There May Be Reason For Hope In Zhejiang Yilida VentilatorLtd's (SZSE:002686) Disappointing Earnings

The market for Zhejiang Yilida Ventilator Co.,Ltd.'s (SZSE:002686) shares didn't move much after it posted weak earnings recently. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors.

See our latest analysis for Zhejiang Yilida VentilatorLtd

How Do Unusual Items Influence Profit?

For anyone who wants to understand Zhejiang Yilida VentilatorLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥36m due to unusual items. 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. Zhejiang Yilida VentilatorLtd took a rather significant hit from unusual items in the year to March 2024. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Zhejiang Yilida VentilatorLtd.

Our Take On Zhejiang Yilida VentilatorLtd's Profit Performance

As we mentioned previously, the Zhejiang Yilida VentilatorLtd's profit was hampered by unusual items in the last year. Because of this, we think Zhejiang Yilida VentilatorLtd's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! Unfortunately, though, its earnings per share actually fell back over the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. 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. At Simply Wall St, we found 1 warning sign for Zhejiang Yilida VentilatorLtd and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of Zhejiang Yilida VentilatorLtd'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 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.