We Think That There Are More Issues For Tianjin Keyvia ElectricLtd (SZSE:300407) Than Just Sluggish Earnings

Tianjin Keyvia Electric Co.,Ltd's (SZSE:300407) recent weak earnings report didn't cause a big stock movement. We think that investors are worried about some weaknesses underlying the earnings.

Check out our latest analysis for Tianjin Keyvia ElectricLtd

How Do Unusual Items Influence Profit?

For anyone who wants to understand Tianjin Keyvia ElectricLtd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from CN¥11m worth of unusual items. 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. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Tianjin Keyvia ElectricLtd.

Our Take On Tianjin Keyvia ElectricLtd's Profit Performance

Arguably, Tianjin Keyvia ElectricLtd's statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that Tianjin Keyvia ElectricLtd's statutory profits are better than its underlying earnings power. But at least holders can take some solace from the 28% per annum growth in EPS for the last three. 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. 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 - Tianjin Keyvia ElectricLtd has 1 warning sign we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Tianjin Keyvia ElectricLtd'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 with high insider ownership.

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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.