Qinhuangdao Tianqin Equipment ManufacturingLtd's (SZSE:300922) Earnings May Just Be The Starting Point

Qinhuangdao Tianqin Equipment Manufacturing Co.,Ltd. (SZSE:300922) recently posted some strong earnings, and the market responded positively. We did some digging and found some further encouraging factors that investors will like.

View our latest analysis for Qinhuangdao Tianqin Equipment ManufacturingLtd

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Qinhuangdao Tianqin Equipment ManufacturingLtd's profit was reduced by CN¥4.4m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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. If Qinhuangdao Tianqin Equipment ManufacturingLtd doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Qinhuangdao Tianqin Equipment ManufacturingLtd.

Our Take On Qinhuangdao Tianqin Equipment ManufacturingLtd's Profit Performance

Because unusual items detracted from Qinhuangdao Tianqin Equipment ManufacturingLtd's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Qinhuangdao Tianqin Equipment ManufacturingLtd's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share increased by 24% in 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. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 3 warning signs for Qinhuangdao Tianqin Equipment ManufacturingLtd (1 is concerning) you should be familiar with.

This note has only looked at a single factor that sheds light on the nature of Qinhuangdao Tianqin Equipment ManufacturingLtd'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 that insiders are buying 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.