anjie Technology doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

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 Suzhou Anjie Technology's Profit Performance

Unusual items (expenses) detracted from Suzhou Anjie Technology's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Suzhou Anjie Technology's statutory profit actually understates its earnings potential! Better yet, its EPS are growing strongly, which is nice to see. 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 want to do dive deeper into Suzhou Anjie Technology, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Suzhou Anjie Technology you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Suzhou Anjie 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. 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.