Why Anhui Transport Consulting & Design InstituteLtd's (SHSE:603357) Earnings Are Better Than They Seem

The market seemed underwhelmed by last week's earnings announcement from Anhui Transport Consulting & Design Institute Co.,Ltd. (SHSE:603357) despite the healthy numbers. We did some digging, and we think that investors are missing some encouraging factors in the underlying numbers.

View our latest analysis for Anhui Transport Consulting & Design InstituteLtd

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Anhui Transport Consulting & Design InstituteLtd's profit was reduced by CN¥138m, due to unusual items, over the last year. 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 that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Anhui Transport Consulting & Design InstituteLtd 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 Anhui Transport Consulting & Design InstituteLtd's Profit Performance

Unusual items (expenses) detracted from Anhui Transport Consulting & Design InstituteLtd's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Anhui Transport Consulting & Design InstituteLtd's statutory profit actually understates its earnings potential! And the EPS is up 35% annually, over the last three years. 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 Anhui Transport Consulting & Design InstituteLtd, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Anhui Transport Consulting & Design InstituteLtd, and understanding this should be part of your investment process.

Today we've zoomed in on a single data point to better understand the nature of Anhui Transport Consulting & Design InstituteLtd's profit. But there are plenty of other ways to inform your opinion of a company. 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 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.