Shenzhen FRD Science & Technology's (SZSE:300602) Earnings Offer More Than Meets The Eye

Shenzhen FRD Science & Technology Co., Ltd.'s (SZSE:300602) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. We did some analysis to find out why and believe that investors might be missing some encouraging factors contained in the earnings.

View our latest analysis for Shenzhen FRD Science & Technology

How Do Unusual Items Influence Profit?

For anyone who wants to understand Shenzhen FRD Science & Technology's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by CN¥25m due 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. 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. Assuming those unusual expenses don't come up again, we'd therefore expect Shenzhen FRD Science & Technology to produce a higher profit next year, all else being equal.

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 Shenzhen FRD Science & Technology's Profit Performance

Unusual items (expenses) detracted from Shenzhen FRD Science & Technology's earnings over the last year, but we might see an improvement next year. Because of this, we think Shenzhen FRD Science & Technology's earnings potential is at least as good as it seems, and maybe even better! 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. If you'd like to know more about Shenzhen FRD Science & Technology as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for Shenzhen FRD Science & Technology you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Shenzhen FRD Science & Technology'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. 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.